But Happy?

jomac wrote:best i have dealt with is heather at regal aviation in hillsboro, or. good luck and don't crash!

Ha! I went to high school and college with Heather. She dated my best friend for years. She is a gem, and it sounds like she's getting good at her job. I didn't find out that she was brokering aircraft insurance until this year.

lowflybye wrote:

1SeventyZ wrote:
I would strongly encourage renter's insurance too for students, even those barely scraping by in life who've chosen to dedicate their funds to flying. As a student, if you stuff a rented 152 into Farmer John's barn, who is on the hook for the barn? The deductible for a flight school's policy is usually pretty high, and I think the student is on the hook for that. Am I wrong?

Your on the right track Zane...more on that issue when i return from a conference call...

OK...back to answer the previous question.

If your negligence caused the accident you are most likely on the hook for the damage to the barn as well as the deductible for the flight schools policy. The policy on a rental aircraft is there to cover the OWNER and NOT THE PILOT. The flight school / club could care less if your butt is covered in a lawsuit as long as they are covered. Policies are written to cover the named insured and the company has the right to subrogate against a negligent 3rd party to recover their loss. Enter the student / renter.

Not only does the company retain the right to subrogate against you in the event of a loss, they also have no duty to defend you in the event of a lawsuit. This is where the non-owned policy comes in to play. The non-owned policy is written to cover the named insured (you) and follows that named insured in any aircraft that they fly (within a given set of limitations) and do not own. The non-owned policy will step up to provide for the defense of the named insured in a lawsuit and pay out on their behalf if the named insured's negligence resulted in the loss. If hull coverage is purchased on a non-owned policy it typically carries an automatic deductible coverage of up to $5,000 to help with that high deductible that the flight schools / clubs often carry.

I just had to add my 2 cents here to let you "Southerners" know how cheap you get insurance. I had to get full coverage on my Sportsman as it's owned by the bank. Avemco hits me up for $10,500 a year for $130,000 hull. It was the cheapest I could find. As my bank note comes down, so will my hull coverage. When I can drop it, it will be gone like a hot potato. But I will probably carry liability.
My bank however was nice enough to let me drop the flight coverage and just have ground this winter since it has been tucked in a shed for the winter. Saved me a couple a K there.

once&futr_alaskaflyer wrote:I don't know, I would think that that they still maintain a deductible to keep the gnat-sized claims away from them. My last damage repair quoted for less than $500. There is a processing cost to every claim after all.

We don't get to many gnat sized claims...the few that we do get most often just pay it themselves instead of making the claim so that their record remains clean with the underwriting companies. In 9 years I cannot remember anyone making a claim for less than $5,000 dollars...I take that back...I did have a claim for 2 Bose headsets that were stolen...that is the least amount that I can remember anyone following through with the claim.

chickenair wrote:Avemco hits me up for $10,500 a year for $130,000 hull. It was the cheapest I could find.

Fook me I just spit coffee all over the computer!

Valuable subject
Think about the Hilton Head Lancair that accidentially killed the only person in site during an emergency
landing. I am sure the owner had liability Ins. and that is minor in comparison to the emotional scares the pilot and deceased family have to live with.
Herman

lowflybye wrote:

lowflybye wrote:

1SeventyZ wrote:
I would strongly encourage renter's insurance too for students, even those barely scraping by in life who've chosen to dedicate their funds to flying. As a student, if you stuff a rented 152 into Farmer John's barn, who is on the hook for the barn? The deductible for a flight school's policy is usually pretty high, and I think the student is on the hook for that. Am I wrong?

Your on the right track Zane...more on that issue when i return from a conference call...

OK...back to answer the previous question.

If your negligence caused the accident you are most likely on the hook for the damage to the barn as well as the deductible for the flight schools policy. The policy on a rental aircraft is there to cover the OWNER and NOT THE PILOT. The flight school / club could care less if your butt is covered in a lawsuit as long as they are covered. Policies are written to cover the named insured and the company has the right to subrogate against a negligent 3rd party to recover their loss. Enter the student / renter.

Not only does the company retain the right to subrogate against you in the event of a loss, they also have no duty to defend you in the event of a lawsuit. This is where the non-owned policy comes in to play. The non-owned policy is written to cover the named insured (you) and follows that named insured in any aircraft that they fly (within a given set of limitations) and do not own. The non-owned policy will step up to provide for the defense of the named insured in a lawsuit and pay out on their behalf if the named insured's negligence resulted in the loss. If hull coverage is purchased on a non-owned policy it typically carries an automatic deductible coverage of up to $5,000 to help with that high deductible that the flight schools / clubs often carry.

Just read this stuff............. Disclaimer,,, Disclaimer... ETC...
On an auto policy if you give another licensed driver permission to drive your car and you have insurance on that vehicle there is NO problem. The aircraft insurers have created a HUGE pile of BS and hoops to jump through to to milk you for every penny they can suck out of your wallet. .

Just go out and build an experimental, and install a rather large engine in it and sit back and entertain yourself with all the reasons for denial you get in the mail. It is comical... I joined the EAA, in fact I am a lifetime member. For all who are not hip on it that is the "EXPERIMENTAL" aircraft assoc. Their sole purpose 'was' to provide support for homebuilders. I called when I first started building the beast and they said,,, auto engine huh ,,,, hhmm. You need 10 hours of trouble free operation then we will write a policy. I got 20 on it and called them.. They then said you need 50 hours... So I flew it for 80 and called again, they then said you now need a mininum of 150. I now am headed for 400 hours of accident free hours, it is hangared all the time, I have never had a claim is 30 years of flying, I have never even put a scratch on anything in my life, auto plane, homeowners etc. The last few denial letters I got had the cutest little line of BS I have ever received...... WE refuse to write a policy for you sir because the engine size is inapproiate for the airframe. !!

As for poor jomac.. I think I know the dealership he is with in Idaho Falls.. It is a top name one with alot of traffic, nice building, good employees etc. 72,000 a year just for liability with a huge deductable... and ZERO claims.... Run the numbers, if he sells 30 units a month thats 200 bucks per,,, A BIG bite out of his margins. !!! This guy is getting screwed.

Actually he is getting played by the insurance industry and " conditioned" to believe he needs the insurance shakedown plan of' buy it to exist'. They have scared the masses into the lie of, buy it or loose your ass. Fact... On the field I am based at there are 30 or so planes, the kazillionaires have big bucks so we can discount them, Of the other 'hardworking guys and gals most are single engine planes... There are three insurance guys based here,,,, all three have either turbine twins or jets. I was born at night,,,, just not LAST night. YMMV...

Ben.

Vick wrote:

chickenair wrote:Avemco hits me up for $10,500 a year for $130,000 hull. It was the cheapest I could find.

Fook me I just spit coffee all over the computer!

Now you know why even commercial outfits are flying uninsured up here.

STOL,
I hardely agree with you!! I get sick of listening to them trying to justify their reason for such high premiums. Sound like the CEO's of any big company whining about there profit margins and that they deserve bonuses because they LOST money running the company. Enough of that rant.
I have gone both ways as far as insurance...insured and self insured. They definitely make it hard for a guy starting out to justify flying. I had 4-500 hours TT when I bought the Champ and when I wanted to get my Seaplane rating I called around for insurance to cover it for only a few months while on floats. I nearly fell over when they said it would be close to $6,000 and this was for $35,000 (may have been $40K) for hull. I ended up just putting Liability on it for $1,600. Then when I wanted to cancel due to hangaring the plane and moving back overseas they refunded NOTHING!!! So I basically paid $1,600 for liability for 4-5 months. This was 4-5 years ago and my figures may be off a little. This was through AOPA!!!!
I just returned home last night and will be calling around for insurance in the next couple of days...anyone have a suggestion on who to contact. I have over 100hrs. float time and the same for TW.
I am an AOPA and EAA member.
WW

Skystrider wrote:lowflybye, I assume when you say "several hundred bucks" you are talking about liabilty. I was with AVEMCO a couple years back and they were $5,800 for liability and hull insurance (60K). A might steep even with a partner! The company I have been with the last few years is less than half that.

I just did a quick calculation to find out how many times my new car's value would go into the value of my Maule. Then I took that multiplier and applied it against my insurance for my car (liability and value) and it comes out to 42% of my current aircraft premium. Not saying it is a direct comparision but closer enough probably.

My conclusion is that aircraft insurance is more expensive than car insurance. But I understand that. I have never ground looped my car due to a severe crosswind!

I think the smaller size of the market and lack of as many companies competing probably accounts for the higher premiums in aircraft. Even though aircraft have the higher replacement cost a road vehicle is at much higher risk for striking another causing property liability costs on a car or truck but not so much in an aircraft. Personal injury in aircraft would normally involve only those in the aircraft and less likely to involve those in another plane.

I am nearly done on my search for aircraft insurers and I have found the tail dragger not really any higher to insure than the nosewheel. It has more to do with experience of the pilot. To these insurance companies a low time TW pilot insuring his plane is looked at like a teen age male with a beer and cell phone in his hand.

STOL & WWhunter-

Ever wonder why there are only 11 companies currently writing aviation insurance? If it was as lucrative as you seem to think for the underwriters then don't you think many other insurance companies would want a piece of the pie? Your reasoning that the insurance guys on your field have aircraft proves your point holds no more water than me saying that your ownership of aircraft proves that your industry is overcharging for services.

In 2007 there were only 8 underwriters in the aviation industry...some of the other insurance companies thought that the profit margins were such that they could jump into the market and share in the wealth. They did so and in 2009 we had 13 markets available to write aviation policies. In order to get into the aviation world these companies cut the market rates considerably to the joy of the aircraft owners. As of 2010 we are back down to 11 companies writing aviation insurance due to the fact that the premium cuts made by the new companies could not support the losses that they incurred. Travelers and Britt Paulk have pulled out of the aviation world and the others have begun to raise their rates to cover the losses.

Just a small example...in 2010 alone I have had 4 claims totaling nearly $1,400,000. All 4 aircraft were single engine pistons with high time pilots and had no lawsuit. The premium on these aircraft averaged $3,000 per year. I would have to write 467 policies at that premium just to cover the loss, not to mention the basic cost of keeping the doors open.

Do you remember the hangar collapse at Dulles this winter? The estimates on that loss of aircraft are over $400,000,000. If you divide that out between the 15 aircraft owners then the insurance companies will have to collect $26,666,666 just to break even on the loss paid...that is 133 loss free years at an annual premium of $200,000 per aircraft. The only way to remain in business is to spread the loss out among all the insureds and thus the rates are adjusted accordingly across the board. Are you starting to get the picture?

It's easy to sit back and judge a company and industry from the outside looking in...

lowflybye wrote:STOL & WWhunter-

Ever wonder why there are only 11 companies currently writing aviation insurance? If it was as lucrative as you seem to think for the underwriters then don't you think many other insurance companies would want a piece of the pie? Your reasoning that the insurance guys on your field have aircraft proves your point holds no more water than me saying that your ownership of aircraft proves that your industry is overcharging for services.

In 2007 there were only 8 underwriters in the aviation industry...some of the other insurance companies thought that the profit margins were such that they could jump into the market and share in the wealth. They did so and in 2009 we had 13 markets available to write aviation policies. In order to get into the aviation world these companies cut the market rates considerably to the joy of the aircraft owners. As of 2010 we are back down to 11 companies writing aviation insurance due to the fact that the premium cuts made by the new companies could not support the losses that they incurred. Travelers and Britt Paulk have pulled out of the aviation world and the others have begun to raise their rates to cover the losses.

Just a small example...in 2010 alone I have had 4 claims totaling nearly $1,400,000. All 4 aircraft were single engine pistons with high time pilots and had no lawsuit. The premium on these aircraft averaged $3,000 per year. I would have to write 467 policies at that premium just to cover the loss, not to mention the basic cost of keeping the doors open.

Do you remember the hangar collapse at Dulles this winter? The estimates on that loss of aircraft are over $400,000,000. If you divide that out between the 15 aircraft owners then the insurance companies will have to collect $26,666,666 just to break even on the loss paid...that is 133 loss free years at an annual premium of $200,000 per aircraft. The only way to remain in business is to spread the loss out among all the insureds and thus the rates are adjusted accordingly across the board. Are you starting to get the picture?

It's easy to sit back and judge a company and industry from the outside looking in...

Lowflyby... Don't take this personally because you are one of us single engine backcountry pilots and we need to stick together. The fact that you are in the aircraft industry gives all of us some degree of insider detail most of us would not see. I am just being the devils advocate here so fasten your seat belts.

1- The fact that there is only 11 players in the aviation insurance market can cut both ways. You have pointed out one avenue. The mere fact that the size of the pool is small is ripe for collusion and market manipulation in how policies are drafted. Now, what if the 11 had a winter junket in Bali, and off the record and around a few beach chairs while drinking ,all agreed to create language for all aviation policies that would favor their bottom line. Did it happen ??? who knows, BUT the potential is clearly there for such a small group of players to pull that off.

2- The building failure at Dulles is not aviation related and will no doubt be a wonderful tool for all aviation salespeople to use to justify their high rates. I would bet there have been memos. emails and flyers that have already circulated in the insurance arena to stress this. That particular building failure will eventually be settled by the hangar engineers, builders and landlords and most if not all the claims paid out by aviation insurers will be reinbursed. I will also go out on a limb and bet that when the reinbursment does happen no one in the aviation insurance industry will say a word about it. Also the cost IS spread around among insurance groups and as someone in the industry you should know that condition exists. Maybe you can tell us all about the re-insurance market....

3- Making the point about 4 single engine claims made by high time pilots last year is self serving at best. You make it out to be your office is responsible for that. 467 policies to cover that loss does NOT come out of your hide. That many policies are written in a single morning by brokers worldwide, so you analogy of "you' having to write 467 is smoke and mirrors to justify high rates. You also failed to mention the years of good times and few claims, during which any smart insurance company should have banked the money for bad times. Instead they probably paid huge bonuses and had lavish parties..... See paragraph 1 above for the conspiracy theory.

ok,,, of my soapbox now,,,,, well for a while .

Peace and tailwinds fellow pilots.

Ben

Ben said it pretty much as I would! The powers that bee seem to relish in their spoils until it comes time for them to pay up....then they complain that they can't cover the costs. lowflyby, I see you as a "middleman" and can understand things from your aspect also....it was the CEO's I am refering to. I have lived all over the world and have run into these types that live in multi-million dollar homes, drive 6 figure cars and then have to listen to them crying about profit margins...does NOT cut it with me.
WW

Stol wrote:
Lowflyby... Don't take this personally because you are one of us single engine backcountry pilots and we need to stick together. The fact that you are in the aircraft industry gives all of us some degree of insider detail most of us would not see. I am just being the devils advocate here so fasten your seat belts.

Peace and tailwinds fellow pilots.

Ben

I'm not taking it personally at all...I'm a pilot at heart and an insurance guy to support my habit. I just try to share a bit of info with you fellows whenever questions are asked or misconceptions come up.

To address your points...the collusion factor is closely watched by the insurance commission and is a huge deal. To the point that many competing underwriters will not be found in the same room with the competitor. When I was an underwriter I was told that if a competitor walked up while I was talking with an individual / client then i should politely excuse myself and return at a later time. It was known as industry courtesy not to approach an individual while a competitor was talking with them for that reason. Not to say that I did not know my competitors personally, but we did not play golf or fly together just to stay above board. Can it happen? I'm sure. Does it happen? Not if they value their jobs and their insurance license. If the commissioner yanks your license you are done in this industry...not just out of a job...its a big deal. Most of the underwriting industry is closely guarded and competitive. There was an instance back in the day where 2 underwriters were accused of sharing information between the companies and they are no longer in the industry.

The building failure in Dulles has everything to do with aviation insurance...who do you think insured the hangar liability? Did you know that the hangar liability coverage was $100,000,000 less than the estimated loss? A total loss of that magnitude was never expected. The aircraft policies will respond and get the owners back in the air as quickly as possible. IF negligence can be determined then the companies can subrogate against the architect / builders, but negligence must be proven in order to do so. With them being a company that designs and builds hangars they are also probably insured with the same aviation underwriting companies. With it being an "Act of God" and being that the same companies who insure the aircraft also insuring the hangar liability the only recourse that may keep it out of aviation will be a subrogation towards the architect / builders if they are not also insured within the aviation underwriting world. There is a reason why non aviation companies will not insure risks that have to do with the aviation industry...

Regarding the 4 losses...I pre-qualified that statement with "just a small example". Out of the 300+ policies averaging $3,500 in annual premium that I personally manage, this is the losses that I have seen thus far in 2010. 3 of those 4 aircraft were underwritten by the same company. As you mentioned, it does not come out of my hide, but it does come out of the underwriting companies. If we could take my small example and expand it to all the "brokers worldwide" we would discover what we call the "burn rate". It is different for each underwriting company based on their loss ratio on any given aircraft. The "burn rate" is the MINIMUM amount that they must charge to break even on a given risk based on the average historical loss ratio. This is the reason that some companies will not write a given aircraft, pilot, territory, etc...they historically have not been able to charge what they need to remain profitable so they choose not to take that risk any longer and concentrate on another area. Insurance is a business, just like anything else...it is not a charity as some seem to look at it. If the company is not making a profit, then they adjust their rates to do so or get out. The reinsurance markets are simply investors willing to trade some risk for a given price just as the standard markets do for the aircraft owner. They do not lose any skin until a given loss point is reached at which point they pick up the excess.

There were indeed some good years...immediately following 9-11...it came from the reaction to the huge losses to the insurance world. And yes, this had a major effect on aviation insurance as these same companies insure United and American Airlines. The rates went sky high to "compensate" ( in some cases 200% increases were seen) and stayed there for a bit before slowly trickling down to some record lows. When the going was good we saw the new markets join in and drive the rates down as we have them today. Currently it is below the burn rate for many companies and some have already dropped out as mentioned before while others are holding out using their reserves that you mentioned to compensate until they market swings again. The rates will go up a bit again to a equilibrium point and hover there until another stone hits the water and causes the wave to start again. The insurance companies (just like banks) do not hold onto the money, they invest it. Just as the 401K has in recent years turned into a 201K, the companies have lost money on their investments as well.

Bottom line is that in todays litigious society insurance is what some would consider a necessary evil. Like it or not, most of us need it.

WWhunter wrote:lowflyby, I see you as a "middleman" and can understand things from your aspect also....it was the CEO's I am refering to. I have lived all over the world and have run into these types that live in multi-million dollar homes, drive 6 figure cars and then have to listen to them crying about profit margins...does NOT cut it with me.
WW

I agree with you there...I have little patience with those fellows as well...maybe I will understand their perspective if i ever get the chance to be one. Not holding my breathe

I have also gone without insurance, both liability and hull coverage. I currently carry hull and still struggle with continuing to do so, I will continue with liability.

I have used the insurance 2 times in the 20 some - odd years I have had airplanes. 1 was a total, the other a $12K prop strike. No injuries or passengers aboard either time. I was glad to be insured both times. Never an issue with settlements...I think that has as much to do with the adjuster as anything else. I think I am ahead of the game...and I might quit.

We were paying $15K a year for lodge support insurance on an old 180, $70K on the hull (yes, they used to be worth that much). Between that and the constant battle with the US Forest Circus, we got away from fly - outs. I now pay around $4K for and old 206, $75K on the hull from Avemco.

gb

once&futr_alaskaflyer wrote:Now you know why even commercial outfits are flying uninsured up here.

We operated the skydive center in Wasilla without any insurance, couldn't afford to exist if we did. We lucked out the years I managed the place. But I honestly don't know of too many DZ's anywhere that have insurance.

I plan to have hull in the beginning, including in flight. The quote wasn't bad and since I'm a low time TW pilot, without the cash to replace the plane on my own, the hull is worth it if I screw up. Maybe in the future, I'd drop the hull, when I have more experience and more cash in the bank.

Well as long as the bank owns at least part of your plane they require it to be insured for that amount, in my case $78,000. No choice. I have Avemco. As a "AAA" rated customer I receive their best rate, which to me is still WAY too expensive, but they are the lowest I have found. Experience and aircraft type makes a HUGE difference. No claims, oops, dents, etc ever on my record.

9000+ hours
1500+ TW
3000+ SEA

My 1955 C180 is insured for $115k full coverage,.... $2500/yr
if on straight floats, $125k ............................$3600/yr
if on Amphibs, $150k.................................$6500/yr
Avemco will change the rate throughout the year based on how you use your aircraft though. For example if you keep it on amphibs and choose NOT to land in the water during the winter, the rate would drop to about $3800/yr prorated for those months.

When I owned a brand new 2000 AC Scout I insured it for the same $115,000 the rate was $1250/yr. HALF of the 180. I asked Avemco why? They said because of the 180 accident rate as a whole on that aircraft type. Lots of wrecks due to the type of pilots flying them and how they are used. Oh well.
The formula is all over the place.

I believe that if I could invest the hull insurance amount each year I think I would be better off if for example I bent it and it cost $10-15k to fix. Especially since after you make that claim your insurance rate will probably go UP even more!

Rich