Interesting discussion and I’ll add my experience too. Of course, living in Alaska means we pay through the nose for insurance, which will color my numbers.
First off, I have to agree with Kurt that underinsuring is a HUGE mistake. Limerick, if you have a loss that exceeds 60% of the hull value, the insurance company will cut you a check for your insured value ($100k, in your case) and take your plane. They will then sell your plane for salvage value. The insurance company will make money on this deal. Then you’ll have to go on the open market, which has gone nuts as everybody else has noted, and you won’t be able to replace the aircraft with a similar one.
Brian M, the increase in insurance should not be linear, at least with Avemco. I am a partner in a run of the mill 172M and just called Avemco yesterday to increase our hull value from $75k to $100k. I just told them the airframe and engine times along with the recent upgrades to the panel and they had no problem with the increase. I was even left with the impression that I could’ve asked for higher. But, the increase in our premium was 14% on an increase of 33% on the hull value. Well worth it and another reason not to underinsure.
On my 182, I was insured for four years with Old Republic through BWI, but recently was less than impressed with the service from BWI. In addition, all of the underwriters, like Old Republic, have been making huge increases in the premiums the past few years as the insurance market “hardened” (34% in 2019 and another 10% in 2020). As a result, the substantial savings that I initially realized by going through BWI rather than Avemco had pretty much disappeared. Furthermore, the underwriters would not increase the hull value to what I thought was realistic, and probably even a bit low, in today’s aircraft market. So when I switched to Avemco, I was able to get $150k hull value by sending them a list of all of the upgrades and a photo of the plane. One underwriter that quoted for BWI wouldn’t go above $88k and the others wouldn’t go above $125k.
The other great thing about Avemco is they will stick with long time customers who are getting older, just as gregwyatt noted. Other companies tend to drop pilots as they get older, even 70 or 75. When I was still insured with Old Republic, through BWI, I tried to add a friend as a named pilot, but they turned him down because he was mid-70s at the time. He’s ten times the pilot that I am and has all of the hours and ratings to go with that, but the age was a non-starter. On the other hand, our 172 partnership has a couple partners in their mid-70s that Avemco has had no issue with.
C180 guy, you may run into a problem trying to go to another broker (other than Avemco) at this time because once an insurance underwriter quotes a policy for a broker (such as BWI) on a specific N number, they won’t quote for another broker. So if BWI already has quotes, you’re probably stuck for now, other than calling Avemco. I’m guessing that you won’t have any problem getting realistic hull coverage from Avemco. The other option is pushing BWI to get quotes for higher hull value – ask for Matt White, as others have suggested.
The big difference between brokers is how they present the pilot to the underwriters. A good broker will take the time to really understand a pilot’s abilities and the aircraft they’re flying. That is really the only difference among brokers as they go to the same insurance underwriters to get quotes. It varies from time to time, but I don’t think there are more than about a dozen underwriters that a broker can get quotes from. In the case of flying floats in Alaska, I think there are only about five underwriters willing to quote.
As many of us have found, insurance rates have gone nuts the past few years. I think it has been worse for us in Alaska than it has been for you guys in the Lower 48, but my rates were going up substantially when I was insured through BWI. On the other hand, Avemco’s rates that we had on our 172 hadn’t changed in many years, other than when we increased the hull value. I think Avemco understood the business better and has been able to hold their rates, which in comparison to other underwriters had been high until recently. A few big losses like the Boeing Max and Kobe Bryant can really impact the whole market, plus underwriters get involved with other types of insurance than aviation. Even the stock market can impact insurance rates, since underwriters invest while the money is coming and going, but that should actually be helping lately.
Ross
