Insurance cost of Milton

brien23

brien23

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Brien
Milton is probably going to cost insurance loss and rates to all of us to go up again, as if it was not high now.FLA.jpg
 
I think my agents are going to relax.
“Now we have a (ostensibly) tangible excuse to give for the crazy rate increases”
 
It's frustrating that many people would rather get an insurance payout instead of selling the plane to someone. Their laziness increases the cost and decreases access to GA for so many people.
 
Let's be honest. The insurance companies should be including hurricane risk in their premiums for airplanes in at-risk locations. Same with houses. There's no reason "the public" needs to subsidize beachfront homeowners.
 
There are *so* many hour building CFIs and the like, especially in Florida, who'd jump at the chance to fly a plane out of harm's way for expenses only - and many insurers cover some of all of the expenses of relocating.

Of course it's not a viable option for everyone but it would cover a lot of the fleet, especially the standard Piper/Cessna etc.

Given this I don't understand why so many airplanes get left to die. Maybe it's like MountainDude said - owners who'd like to be rid of them.
 
Catastrophe payments usually come from the re-insurance market which is a much bigger pool than the direct loss segment.
 
Katamarino said:
There are *so* many hour building CFIs and the like, especially in Florida, who'd jump at the chance to fly a plane out of harm's way for expenses only - and many insurers cover some of all of the expenses of relocating.

Of course it's not a viable option for everyone but it would cover a lot of the fleet, especially the standard Piper/Cessna etc.

Given this I don't understand why so many airplanes get left to die. Maybe it's like MountainDude said - owners who'd like to be rid of them.
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Because all those CFI’s got nothing else to do when a hurricane is approaching. Their own homes and families will take care of themselves, right? And where to go? How about far inland? I wonder if anyone relocated their airplanes for Helene up to Asheville?
 
donjohnston said:
Because all those CFI’s got nothing else to do when a hurricane is approaching.
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Many of them - yes, exactly that. I saw a whole bunch of posts on FB from CFIs in FL and elsewhere offering to relocate aircraft free of charge for both of the recent major hurricanes.

Just because you can cherry pick examples where it doesn't work, doesn't change the fact that in many cases it does.
 
Katamarino said:
I saw a whole bunch of posts on FB from CFIs in FL and elsewhere
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Well if you equate a bunch of posts on social media as a legitment method resulting in moved aircraft, then you would be considered cherry-picking the facts as well. Its more the exception than the norm for a number of reasons. And that comes from a few years of actually moving aircraft out of harms way on both a commercial and private level.
 
Katamarino said:
Many of them - yes, exactly that. I saw a whole bunch of posts on FB from CFIs in FL and elsewhere offering to relocate aircraft free of charge for both of the recent major hurricanes.

Just because you can cherry pick examples where it doesn't work, doesn't change the fact that in many cases it does.
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You probably get your news from Facebook too.

You didn't address where to move the plane to. FYI, over half the aircraft destroyed in Blountstown, Florida from Michael were relocated here to avoid the storm. I guess you hadn't heard that hurricanes tend to be somewhat unpredictable.
 
donjohnston said:
You didn't address where to move the plane to. FYI, over half the aircraft destroyed in Blountstown, Florida from Michael were relocated here to avoid the storm. I guess you hadn't heard that hurricanes tend to be somewhat unpredictable.
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Yep. You’d probably have to move a plane from FL all the way to NC to be safe.

Oh wait.....
 
UngaWunga said:
Oh well, nothing can be done.
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Certainly things can be done. People can choose to live away from the coast and keep their planes in safer locations. Airports can build more and stronger hangars and reinforce existing ones.

This is the Venice airport. If you’re going to keep your airplane this close to the Gulf of Mexico, you’re going to get smacked once in a while and relocating your plane is simply not a reliable risk mitigation.

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kyleb said:
Let's be honest. The insurance companies should be including hurricane risk in their premiums for airplanes in at-risk locations. Same with houses. There's no reason "the public" needs to subsidize beachfront homeowners.
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Yeah. Like Nashville Tennessee. Big hurricane target. They should pay.

I think it’s funny that you think insurance companies aren’t charging more for at risk locations.
 
kyleb said:
Let's be honest. The insurance companies should be including hurricane risk in their premiums for airplanes in at-risk locations. Same with houses. There's no reason "the public" needs to subsidize beachfront homeowners.
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Not sure where you live or read but prices DO vary by location.
 
The main mission for insurance companies is to make money to build new tall buildings. They will make up the loss.
 
You do indicate your home airport and whether your airplane is hangared or not on your insurance application, there is a calculation.

I just paid my renewal for next year, my rates went down about $100 or so.

And if I have my airplane in a hangar, I would think that’s good enough? At least when I was nearby a tornado, my airplane was moved into the hangar and I felt safe hearing that. Not much more you can do.
 
I think the discussion is meant to stir up the cost-shifting/moral hazard angle. bUh pYleT sOlidAriTy....lol.

To be clear, both statements can and are in fact true at the same time (costs vary by location, people in low risk pools subsidize people in high payout pools).

Fwiw, that dynamic is not unique to the winged lawnmower insurance market. Coastal housing is a bigger offender on the moral hazard front imo.
 
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The good news is cat rates dropped during renewals earlier this year. We’ll have to wait until mid-2025 to see what the rate on line impact is to property for homeowners pass through, so that increase likely won’t be felt for 18-24 months. Rate on line is the cost of payouts vs premiums collected and is about 1/3d of the cat reinsurance cost. It’s been a few years since I was close to that space, but the cat charge is a fairly small portion of overall end customer premium.

The GA space is significant to us, but a blip in the larger aviation reinsurance space. That stuff usually pools into $50M excess costs/cat buckets before it’s triggered for payout so depending on a lot of factors, aviation rates in the GA space are really a giant ? on how they’ll be impacted.
 
In reality property loss is less of a factor than liability losses in aviation…companies are happy to use it as an excuse but they expect and have already charged us appropriately. Nothing is really unexpected in the insurance industry…
 
GLMS_NC said:
Not sure where you live or read but prices DO vary by location.
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They do. Until the commercial providers drop out and you're on the government underwritten policy (e.g. FEMA's flood insurance program), in which case I'm subsidizing folks living in luxurious beachfront property. PS, I'd like to live on the beach too, but don't think the general public should underwrite the risk...
 
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I have a feeling a large number of those aircraft are unairworthy anyway and so collecting the insurance payment was far more lucrative than trying to sell it outright or move it to safety elsewhere.
 
You really think with the cost of insurance these days people are paying for it on unairworthy aircraft in the hopes of a payout? I don’t think so.
 
SoonerAviator said:
I have a feeling a large number of those aircraft are unairworthy anyway and so collecting the insurance payment was far more lucrative than trying to sell it outright or move it to safety elsewhere.
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:yeahthat:

When an owner is facing a $30,000+ engine overhaul and therefore can't sell the plane for anywhere near what the insurance payout would be, there's a strong motivation to let the storm and the insurance company resolve his financial dilemma.
 
Salty said:
You really think with the cost of insurance these days people are paying for it in the hopes of a payout? I don’t think so.
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No, but when a storm is coming, they might be inclined to leave the thing out on the ramp.....
 
I’m seeing the opposite. Many more people going without insurance on airworthy aircraft.
 
Salty said:
I’m seeing the opposite. Many more people going without insurance on airworthy aircraft.
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Oh, I'm sure that's true. Especially pilots over age 70 who are getting raped on insurance prices. Scary, as I'm rapidly closing in on that age...
 
Salty said:
You really think with the cost of insurance these days people are paying for it on unairworthy aircraft in the hopes of a payout? I don’t think so.
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Half Fast said:
No, but when a storm is coming, they might be inclined to leave the thing out on the ramp.....
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Wait. So if they're not insured, what does leaving an uninsured aircraft out on the ramp accomplish?
 
TCABM said:
The good news is cat rates dropped during renewals earlier this year. We’ll have to wait until mid-2025 to see what the rate on line impact is to property for homeowners pass through, so that increase likely won’t be felt for 18-24 months. Rate on line is the cost of payouts vs premiums collected and is about 1/3d of the cat reinsurance cost. It’s been a few years since I was close to that space, but the cat charge is a fairly small portion of overall end customer premium.

The GA space is significant to us, but a blip in the larger aviation reinsurance space. That stuff usually pools into $50M excess costs/cat buckets before it’s triggered for payout so depending on a lot of factors, aviation rates in the GA space are really a giant ? on how they’ll be impacted.
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Any chance for a translation?

Tim
 
donjohnston said:
Wait. So if they're not insured, what does leaving an uninsured aircraft out on the ramp accomplish?
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Two different groups, those with and without coverage. I'm saying an insured owner with a massive cost to get his plane back in the air might be inclined to let a storm settle the matter for him. OTOH, I suspect many seniors aren't buying insurance at all. Obviously a storm won't help that group.
 
tspear said:
Any chance for a translation?

Tim
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Sure. Catastrophe events like a hurricane are events that your primary insurer purchases reinsurance from, so your insurer has insurance to pay the claims. Cat reinsurance contracts are annual contracts and most are renegotiated in the first and second quarter of the year and go into effect in June or July.

The cost of that reinsurance policy is baked into your homeowners premium. Cat policies usually cover multiple types of cat events, so a bad hurricane season can be offset if there’s lower than expected wildfire losses. Part of determining a cat reinsurance policy is the reinsurer looking at the rate of the primary insurer claims payouts vs premiums collected for an entire book line…in this case, homeowners. If the first line insurer is charging appropriate premiums and has fewer claims than expected, the rate on line is lower and that’s one of three big factors that impact the cat reinsurance premium being paid by the first line insurer to the reinsurer.

Since there’s no such thing as a free lunch, that cat premium is passed on by the primary insurer to the insured. The last couple of years have seen cat reinsurance payouts lower than expected, so that part of the reinsurance cost went down in 2024. Next year, the reinsurers will look back to establish rates going forward.

Aviation insurers also have catastrophe reinsurance, but totaling 100 single engine props at $150K each for example is only a $15M payout. Compare that to the price of a single G-IV.
 
@TCABM

Ok, that makes sense. And when you look at the pictures of the GA planes, I have not seen many jets or turboprops if any. It is really pretty much all piston aircraft.
Although I know of a rather expensive later model SR22 that might be in trouble (owner cannot get to it yet, hangar partially collapsed, plane was AOG due to MX issues). Even then, you are moving the needle only $1M or so if new.

Thanks,

Tim
 
Seems like the damage was far less than expected. Helen may have done more damage, and in places you wouldn't think about being at risk from hurricanes.
 
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