David Isaac Posted June 30, 2014 Posted June 30, 2014 Just had private aviation excluded by insurers for my new income protection policy because I disclosed I do recreational aerobatics. The following underwriters have excluded private aviation cover: AIA Life Asteron Macquarie Life OnePath TAL Zurich Australia Life Limited. Back in 1997 I had aerobatics excluded from a 'Recovery cash' life policy, so I wrote to the insurers detailing that pilots properly trained and endorsed in aerobatics are arguable higher skilled than those not trained and endorsed and that the risk was no higher than general flying. (we are talking about recreational aerobatics, not low level display). My letter to the underwriters in 1997 detailed the CARs and requirements and was successful in having the aerobatic exclusion lifted in the policy back then. It was accepted in 1997 but not now in 2014. This policy is income protection only, no death cover, and this time they are excluding private aviation activities completely allegedly because I disclosed the aerobatic activity. I have attached the letter I wrote in 1997. Has anyone else had this experience? I would value any opinions on this as I find it staggering that in spite of my letter that the underwrites are excluding all recreational aviation activity. Acrobatic exemption from cover.pdf Acrobatic exemption from cover.pdf Acrobatic exemption from cover.pdf
Bandit12 Posted June 30, 2014 Posted June 30, 2014 I have to look into my income protection insurance as it is handled through my super fund. My AMP life insurance policy covers aerobatics, and I was surprised about the extent to which they questioned it too. Number of hours per year, class of licence etc.
facthunter Posted June 30, 2014 Posted June 30, 2014 I would be surprised if they didn't check these things out. They are about making a profit and part of that is checking the risks from their side of the deal. We have had some very good aerobatic pilots die doing them, and it should be easier to kill yourself if you are not good. It's the same with a tailwheel plane. They want to know how many hours of T/W experience those who fly it will have. Nev
David Isaac Posted June 30, 2014 Author Posted June 30, 2014 Yes we have had a few professional deaths Nev, but they all involved extreme aerobatics at low level, usually display. I made it clear to the insurer the aerobatics were recreational and not below 3,000' and not of a competition nature, limited to loops, rolls, stall turns and spins. It was accepted in 1997, so what has changed since 1997? Has the risk profile increased?
facthunter Posted June 30, 2014 Posted June 30, 2014 No. Your points are valid, but I posted theirs and they call the shots. There is not as much competition in the insurance industry as there should be. There has been a concentration of ownership lately which I believe needs explaining as to why it was permitted to happen. Nev 2
nickduncs84 Posted June 30, 2014 Posted June 30, 2014 General aviation in general is an issue for life insurance according to my accountant. It would have been less so if I had established the policy before I began my training, but getting a policy at this stage will apparently result in a big jump in premium. I'm guessing that insurance companies have complex risk profiling tools that look at the presence of a particular attribute and it's correlation to death. I doubt the model goes much deeper than the top line increase in probability of someone who is a pilot dying in a plane crash versus someone who isn't. To a certain extent, they probably have a fair point, as I'm sure the average pilot with average skills thinks that something about the way that they fly makes them less likely to crash than the average pilot. On the other hand, there's no doubt that training, attitude, aircraft, etc do impact on crash rates. At the end of the day, you can't blame the insurance companies, especially when the biggest factor (pilot attitude) is hard to model. 1
David Isaac Posted June 30, 2014 Author Posted June 30, 2014 I think that they think they are pretty good at modelling. As I said I have not had this problem before and I have always declared my flying activities and aerobatics and only had the one problem in 1997 which was resolved with my letter. So either the risk profile has changed or there needs to be more competition among insurers.
nickduncs84 Posted June 30, 2014 Posted June 30, 2014 Yes you may well be right on both. Is there any way to get feedback from the insurance company on whether the risk profile has changed? The other questions is, if it's common amongst insurance companies to exclude recreational aviation, and we believe that the risk profile may be flawed, can Ra Aus work with one of the underwriters to come up with a solution? it would seem to me that if there was only one underwriter available for 10,000+ people it would be worthwhile for both parties..
facthunter Posted June 30, 2014 Posted June 30, 2014 They are probably lazy and use the same basic actuarial assessment data industry wide. Nev 1
David Isaac Posted June 30, 2014 Author Posted June 30, 2014 It is not just an RAAus issue, it applies to all recreational aviation which includes PPLs.
turboplanner Posted June 30, 2014 Posted June 30, 2014 I think that they think they are pretty good at modelling. As I said I have not had this problem before and I have always declared my flying activities and aerobatics and only had the one problem in 1997 which was resolved with my letter.So either the risk profile has changed or there needs to be more competition among insurers. If you recall there was one VERY public aerobatic fatality where the pilot was alleged to be unfit to fly, and it was alleged that he had not been restrained from flying by several key people/bodies and there was an innocent paying passenger involved, so this would likely have gingered up the emotions of insurers offering big dollar covers without some careful research. I think your approach in 1997 was as good as any. 1
Downunder Posted June 30, 2014 Posted June 30, 2014 So....what your saying is, a one legged, eighty year old, asthmatic, chain smoking, motorcycle rider, parachutist and recreational aerobatics devotee is in for some serious premium increases...... 1
fly_tornado Posted June 30, 2014 Posted June 30, 2014 Nearly all insurance companies buy their risk from Lloyds, they have the option to buy risk based on all sorts of lifestyles and dangerous activities. What the insurance companies are doing is no longer buying that extra risk of aerobatics. That's why you see so many standardised insurance contracts. I hate to say it but its another bad sign for GA when that risk is no longer insurable.
Scotty 1 Posted June 30, 2014 Posted June 30, 2014 So....what your saying is, a one legged, eighty year old, asthmatic, chain smoking, motorcycle rider, parachutist and recreational aerobatics devotee is in for some serious premium increases...... I see you have meet David! 2
facthunter Posted June 30, 2014 Posted June 30, 2014 Such behaviour would void any insurance cover Turbs, anyhow. You cannot require people to cover a liability although in theory the risk would be potentially assessable, and a premium could be arrived at. Low fruit gets picked in preference. GA flying is a lot safer than many things, and how YOU go about it gives you a big say in how safe it is for you. The biggest risk to your plane is on the ground. Nev
David Isaac Posted June 30, 2014 Author Posted June 30, 2014 I see you have meet David! ha ha ... you will keep sweetheart ... LOL
David Isaac Posted June 30, 2014 Author Posted June 30, 2014 My problem arose because I disclosed the aerobatics, if I had not, aviation would be covered but limited to not more than 50 hrs per year.
Scotty 1 Posted June 30, 2014 Posted June 30, 2014 My problem arose because I disclosed the aerobatics, if I had not, aviation would be covered but limited to not more than 50 hrs per year. Sometimes it is better to ask for forgiveness instead of permission. The not more than 50 hours per year could be a problem too. 1
Oksinay Posted June 30, 2014 Posted June 30, 2014 It's only an exclusion, right? What's wrong with you accepting that part of the risk? If the policy is priced for a "normal" person engaging in "normal" activities then it is priced for "normal" risk. Try declaring that you engage in unsafe sex and see what the policy cost is. It's all about risk.
David Isaac Posted June 30, 2014 Author Posted June 30, 2014 It's only an exclusion, right? What's wrong with you accepting that part of the risk?If the policy is priced for a "normal" person engaging in "normal" activities then it is priced for "normal" risk. Try declaring that you engage in unsafe sex and see what the policy cost is. It's all about risk. Nothing wrong with accepting the exclusion and that is exactly what I will do if I cannot find a company that will accept the risk. It is only income protection not a death cover. I already have death cover on existing policies that do not exclude aviation.
Oksinay Posted June 30, 2014 Posted June 30, 2014 Nothing wrong with accepting the exclusion and that is exactly what I will do if I cannot find a company that will accept the risk. It is only income protection not a death cover. I already have death cover on existing policies that do not exclude aviation. And when you find a reasonable insurer let us all know - common grounds for support 1
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