Aircraft Insurance - Why would you?

[rankamateur]

It's a rainy day so I read this http://www.qbe.com.au/Business/Aviation/Aircraft-Hull-Liability/Insurance.html and I came away thinking it would be a very short document indeed if they just wrote what they would pay for under the policy.

 

 

[Bruce Tuncks]

It has always puzzled me that people seem to trust insurance companies. Why would they pay you when they have more lawyers than you can afford? And they wrote the fine print ? I would prefer to be in an insurance co-op, where those in the co-op agreed to be levied to help out a member in trouble. This was the idea of the Lodges, in the days before social security. The Lodge would look after your widow.

 

Alas there is nothing like it for aviation these days. I guess the tiny possibility of being levied for a $20 million payout isn't appealing. So I just try to be careful, only fly in good weather, and I don't stint money on maintenance. I really shouldn't take passengers, but I do.

 

Bruce

 

 

[cscotthendry]

In the earliest days of Lloyds of London, insurance was done by co-ops of ship owners to help spread the risks involved. Now however, insurance companies are just another form of investment banking, designed primarily to return the maximum profit possible to shareholders. The notion that they cover "risk" is laughable these days as in order to maximise the profit, they write their policies to be as obtuse as possible and then use even the flimsiest excuses to refuse payouts.

 

As for Hull insurance, I 'self-insure'. That is if I break something then I fork out the dough to fix it and if I should write the whole plane off, then it's my loss. You can take it to the bank, that any insurance company will have carefully assesed the risk of any endeavor and set the premiums such that they will always make money by 'covering' that endeavor.

 

 

[eightyknots]

It has always puzzled me that people seem to trust insurance companies. Why would they pay you when they have more lawyers than you can afford? And they wrote the fine print ? I would prefer to be in an insurance co-op, where those in the co-op agreed to be levied to help out a member in trouble. This was the idea of the Lodges, in the days before social security. The Lodge would look after your widow.Alas there is nothing like it for aviation these days. I guess the tiny possibility of being levied for a $20 million payout isn't appealing. So I just try to be careful, only fly in good weather, and I don't stint money on maintenance. I really shouldn't take passengers, but I do.

Bruce

For 19 or 20 centuries, churches served the same purpose, relying on many charitable people to give to the church so that they, in turn, could help out poorer people. The only problem is that people with excess money got taxed at an increasingly high rate over the last 70 or 80 years. The funds so taken from taxpayers is now 'distributed' to" welfare recipients" in ever-increasing amounts by the government based in Canberra. Lodges, churches and charities -on the ground- knew who needed help because they were close at hand. Most of these were run by volunteers or low paid staff. The Social Security system has a system of fancy offices, high paid managers, many middle managers and an even larger number of case workers to dole out the taxpayers' dollars to people whose needs they know little about.

 

 

[biggles5128]

Would someone a bit smarter than me like to do some sums on the viability of an insurance co op for us members. Like most I pay around 3k a year, so far have given the b@stards around 18k and not a single claim. I am sure that even a 1k a year into the pool with only 50 members would still be a good risk, don't you think.

 

 

[rgmwa]

One interesting exclusion in the QBE policy is any malicious act or act of sabotage. Not long ago somebody broke into a hangar at airfield near Perth, broke into a plane, managed to start the engine and taxied it into the hangar door. It sustained a lot of damage, which I asume would not have been covered under this policy. If I was the owner I would not be very happy. I assume that would also mean that if they forced the canopy open and stole your new glass panel, the loss and damage would not be covered because it was a malicious act. In fact, `theft' is not even mentioned anywhere in the document. I guess it pays to read the fine print.

 

rgmwa

 

 

[rankamateur]

Back to insurance, how does not carrying insurance mean you shouldn't carry a passenger made aware of your fly at your own risk plackard?

 

 

[rankamateur]

One interesting exclusion in the QBE policy is any malicious act or act of sabotage. Not long ago somebody broke into a hangar at airfield near Perth, broke into a plane, managed to start the engine and taxied it into the hangar door. It sustained a lot of damage, which I asume would not have been covered under this policy. If I was the owner I would not be very happy. I assume that would also mean that if they forced the canopy open and stole your new glass panel, the loss and damage would not be covered because it was a malicious act. In fact, `theft' is not even mentioned anywhere in the document. I guess it pays to read the fine print.rgmwa

Are there better companies than QBE when it comes to exclusions, or are they all sly rats that take money off people who don't read the fine print?

 

 

[Old Koreelah]

Would someone a bit smarter than me like to do some sums on the viability of an insurance co op for us members. Like most I pay around 3k a year, so far have given the b@stards around 18k and not a single claim. I am sure that even a 1k a year into the pool with only 50 members would still be a good risk, don't you think.

At first reading this seems a viable ida- just like Marxism looked pretty good at first. Unfortunately we must take account of human nature. Very soon you will find people complaining that they are taking fewer risks than someone else, so should pay less.

A similar situation to flood insurance, which is becoming a political football. My flood insurance was to pay a little more for land that was not on a floodplain.

 

 

[Kyle Communications]

WEll this opened a can of worms for me as I am insured by QBE.....BUT I have policy endorsements as a standard that include the malicious damage also theft of internals up to $10,000 it also covers transportation when on the ground like taking the aircraft on the back of a truck. There are quite a few other amendments on my policy as well that cover the bits that are either not covered or missed out of the brochure. even up to $25,000 for killing a animal

 

Mark

 

 

[Guernsey]

Back to insurance, how does not carrying insurance mean you shouldn't carry a passenger made aware of your fly at your own risk plackard?

The problem can be that the passenger gets killed and his wife sues for loss of husband (loss of income) and if she has children loss of income to raise them without the breadwinner. That can amount to an awful lot of money.

 

Alan.

 

 

[Yenn]

I would consider the trip of a new plane to the airstrip on a trailer would be a high risk, but QBE had no problems with it. Luckily I didn't need to claim.

 

As far as spending more to build in an area which won't flood, be careful. I was well above the flood level until the local dam was raised and a saddle dam put in to give way in high flow times and save the main dam. Told to evacuate last month, in case it burst. It is hard to asses risk, but the insurance companies are experts at it.

 

 

[rankamateur]

The problem can be that the passenger gets killed and his wife sues for loss of husband (loss of income) and if she has children loss of income to raise them without the breadwinner. That can amount to an awful lot of money.Alan.

Is that the insurance we mustn't talk about, that we pay for through our membership. If so that would be the same insurance we would be required to disclose to the insurer we choose to supplement that insurance with, like QBE, but our assocciation won't tell us what it is that we should supplement or disclose!

 

 

[rgmwa]

WEll this opened a can of worms for me as I am insured by QBE.....BUT I have policy endorsements as a standard that include the malicious damage also theft of internals up to $10,000 it also covers transportation when on the ground like taking the aircraft on the back of a truck. There are quite a few other amendments on my policy as well that cover the bits that are either not covered or missed out of the brochure. even up to $25,000 for killing a animalMark

Thanks, that's good to know. OBE is covering my build at the moment, but when I finish I'll make sure I sign up for a few optional extras - like the basics you'd expect would be covered under a standard policy.

rgmwa

 

 

[turboplanner]

Back to insurance, how does not carrying insurance mean you shouldn't carry a passenger made aware of your fly at your own risk plackard?

Because the "fly at your own risk" doesn't carry any weight if you fail in your duty of care, and if the passenger is injured, killed or suffers loss, you've pretty much failed in your duty of care.

 

 

[Kyle Communications]

I got my insurance from a broker and the amendments were attached on a separate sheet....Geoff Tonkin PSB Group was the mob so they obviously added that to the std policy

 

 

[rankamateur]

I got my insurance from a broker and the amendments were attached on a separate sheet....Geoff Tonkin PSB Group was the mob so they obviously added that to the std policy

I was a bit shocked at the amount of exclusions in the standard policy, it started to look like "Claytons" insurance at a "Chivas Regal" price.

 

 

[Old Koreelah]

... even up to $25,000 for killing a animalMark

That's not nearly enough for some animals. I like to avoid the nearby upper Hunter Valley. The only landable ground is covered with very pricey racehorses: easily startled and prone to breaking legs.

 

 

[storchy neil]

dont i love insurance thay pay up for repairs even when the repairer put my aircraft back to gether without the manufactures specs neil

 

 

[Guest nunans]

dont i love insurance thay pay up for repairs even when the repairer put my aircraft back to gether without the manufactures specs neil

Thats another problem with insurance, even if they do pay to fix your plane do you really want someone else doing the repairs, in the case of alot of home builds etc the owner builders are much more particular than the panel beaters the insurance company would be happy with.

 

 

[rankamateur]

The insurance company is also ready to deduct the value of your wear and tear, does that mean if your lovely reliable Rotax has done 750 hours they deduct half the price of the engine, but wait, it is 15 years old which is the full service calendar life of the engine so deduct the full price of the engine! Also if an engine failure causes the incident they will only fix the bent bits, leaving you to fix the engine.

 

 

[turboplanner]

Insurers calculate the odds just as well as, if not better than racecourse bookies, so if they set a premium for a given set of conditions, and you don't like those conditions, then you are free to go back and ask for the changes you want, and the premium can be calculated for the higher risk factor.

 

 

[turboplanner]

The insurance company is also ready to deduct the value of your wear and tear, does that mean if your lovely reliable Rotax has done 750 hours they deduct half the price of the engine, but wait, it is 15 years old which is the full service calendar life of the engine so deduct the full price of the engine! Also if an engine failure causes the incident they will only fix the bent bits, leaving you to fix the engine.

Do you really think you would be entitled to the cost of a new engine when yours had reached its full calendar life, and your insurance premium was based on that?

 

 

[Guest nunans]

Do you really think you would be entitled to the cost of a new engine when yours had reached its full calendar life, and your insurance premium was based on that?

I recently got a quote for insurance (only for the cover note had no intention of paying) and they didn't ask the airframe or engine hours they were more interested in my hours on type etc. so the premium was in no way based on aircraft condition or hours

And yeah if i had a prop strike in a jab i would expect a new engine covered by insurance regardless of how worn out my old one was

 

 

[turboplanner]

I recently got a quote for insurance (only for the cover note had no intention of paying) and they didn't ask the airframe or engine hours they were more interested in my hours on type etc. so the premium was in no way based on aircraft condition or hoursAnd yeah if i had a prop strike in a jab i would expect a new engine covered by insurance regardless of how worn out my old one was

Suggest you study up on Insurance, in case you're disappointed down the track. e.g. a cover note is a cover note.