Insurance Woes

[4-Shipp]

In preparation for our move from Canada back to Texas, I called several insurance companies yesterday to get quotes. I am currently insured with AVEMCO Canada (the 170 has always maintained US registration) and I got quotes from Avemco US and AIG. Consistent with what has been reported here over the last year or so, AIG was considerable cheaper and I will most likely go with them. The problem I have is that neither company would quote me on a hull value over $38K (V Ref value). The plane was purchased this last year and insured with Avemco Canada for significantly more than that. AIG said they would not quote a higher hull value without a professional appraisal and Avemco would not write the policy for more regardless. I find it hard to believe that they would not give me the same coverage as I had previously. The lady I spoke with at Avemco said that the plane was worth more in Canada (?!?) and that aircraft values have decreased in the last year. This is not a trend I have been aware of.

Has anyone had similar problems arise when renewing or change insurance companies recently?

[N1277D]

This is interesting. Avemco last April increased the hull value of my 170A to $40,500 for their quote to renew. They also increased the insurance cost by around 10% even though the previous value was $38,000 insured. I have about 1,750 hrs total time, about 1,500 hrs tailwheel time, aircraft is hangered, and no accidents or claims with Avemco or any other insurance compant. I believe they quoted me just under or around $1,000 per year. AIG was less expensive but the fine print coverage was less. I checked with AOPA and got a quote from them it was about $1,350 for the same coverage as AVEMCO.

Other points to Ponder

A friend of mine with a 172 was quoted about $800/yr with about 200 to 300 hrs total time and a hull value of about $60,000.

A friend of mine with a 210 had a gear up landing due to a mechanical problem, and Avemco fully covered the repairs. About two years later a downdraft pulled him into the trees on final and the aircraft (210) was totaled. Avemco also coved the second accident but cancled all insurance with him. He checked around and with two "claims", currently no one will insure him even though none of the accidents was due to pilot error. I believe they wanted like three years with no claims, and when they would insure the rates he said were very high. The liability was similiar in cost to what he used to pay total for hull and liability.

[N3243A]

Be thankful you don't live in Alaska where Avemco doubles the premium for the privilege of flying here. Just renewed this week for $2070, (with $35K hull) a $250 increase over last year. When I called to ask why the increase, I was told that the older tailwheel fleet is experiencing parts shortages and that claims were up. I was assured that general rate increases were not a result of 9-11. And also to be thankful that Avemco is still one of the very few insurance companies that issues policies up here and that I can get insurance at all!

Bruce

[FlyingJack]

A little off the subject but as reconfirmation of information that was previously published on this site: This past week I renewed my acft insurance. It had been thru a broker and was with AIG. The broker quoted me $1,493. I let the coverage lapse, then called AIG direct. The exact same coverage coming directly from AIG was $875. You guys just saved me $618. THANKS!

[planepilot1]

As a comparison, I have insured with AIG for many yrs. My policy expires in Sept 02. I have a '56 C-172 w/ tailwheel conversion, 1900 hrs total w/ 1650 in conventional gear.

Expiring policy: Hull-$35,000; Liab-$ 1 million occurance; $100,000 ea passenger; Med-$3,000 ea passenger; Ded-$100 in motion and not in motion; Premium-$777 (Actual ins company is Insurance Co of the state of Pennsylvania)

Renewal policy: Hull- $40,000; other coverages & limits same as above;Premium-$821 A 6% increase for a little over 14% increase in hull limit. Also had a quote from them for hull value of $35,000 (as expiring) for annual premium of $816.

I have been fortunate to never having to use my aircraft insurance (thank goodness), but have been much more pleased w/ AIG. I had gotten a competitive quote (with higher ded's) from AVEMCO @ considerable more premium. Replier N1277D said he found "LESS" coverage in the AIG policy than in AVEMCO. I would be curious what areas he found lacking in the AIG form--------would be good for him to pass this on to other members.

Above premium increases are well in line with what I expected. I am in the insurance business (Inland Marine underwriter) and I am averaging 15% increases on renewal risks with good experience & greater increases on those with loss problems if I offer renewal at all. Remember, these ins co's are just like the gas station down the street, the baker, hardware store, carpet cleaner, etc. they are in business to make a profit (overall not just your policy) and will adjust coverages, ded's and premiums to attempt to accompolish what their stock holders & directors demand.

Good luck! N6888A

[N1277D]

Its been a while but if I remember correctly there was a difference in coverage between AIG and AVEMCO for flight operations in Canada. Idaho is so close to Canada it necessary to have "seamless insurance", that was the main difference I remember. But then again it could have been something else.

[GAHorn]

I carry $50K hull on my '53 model, but the first-time I insure with any carrier they make me justify that value with documentation. I do so on the basis of the complete restoration and in reference to judging awards, and included photos. They've never fussed after that. My point is that in my experience, photos of your airplane (if in good condition) are convincing to insurance companies, regardless of their own appraisal methods/capabilities.
Keep in mind that if your aircraft is damaged, and you want it re-built, then you'd better not skimp on declaring and paying the premiums for higher hull value. A $35K hull value will put your airplane in the scrap-heap when damage exceeds about $18-23K, because they can total-out and sell your wreckage (or hail damaged plane) and it's engine/avionics and come out ahead. (I intend to increase my hull coverage still more, next renewal.)

[JDH]

Hey Bruce, when renewal came around last May, Avemco wanted 40% more than the previous year (200 hours later). When I first insured the 170B, being it was my 1st TD, I had to pay a price for that, with the understanding that I needed 5 hours dual and that after 25 hours, I would get a reduction, then after 50, then after 100 hours. They probably didn't figure I'd have 100 hours in a couple of months. They were good to their word; but, at the end of the 12 months...
I asked why the premiums on a Mooney goes up 35% and on 170 goes up 40%. 2 different brokers told me that insurance companies are trying to get the "old Cessna tail draggers" off their books, because of where they are being used (bush, skis, floats, etc). Sucks, don't it? The schools around here have a restriction on their coverage: Cannot land on grass strips or fields. It is more and more evident that these companies are not in the businness to cover your derrière, they are in the business of making money and covering the derrière of their share holders...
All the brokers suggested the same thing when I bitched and whined about the increase: Why not insure for a lesser value? Yeah, right, one bad luck; wind sheer, snow bank, flat tire, etc, that would mean a ground loop or prop strike (or both), ding a wing, get caught outside in hail, etc... And they'd gladly write it off, but where would I get me a bird in the same shape as Sally for peanuts???
Shop, shop, shop... Word is AIG is best buy in the US; can't get it here in Canada. So, besides leaving Winterpeg, friendly Manitoba (my eye), moving to God's country (Texas) and better weather, you'll have more choice for insurance.
Good luck, JD

[N1478D]

Hi JD, God's country is a little strong for parts of Texas. Austin, Fredericksburgh, and some others probably qualify. Wichita Falls, Dallas, and some others are not exactly Devil's country, but it is kind of hard to gaze out upon the waste land and think of God's country.

[wa4jr]

So the schools will not let you land on grass strips Is this limitation just for the tail draggers? I'd be willing to bet that paved strips have claimed many more tail draggers than grass strips

[JDH]

Actually, it is insurance companies that will not let school planes or rental planes (150's, 172's and cherokee types) land at grass strips. For the longest time, the one place I know of made a big stink about not flying their nose draggers into gravel strips; now, that I can understand. The reason, I think, that they don't like rentals to get into grass is as follows: There's been lots of guys run off grass runways in hot humid weather because of poor technique. Last summer, I saw a poor soul out of a 4000' paved runway come in to a 2300' grass strip for a fly-in breakfast; withh a nice Piper Archer III; 4 people on board, 30º C temp, he tried to pull it off too soon and instead of pushing on the stick, he insisted on pulling and mushed along and ran into a freshly trenched field (for irrigation). Other reason is wet, soft fields with poor drainage. Another is ice under the grass and all that. Gopher holes and low prop clearance. Grass as we know is forgiving, but can also be very slippery and cause a little panic for those who come in hot with their speedy? nose draggers. JD

[GAHorn]

Some insurance underwriters will not insure an airplane based on an airport with grass runways ONLY. My strip has one paved and one grass runway, so most carriers have no problem with it. Even those carriers who will not insure an airplane whose home base is grass, will still allow operations on grass strips, however, as long as the strip is actually marked upon an approved navigational chart, such as a Sectional.
Some pilots/operators fall into the mistaken idea that just because their insurance underwriter will not write a policy for an aircraft home-based on grass,....that grass-strips are forbidden. Not necessarily so. I've specifically asked USAIG, AIG, AVEMCO, and several others. All their responses were the same: If the airstrip is published then it's approved, surfaces notwithstanding. But home bases which are grass/turf/dirt only, are either not insured, or are insured at increased premiums.

[AKbushpilot]

I have been with AVEMCO for 2 years now and am quite satisfied with them. I have a wopping 250TT (in civilian aircraft) with the same amount in MM. My primeum is $2800 a year for $50,000 of coverage. The same plane in the lower 48 would be 1/4 to 1/3 the cost. Putting the 170 on floats triples the amount for the time you have it on floats. Hopefully with this new "Sport Pilot license", more people will get insurance and increase the "financial pool" thereby theoretically reducing the overall rates. Of course if these people fly like the ultralight pilots (lack of any airsense, curtisy, either in the air or on the ground), they will deplete the pool the first year. Anyway, the whole aviation insurance industry is designed to raise money, not cover airplanes. Most light plane accidents involve replacing/repairing the plane and it is cheaper to total the airplane and sell the parts. It's like the Enron scandle...pay the claim, claim the loss as an expense, then sell the parts and claim it as a "profit" In addition, the amount of liability cases is low as they all go after the manufactures, parts makers, and what ever else they can go after. It's the way of the world nowadays. Just be thankful that State legislatures have not mandated insurance like they do on automobiles. The majority of us that live to fly would have to supplement those that fly once a month and barely maintain any kind of currency. My view from the north.

[GAHorn]

Wouldn't a state-mandated insurance requirement (a la auto insurance) actually lower premiums? Your comment (re: recreational pilots) implies that more insureds means lower premiums, so wouldn't a requirement to carry insurance also do the same thing? And since the insurance would be mandated, the insurance companies would have to have an "assigned risk" pool, which would guarantee that the required insurance be affordable.
I buy insurance. I wish everyone did. If I am injured by someone who has no insurance, the unfortunate likelihood is that person is also not worth suing for the damages. Imagine if some uninsured leaves his airplane impropely tied down and it is blown into your aircraft. Or what if he also doesn't spend money on mx, and his brakes fail and he chops your airplane or you with his prop? (And I'm not sure I like the idea of someone who won't maintain and insure airplanes out here operating with the rest of us. Whew! This is a hot potato, huh?)
As much as I hate gov't interference in our private lives, and especially as much as I hate new laws, don't you think a mandated liability insurance policy has merit? It sounds better to me all the time. If everyone had liability insurance, then I could drop my comprehensive and only pay for my own mistakes, not the ones of those uninsured about me. (Liability is cheap. It's the hull that costs.) (Of course the problem might be that states have no authority with regard to airplanes, so it may have to be a federal requirement. Already it sounds complicated.)

[wa4jr]

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 I will not repeat the language that came out of my mouth regarding AVEMCO here, but suffice it to say that I am VERY glad to be away from those snakes I looked in the AVEMCO policy and there is mention of a 90% refund pro rata yata yata yata legaleeeze mumbo jumbo that they are saying justifies the 10% cancellation fee and that I should have been aware of it. BEWARE of AVEMCO as the policies are worded so that you have no idea what you have and they can then pull some nasty tricks on you

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 NICE folks to deal with, with a real nice premium of just over $1000/yr that will decrease to below $1000 next policy year with applicable discounts and a claim free provision