Aircraft Insurance - Why would you?

[Guest Howard Hughes]

If you are worried about a giant lawsuit, just take out some personal liability insurance, it will be a darn sight cheaper than hull insurance!

 

 

[Guest nunans]

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

My idea was to have one days worth of hull insurance to cover the delivery flight (i wasn't in the plane for the flight but did own it by then) incase my money ended up at the bottom of the ocean.

I thought that was the idea of getting the quote (cover note). obviously you want to claim you pay the premium. if it doesnt crash then you forget to follow up with the payment and thats the end of it.

 

Im happy to learn more about it if you would like to share your knowledge...

 

 

[rankamateur]

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?

No I didn't think that but lets say you had put on only 400 hours in the 15 years, under the wording of the policy your engine would be discounted to nil value.

 

 

[turboplanner]

It's really a matter of talking with the insurance company so you both have a written specification of what will be covered for what. Companies will sell agreed value policies, so taking the earlier example where someone wanted a new engine after a prop strike rather than the price of an equivalent engine to the one that was in the aircraft, then if that's on the contract, which means the premium covers it, then that's what you'll get. Same with the 400 hours in 15 years engine - it may well be that an insurance company will insure it for a sum, but that sum has to take account of the fact that officially the engine is considered expired, so it might be better to delete the engine from the policy and take advantage of running the engine out to its mechanical end.

 

Fine print has been outlawed for 30 years or so, but too many people just ask a broker to get them the cheapest cover, then don't even read the contract, then bellow when they try to make a claim, and slag off at an innocent insurance company.

 

 

[Guest nunans]

an innocent insurance company.

Let me guess tp, when you're not flying you are or at least were an insurance salesman?

 

Maybe you can sell me some life insurance? ;)

 

 

[rankamateur]

I wasn't slagging off at anyone. I was quite certain that it would have taken very much less time to read the wording of this policy(the first one I chose to read) covering what is covered rather than wading through the reams of what is not covered. In the end I was left with the impression that there was very little left covered and that any policy value was only a starting point for discounting to achieve any settlement of a claim, unless the plane just disappeared, but then only if you could prove it hadn't been victim of a malicious terrorist, not even sure where you would start to try and prove that.

 

 

[ben87r]

If the insurance company's are making so much money why isn't everyone in the insurance game? I've spent 12 years in the building game only doing insurance work and from what I've seen99.999% of the time they paid out exactly what had been covered in the policy without an issue which meant, the policy holder who had read the policy and made what small and fairly cheap additions to the policy that they required were happy with the result and met their expectations. The others blamed the insurance company's for their shortfalls. I've been on both sides.when I had to make a claim on my bike last year I knew what I was entitled to and what I wasn't and therefore was more then happy.

 

 

[derekliston]

Someone may have already asked this, in which case I apologise, but what is the legal requirement for aircraft insurance? Can I fly with just liability insurance a bit like vehicle third party property & CTP insurance and carry hull risk myself? I bend it, I mend it! sort of.

 

 

[rankamateur]

Someone may have already asked this, in which case I apologise, but what is the legal requirement for aircraft insurance? Can I fly with just liability insurance a bit like vehicle third party property & CTP insurance and carry hull risk myself? I bend it, I mend it! sort of.

I understood the CTP part was the part covered under our membership and licence but it has recently proved difficult to get any answers about what cover we have from that avenue.

 

 

[jetjr]

Talk to a broker

 

They say the RAA insurance is OK but claims could easily exceed it. I pay some extra to increase it

 

Dont recall but someone isnt covered either ie pilot or pax.

 

Insurance isnt just for the aircraft but damage to buildings, roads, airport and legal claims and medical bills from THEIR insurance companies etcetc if the worst happens. Reality is you could loose much more than just the cost of the aircraft.

 

 

[Kyle Communications]

I am told the RAA insurance max for passenger is $250,000 that is not enough. If you kill yourself and a pax the relatives can sue your estate for much more. I opted for the 2 million pax insurance on my policy extra cost is around 400 per year

 

JetJR the pilot is NOT covered only the Pax

 

 

[djpacro]

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.

The aeroplane is insured for an agreed value and engine condition is one of the factors to consider so if the aeroplane is a write-off you get enough money to replace your aeroplane with one of equivalent condition. If it is repairable and an engine rebuild is involved then you get to contribute. One example I am familiar with - 35 year old aeroplane and engine. Engine way past calendar time and out of hours - insurance paid for engine strip and rebuild. Good deal, and they used the cash to go towards a new engine so now have a more valuable aeroplane - alternative was for them to let the insurance deal with it and .... before long they'd be up for the full value of a new engine.

What is the problem with insurance not paying on the engine if it failed?

 

 

[Bruce Tuncks]

Any insurance company has to pay its wages, overheads, claims and returns on capital out of its premiums. This means that the premiums must average about 3 times the claims. So if you have average claims you will get back one third of what you paid.

 

This means that you are a mug to insure unless you really can't afford the risk. For many of us, this would only be personal liability risk. Our planes are really only recreational toys and we can afford their loss.

 

There is another way of protecting yourself against personal liability, and that is to have no legally vulnerable assets. There was a lot of stuff a few years ago about protecting your assets, does anybody know about this?

 

Bruce

 

 

[turboplanner]

Any insurance company has to pay its wages, overheads, claims and returns on capital out of its premiums. This means that the premiums must average about 3 times the claims. So if you have average claims you will get back one third of what you paid.This means that you are a mug to insure unless you really can't afford the risk. For many of us, this would only be personal liability risk. Our planes are really only recreational toys and we can afford their loss.

There is another way of protecting yourself against personal liability, and that is to have no legally vulnerable assets. There was a lot of stuff a few years ago about protecting your assets, does anybody know about this?

 

Bruce

You also get free meals and lodging when you try that, it's often called fraud.

 

 

[Marty_d]

even up to $25,000 for killing a animal

I remember when practising forced landings in a C172, I asked the instructor what to do (in a real forced landing scenario) when sheep were in the way. He advised me to land anyway - apparently the sheep help you slow down quicker!

Didn't mention legal liabilities. I guess if you manage to walk away from it, you're happy to shell out to the farmer for the mutton you've just purchased.

 

 

[metalman]

I deal with insurance companies and smashed cars all day everyday,,,,the only ones who get screwed are the ones who choose insurance based solely of cost,,,,AAMI and their cohorts are the worst for getting your car repaired with TLC ,,,,,still insurance is always cheap as chips after you bounce off something

 

 

[Phil Perry]

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.

This is indeed the case in the UK, a locally based aircraft had a fire on the ground and the insurance company deducted the payout according to the hours that the engine had already completed toward TBO.

 

 

[Bruce Tuncks]

Since beginning this thread, I have actually made an insurance claim. My electric bike was stolen from the gym, where I had foolishly parked it without the locking chain. It was insured under our house policy, to my surprise, and they paid out. Mind you, the sum paid out was less than a yearly premium.

 

This was in line with my aviation experience. Our club has never been refused a claim, but we have never made more claims than the premiums.

Some gliding clubs " self insure" and are way ahead financially because of this. To my knowledge, none have ever rendered a young doctor into a quadriplegic either. If you were to do this, you sure would regret the self insurance idea, but what are the chances of that happening?

[kgwilson]

I have had house and contents insurance for about 40 years & have made 2 claims. One for a burglary and one for a fire in my garage. No problems with either claim but the the insurance company is well ahead as of course they have to be if they are to remain in business. I decided up front not to insure my aircraft so I self insure. The cost would be 2.5 to 3 k annually & on that basis I am about 15k ahead so far by self insuring. I don't know what sort of excess Aviation insurers demand but I'd think it would not be less that $1000.00.

[Downunder]

I am also ahead by about the price of a new Rotax (or close to it) without having insurance.

My aircraft is recreational, in use and registration. As such I don't consider it a necessity in life.

[Kyle Communications]

Depends on you aircraft worth and type. Mine has been insured for the 8 years it has been flying. taking rough figures of when I first insured it to what I just paid last week that total is around $15,000. That is for 60k hull insurance and I have always had the 2 million pax insurance add on. Back on 2015 My mate was flying the aircraft and had a accident. Typical and common savannah fault of the noseleg ripped sideways with a locking brake on landing. Insurance paid out 13k for the repair.....I consider that to be pretty good. especially if you take off the 2 million and just rely on the 250k the RAA insurance provides would have saved me around $3500 so to me we currently are at even after 8 years

[Bruce Tuncks]

I reckon I would like to be in an insurance co-op. Say about 100 aircraft owners formed one. Nobody pays any real money until somebody has a claim.

Then you have to pay 1% of the claim and you get to vote if you want that guy to continue in the co-op. The best members never claim of course.

This is a bit hopeful, I guess somebody needs to be paid to do the book-keeping.

[Flightrite]

Insurance is about one thing only.....peace of mind! My A/C are insured, I accept the costs knowing that at any time I could lose $150K, no thanks!

[kgwilson]

Insurance is about Risk. I am prepared to take the risk and not pay premiums. Even if you do have insurance there is a risk that your claim may be declined for whatever reason (usually something bizarre in the fine print). I have the RAA PL insurance by paying my membership and the same thing for my hangar as it is a compulsory part of the lease cost. If I total my aircraft there is a chance I may not even be around to collect even if I had hull insurance. If it is repairable & I am repairable I'll fix it myself seeing I built it from scratch in the first place.

[Flightrite]

Insurance is about Risk. I am prepared to take the risk and not pay premiums. Even if you do have insurance there is a risk that your claim may be declined for whatever reason (usually something bizarre in the fine print). I have the RAA PL insurance by paying my membership and the same thing for my hangar as it is a compulsory part of the lease cost. If I total my aircraft there is a chance I may not even be around to collect even if I had hull insurance. If it is repairable & I am repairable I'll fix it myself seeing I built it from scratch in the first place.

 

Everything we do in life is about risk! I don't want $150K to just evaporate even if I'm not around to collect, I think of my children, my A/C is part of their rightful inheritance.