Avemco does indeed have a few "quirks" regarding their policy language. I've mentioned this before but it bears repeating:
If you are insured by Avemco, be aware that their liability policy has reduced protection if your passengers are family. Despite the $100K you may think you have protecting your passengers,...in actual fact, Avemco has a "family exclusion" limit. Your family, is only covered to $25K even tho' you may be paying for $100K of coverage. That is the major reason their premiums are typically lower than the competition. After all, the most common passenger you are likely to have onboard is probably a family member. Think about it.
Insurance Woes
Moderators: GAHorn, Karl Towle, Bruce Fenstermacher
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planepilot1
- Posts: 49
- Joined: Fri Apr 26, 2002 1:02 am
Aircraft Insurance
The idea of requiring aircraft owners to carry liability insurance - in an amount adequate to pay for damage or bodily injury to persons-isn't a bad idea, IF the states or whomever is going to be requiring it will put some teeth into enforcing it. Some states REQUIRE auto liability and if you are caught without it they will yank your license, pull your license plates and fine the H_ _ _ out of you. Unfortunately the state of Texas doesn't have much of an enforcement arm. Lots of folks buy a policy to get their license plates and /or drivers license and let it lapse after a month. The aircraft deal would have to be better than the auto.
Another problem WE insurance purchasers have is that WE do not read our policies and if WE don't understand something in the policy WE don't go to our broker and ASK or DEMAND clarification. That insurance policy you paid for, whether life, health, homeowners, auto, liability, aircraft or whatever, is a LEGAL CONTRACT between you (us) and the insuring company. It is no different from any other contract that we as citizens execute on a daily basis. How many of you would enter into a contact with someone to purchase a house or other binding agreement without reading and hopefully understanding the contact? Better do the same with your insurance contract! I use the word WE because I, as an insurance person, don't always read the contracts either . I deal with them on a daily basis and many times I find something I thought was one way or the other is clearly spelled out as being different.
Keep in mind as I have said here before, the insurance companies are like any other business up and down the street, they are in business to make their stockholders a profit. If they fail to do so over a period
of time those stockholders will "fire" the officers and get new ones. If everone was financially independent you wouldn't have to carry insurance your car or home, but until that happens the lending institutions are not going to loan their money without protection. Without the ins co's it all comes to a frighteningly quick stop.
So much for my diatribe this time!
N6888A
[/b]
Another problem WE insurance purchasers have is that WE do not read our policies and if WE don't understand something in the policy WE don't go to our broker and ASK or DEMAND clarification. That insurance policy you paid for, whether life, health, homeowners, auto, liability, aircraft or whatever, is a LEGAL CONTRACT between you (us) and the insuring company. It is no different from any other contract that we as citizens execute on a daily basis. How many of you would enter into a contact with someone to purchase a house or other binding agreement without reading and hopefully understanding the contact? Better do the same with your insurance contract! I use the word WE because I, as an insurance person, don't always read the contracts either . I deal with them on a daily basis and many times I find something I thought was one way or the other is clearly spelled out as being different.
Keep in mind as I have said here before, the insurance companies are like any other business up and down the street, they are in business to make their stockholders a profit. If they fail to do so over a period
of time those stockholders will "fire" the officers and get new ones. If everone was financially independent you wouldn't have to carry insurance your car or home, but until that happens the lending institutions are not going to loan their money without protection. Without the ins co's it all comes to a frighteningly quick stop.
So much for my diatribe this time!
N6888A
[/b]
Frank Stephenson
I don't know about AVEMCOs lower rates, George. I felt like I was bent over the fence and....well....shall we say used by them. I was stuck with a premium rate in excess of $1700 per year. As I recall the rate from the AOPA program was a bit cheaper. I went with AVEMCO soley because they would insure me with only 17 hrs taildragger time. I never intended to stay with them after I learned AIG could give me an excellent policy for $1100 per year with 50 hours tailwheel time. Just had to wait for the 50 hour mark to come along and then jump ship. Hearing your comment regarding their lower coverage for family while still charging you for full coverage makes me double glad I got away from them 
John, 2734C in Summit Point, WV
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Rudy Mantel
Insurance
John, it's perfectly normal, in any aviation insurance policy, that when you cancel before your policy expires there is a pro rated adjustment of the refund.
I insure with AVEMCO. My hull value is $50,000 - I had to submit invoices for the avionics/improvements before they would increase the value from the previous $40,000. My airplane is hangared, I have many thousands of accident-free tailwheel hours (over 4,000 in 180's alone) and only a few brief seconds of accidents. Also, I'm 70 years old.
With the usual inadequate liability coverages my premium went up from $1,000 to $1,200 which I consider reasonable.
Rudy
I insure with AVEMCO. My hull value is $50,000 - I had to submit invoices for the avionics/improvements before they would increase the value from the previous $40,000. My airplane is hangared, I have many thousands of accident-free tailwheel hours (over 4,000 in 180's alone) and only a few brief seconds of accidents. Also, I'm 70 years old.
With the usual inadequate liability coverages my premium went up from $1,000 to $1,200 which I consider reasonable.
Rudy
Avemco
I've been with Avemco for about 10 years and never had a claim so I can't comment on "doing business" with them. The premiums have been reasonable over the years.
However ........ just received a letter from them saying that they are no longer underwriting aircraft policies in Canada. When mine comes due in December, I'll have to find another insurance company (Ugh!) The choices are getting mighty slim.
However ........ just received a letter from them saying that they are no longer underwriting aircraft policies in Canada. When mine comes due in December, I'll have to find another insurance company (Ugh!) The choices are getting mighty slim.
JDS, look at the new and improved COPA programs. When I renewed in April, I got a surprizing large increase proposal from AVEMCO. That took me shopping and I ended up getting the gold plan with better coverage than with Avemco and for about the same price and no restrictions to fly into Mexico, Alaska, family members, etc.
Good luck, JD
Good luck, JD
My insurance ran out with a company in washington state. I thought I'd try for a better price after reading some of the posts. I called the 800 number listed on one of the above post and talked to Jennifer. She told me that her underwriter would not quote me for the club rate for insurance because I was on a sod private strip. She said I could move my airplane and then they would quote a price.So I quess those who are with AIG on a public sod strip are lucky 
. Maybe they don't like me. I am not sure what I will do at this time. Maybe have an airplane for sale???-
Bill Venohr
- Posts: 90
- Joined: Tue Apr 23, 2002 1:42 pm
I don't understand the insurance issue with grass/sod strips. That is what these planes were built for and are a lot more forgiving than asphalt or concrete. Maybe the accident rates are higher due to misjudging surface conditions. When I was much, much younger (and less mature) I landed a Bonanza gear up on asphalt. 
I didn't know I was doing it at the time or I would have picked a surface more forgiving, but the smoke and concern for fire/explosion got my attention 
(its funny how weird observances you have in the heat of the moment are remembered--in this case I was bemused by how close to the ground the flaps were (as I was sprinting away from the plane) even though I knew I had just put it on its belly) 
.
I didn't know I was doing it at the time or I would have picked a surface more forgiving, but the smoke and concern for fire/explosion got my attention (its funny how weird observances you have in the heat of the moment are remembered--in this case I was bemused by how close to the ground the flaps were (as I was sprinting away from the plane) even though I knew I had just put it on its belly) .Bill Venohr
N4044V
Aurora, CO
N4044V
Aurora, CO
I don't remember which underwriter it was that I was visiting with, but when I purchased a policy from them they didn't care one whit whether I was based on grass or hard-surfaced runways. I think it was AIG.
In any case, it came about that none of the underwriters I've insured with over the years cared if I landed on grass or not as long as it was a published airport. On my place I have one 3400' grass (11/28 ) and one 4000' paved (3/21) runway. (The paved one doubles as a driveway. I only use it when there's a really strong x-wind across the grass, or the turf is waterlogged, or when landing at night, as only the asphalt rwy has lights.)
I wonder how much length you'd have to pave just to be able to list it as hard surfaced? Would 10 ft be enough?
In any case, it came about that none of the underwriters I've insured with over the years cared if I landed on grass or not as long as it was a published airport. On my place I have one 3400' grass (11/28 ) and one 4000' paved (3/21) runway. (The paved one doubles as a driveway. I only use it when there's a really strong x-wind across the grass, or the turf is waterlogged, or when landing at night, as only the asphalt rwy has lights.)
I wonder how much length you'd have to pave just to be able to list it as hard surfaced? Would 10 ft be enough?
Hey George, you mean 10/28, don't you...
If you decide to "base" your airplane at a paved or published runway and "park" it overnight at your grass strip, make certain you have a lease or some sort of official document that supports where you are based. You can't just change it in the registry and not be a "resident" at that airport, or if you ever have a little mishap, anywhere, the investigator will look at your logs and unless you cheat, alot of your trips would end up at your strip for days on end and not at your base.... Fishy, no...
When I lived in the province of Québec, Avemco would not insure me if my plane was based there, because of the insurance regulations in Québec, they can't insure unless they have an office in that province. But if I was based right next door in Ontario (which I was), eventhough I lived in QC, they would insure my plane. I asked if there would be any problem for me to overnite it near the campground in St-Lazare, QC. "No" was the answer; I could keep it there, for example for the whose summer, as long as my lease was still in effect in Ontario... So, is it cheaper to pay rent on hardtop and not be there or insist they visit your strip (if they will) to approve it, or get an insurance co. that will... There has to be solutions. Maybe check with AOPA, they may be able to help. But don't sell your plane over this.
Good luck,
JD
If you decide to "base" your airplane at a paved or published runway and "park" it overnight at your grass strip, make certain you have a lease or some sort of official document that supports where you are based. You can't just change it in the registry and not be a "resident" at that airport, or if you ever have a little mishap, anywhere, the investigator will look at your logs and unless you cheat, alot of your trips would end up at your strip for days on end and not at your base.... Fishy, no...
When I lived in the province of Québec, Avemco would not insure me if my plane was based there, because of the insurance regulations in Québec, they can't insure unless they have an office in that province. But if I was based right next door in Ontario (which I was), eventhough I lived in QC, they would insure my plane. I asked if there would be any problem for me to overnite it near the campground in St-Lazare, QC. "No" was the answer; I could keep it there, for example for the whose summer, as long as my lease was still in effect in Ontario... So, is it cheaper to pay rent on hardtop and not be there or insist they visit your strip (if they will) to approve it, or get an insurance co. that will... There has to be solutions. Maybe check with AOPA, they may be able to help. But don't sell your plane over this.
Good luck,
JD
Hi, JDH! Actually I meant (11/29). You meant "whole summer",...right?
Lots of airplanes are "based" at an airport they almost never visit. Look at any airliner. But I'm sure most policies define the term, and probably mean that airport at which the airplane is predominately hangared or tied down. Still, I think it would be difficult for an insurer to refuse to pay a claim on an accident occuring at any grass runway as long as the policy doesn't specifically prohibit such surfaces. The lease agreement would be a nice touch, but I doubt it would stand up under a determined attack if the airplane didn't spend a lot of time there.
Any reputable insurer will cover a claim as long as it's not outright fraudulent or a violation of the policy terms.
Lots of airplanes are "based" at an airport they almost never visit. Look at any airliner. But I'm sure most policies define the term, and probably mean that airport at which the airplane is predominately hangared or tied down. Still, I think it would be difficult for an insurer to refuse to pay a claim on an accident occuring at any grass runway as long as the policy doesn't specifically prohibit such surfaces. The lease agreement would be a nice touch, but I doubt it would stand up under a determined attack if the airplane didn't spend a lot of time there.
Any reputable insurer will cover a claim as long as it's not outright fraudulent or a violation of the policy terms.
Hello doakes....sorry to hear AIG will not let you base on grass. I think you should call them up again. I called with just that question about three weeks ago. Wanting to move from a paved strip to a grass strip of comparable length. The lady (can't remember her name) had to call be back in order to have time to research the situation, but said she thought it would not be a problem. She called back in less than an hour and confirmed that I could indeed move my 170 from a paved airport to a grass airport with no change in premium or coverage limits. Seems either you or I got some bad info....and I hope it was YOU 
Call AIG again and pose the question.
As for the early cancellation penalty, I see that Virginia law unfortunately allows this unethical practice. AIG said they would be allowed to charge for early cancellations, but did not say they would. For me, it all boils down to what is "the right thing to do". Do you charge your customers for a service that HAS NOT been provided, or do you allow the customer to cancel with no penalty. I know what I would do if I owned the business. Once you piss off a customer (me), you never see them again. Something the insurance industry has yet to learn...or perhaps it is just AVEMCO that enjoys clubbing their customers in the head
I have the last laugh though....$1750/yr with AVEMCO and bingo bango over to AIG for $1035/yr. HAHAHAHA
Call AIG again and pose the question.As for the early cancellation penalty, I see that Virginia law unfortunately allows this unethical practice. AIG said they would be allowed to charge for early cancellations, but did not say they would. For me, it all boils down to what is "the right thing to do". Do you charge your customers for a service that HAS NOT been provided, or do you allow the customer to cancel with no penalty. I know what I would do if I owned the business. Once you piss off a customer (me), you never see them again. Something the insurance industry has yet to learn...or perhaps it is just AVEMCO that enjoys clubbing their customers in the head
I have the last laugh though....$1750/yr with AVEMCO and bingo bango over to AIG for $1035/yr. HAHAHAHA John, 2734C in Summit Point, WV
Just as an addendum: Avemco sent me a notice 60 days ago that my policy was due another $299 payment for the last quarter of the policy. Since that was 60 days before it was due I ignored it, planning to pay them via credit card about a day or two before it was due. Thirty days before it was due they sent a threatening letter. Two weeks before it was due they sent a cancellation notice. Three days before it was due, I called them and gave them authorization to charge my credit card for the amount. On that very same day, I rec'd an INVOICE from them for the next year's policy (which starts Dec. 24th) which states that the payment for the next years policy is due 9/18/02!!!!! I next rec'd a threatening letter that my policy will not be renewable if it's not paid by the due date! (9/18/02), which is 3 months before the policy even starts!!!
Do you imagine I might be changing insurance company's soon? AIG never acted this way.
Do you imagine I might be changing insurance company's soon? AIG never acted this way.
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Stan_Lindholm
- Posts: 27
- Joined: Wed Aug 28, 2002 12:26 pm
"Short Rate" vs "Pro-Rata" refunds
I'm replying to John's post on 9/19.
Don't get me wrong -- I would NEVER want to be accused of defending an insurance company, but I believe this is a standard practice -- not an AVEMCO only thing. The reasoning behind it is that the company calculates the premium for a full year of exposure, not a partial year. A good example is aerial applicators. An insurer quotes the applicator knowing he will only be spraying for a few months in the summer (in much of the country), but the policy is written for the entire year. What's to stop the applicator from buying his insurance in the spring and canceling in the fall? Now the company has taken all the risk for a fraction of the premium -- a good deal for the applicator, but not the insurance company. Aerial applicators actually pay a MUCH higher penalty for canceling before their expiration date. Essentially the entire premium is "earned" in something like four months if memory serves. (So if he/she cancels after four months -- they don't get ANYTHING back.) The same cancellation penalty exist in other insurance polices such as motorcycles and boats. The industry term for this is "short rate cancellation".
In your case, John, it might be argued that AVEMCO agreed to insure you for the full year for $1,659. It could be argued that their greatest risk was during your first 50 hours. Now after you get your 50 hours you cancel and want a "pro-rata" refund, but they have already taken a good part of the risk.
No, I am not in the insurance business, but I did work in the industry many years ago (for one of AVEMCO's competitors.) And again, I am not defending AVEMCO or any other insurer. But I believe this is a standard practice and I hope my explanation shows why. I am also not making any judgments on your ability or insurability.
For what it's worth, I have two renewal quotes (waiting for more) in the $1,400 range. I have an ATP certificate and 15,000 hours, 75 in make and model, 100 tailwheel. I'm 45 years old with no accidents, incidents or inappropriate body odor. My airplane is ALWAYS hangared (I promised the guy I bought it from…) and based at an airport with a paved runway. (Don't tell anyone, but most of us taildragger pilots -- including the airport owner -- use the grass beside the runway...) No one wants to quote me for $43,000 hull - what I paid for my 170B last year. The insurers all tell me "it's only worth $35,000" because the geniuses in the office that don't know what a 170 looks like looked it up in their "Blue Book". Says so right there - that's all it's worth. (I asked them to go find 10 just like mine, and I'll buy ALL of them for $35,000 each. Didn't get much of a reaction…) I'm thinking seriously about dropping hull coverage… Also, no one (so far) will give me the liability limits I want. $1,000,000 with $250,000 per passenger is the highest I can get. I would like $1 million with no seat limit. See? I'm no fan of insurance companies either. (Actually, it's LAWYERS and our so-called social justice system that are the problems, but that's a whole other post!)
Stan Lindholm
N8287A
Don't get me wrong -- I would NEVER want to be accused of defending an insurance company, but I believe this is a standard practice -- not an AVEMCO only thing. The reasoning behind it is that the company calculates the premium for a full year of exposure, not a partial year. A good example is aerial applicators. An insurer quotes the applicator knowing he will only be spraying for a few months in the summer (in much of the country), but the policy is written for the entire year. What's to stop the applicator from buying his insurance in the spring and canceling in the fall? Now the company has taken all the risk for a fraction of the premium -- a good deal for the applicator, but not the insurance company. Aerial applicators actually pay a MUCH higher penalty for canceling before their expiration date. Essentially the entire premium is "earned" in something like four months if memory serves. (So if he/she cancels after four months -- they don't get ANYTHING back.) The same cancellation penalty exist in other insurance polices such as motorcycles and boats. The industry term for this is "short rate cancellation".
In your case, John, it might be argued that AVEMCO agreed to insure you for the full year for $1,659. It could be argued that their greatest risk was during your first 50 hours. Now after you get your 50 hours you cancel and want a "pro-rata" refund, but they have already taken a good part of the risk.
No, I am not in the insurance business, but I did work in the industry many years ago (for one of AVEMCO's competitors.) And again, I am not defending AVEMCO or any other insurer. But I believe this is a standard practice and I hope my explanation shows why. I am also not making any judgments on your ability or insurability.
For what it's worth, I have two renewal quotes (waiting for more) in the $1,400 range. I have an ATP certificate and 15,000 hours, 75 in make and model, 100 tailwheel. I'm 45 years old with no accidents, incidents or inappropriate body odor. My airplane is ALWAYS hangared (I promised the guy I bought it from…) and based at an airport with a paved runway. (Don't tell anyone, but most of us taildragger pilots -- including the airport owner -- use the grass beside the runway...) No one wants to quote me for $43,000 hull - what I paid for my 170B last year. The insurers all tell me "it's only worth $35,000" because the geniuses in the office that don't know what a 170 looks like looked it up in their "Blue Book". Says so right there - that's all it's worth. (I asked them to go find 10 just like mine, and I'll buy ALL of them for $35,000 each. Didn't get much of a reaction…) I'm thinking seriously about dropping hull coverage… Also, no one (so far) will give me the liability limits I want. $1,000,000 with $250,000 per passenger is the highest I can get. I would like $1 million with no seat limit. See? I'm no fan of insurance companies either. (Actually, it's LAWYERS and our so-called social justice system that are the problems, but that's a whole other post!)
Stan Lindholm
N8287A
wa4jr wrote:Since I did not have 50 hrs in taildraggers when I purchased my 170B in June, I went with AVEMCO as they were one of the few who would insure me. A whopping $1659 per year! I talked with the nice folks at AIG and they said that when I got 50 hours to give them a call for a MUCH lower rate. When I had 51 hours, I dropped AVEMCO like a hot potatoe and went with AIG. Now I get a terse statement from AVEMCO saying that I owe them a 10% cancellation fee
AIG has been VERY nice so far. I inquired today about moving my aircraft off of the paved field with the high prices to a grass field with low prices. AIG said there would be no change in premium for basing my 170 on grass
Stan Lindholm
N8287A
N8287A