Insurance coverages and deductibles

Jim K

Jim K

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I'm going to have an agent gather quotes for me this year now that I have a some hours in my plane. I'm currently an AVEMCO customer, and their standard policy has $0 deductibles and $1MM per incident/$100K per person liability limits.

The application I'm filling in for the agent asks what deductibles and limits I want. I'd certainly take higher deductibles to save some premium (I carry $1K on my cars), and I'd like to have a higher liability limit if it's available within reason . Seems like everyone has 1MM/100K liability, but I have no idea on deductibles.
 
Mine is $0 on 80K hull. I’ve never asked about raising the deductible. I probably should, since it would take a pretty big expense for me not to just pay out of pocket.
 
I think they write the $0 deductible policies because they know pilots are generally smart enough to not file a claim for a small amount. What the 0 deductible policies do is encourage you to be smart in a real emergency and not worry about damage to the plane vs. damage to human, which might creep into decision making if they started writing policies with high deductibles.

As for coverage, some underwriters will write $1M smooth policies, though there is an argument to be made that smooth policies might not be the best option if there are multiple claims from the same event. If you have enough hours, and probably an IR too, you can get policies written for $250K sublimits instead of $100K, which is a significant improvement in coverage without a huge difference in price.
 
Unlike Auto, Home, high deductibles actuarial don’t deter aviation claims but do reduce premium dollars. It’s that simple. believe me I have had the discussion and worked in Insurance and carry 2-3% deductibles or greater on everything.
 
Jim K said:
$1MM per incident/$100K per person liability limits.

… Seems like everyone has 1MM/100K liability, ….
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You can get $1M per incident / $1M per person i.e., 1M smooth, after you stick with an insurance company for a few years. After a few more years I got $2 M smooth.

$1M per person is a good idea if you carry passengers not named in your will, because $100k isn’t much to protect your estate, if such a passenger is killed.
 
Don't even have to be killed.

A several month stay in a burn center can generate bills over $1 million. And that was 20 years ago.
 
Had a nice chat with the broker this morning. She said that deductibles are pretty standardized based on the aircraft type. She said that the few times they've gotten quoted higher deductibles, it was not worth it. Her example was $5K deductibles reducing the annual policy cost by $100.

I also asked about increased liability limits. She said she thought she could get 2MM/250K quotes out of a couple of the companies, and would likely be able to get 1MM smooth out of most. She said this mostly hinges on pilot TT and TIT. I also sent the renewal quote package in to AVEMCO, so I should know in a couple days.
 
You'll want to be careful with per person /per passenger sublimits. Per person means just that. If you hit somebody on the ground, $100k isn't going far in paying for that person's damages. Smooth limits are the way to go if you can get them.
 
Chip Sylverne said:
You'll want to be careful with per person /per passenger sublimits. Per person means just that. If you hit somebody on the ground, $100k isn't going far in paying for that person's damages. Smooth limits are the way to go if you can get them.
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Important point to know - the sublimits are typically per passenger, but I have heard of per-person sublimits. You don't want a per-person sublimit for non-passengers. I figure someone who willingly gets in my plane (and who I let in my plane) is more likely to settle for $250k policy limits than a random person in the wrong place at the wrong time.

Keep in mind though, that once your policy pays out to the limits, you no longer have the insurance company paying your legal bills, which is a huge part of the value of the policy.

No perfect calls on this unless you can shell out for, and get someone to write, a really high limit policy.
 
Jeff Oslick said:
Important point to know - the sublimits are typically per passenger, but I have heard of per-person sublimits. You don't want a per-person sublimit for non-passengers. I figure someone who willingly gets in my plane (and who I let in my plane) is more likely to settle for $250k policy limits than a random person in the wrong place at the wrong time.

Keep in mind though, that once your policy pays out to the limits, you no longer have the insurance company paying your legal bills, which is a huge part of the value of the policy.

No perfect calls on this unless you can shell out for, and get someone to write, a really high limit policy.
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Avemco writes theirs as "per person", which is one of the reasons I'm shopping this. They were good to have for the first couple years as they required less training than other companies and they allow you to update your hours quarterly and will adjust your premium accordingly.

That said I'd recently heard some negative stories about claims with them, and in my experience with other insurances, having a good agent on your side can be quite helpful. I can't help but wonder if another company might've helped cover the engine teardown after my forced landing if I'd had an agent going to bat for me.
 
Jim K said:
Avemco writes theirs as "per person", which is one of the reasons I'm shopping this. They were good to have for the first couple years as they required less training than other companies and they allow you to update your hours quarterly and will adjust your premium accordingly.

That said I'd recently heard some negative stories about claims with them, and in my experience with other insurances, having a good agent on your side can be quite helpful. I can't help but wonder if another company might've helped cover the engine teardown after my forced landing if I'd had an agent going to bat for me.
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The truth is the aviation claims industry is a little "incestuous" so to speak, in that any given adjuster can be working on claims for a number of different companies. Once there is a claim, the agent is completely out of the picture. The equivalent of a Chinese wall exists between sales and claims, and for good reason. A good agent will be of no help after a claim. AVEMCO's claims handling is as good as any, and probably better than some.
 
I have a 0 deductible now but when I was shopping around they were different depending upon the company. I asked if I could increase it and was told they only offered the one deductible. And there was no difference in premium whether the bird was outside tied down or in a hangar, which I thought was weird.

I got a new quote from the same company for a twin and suddenly the deductible is $10k.
 
Canada here but probably not much different. I have $0 deductible on something like $45k hull (probably underinsured by $15k so I'll update that upon renewal this winter). Liability is $2M smooth.
 
For 225k hull, 1MM/100k liability limits:
Avemco $5934
AIG $4014

I'll probably back that down to 200k as I think the top is in and the pa32 market may even be cooling off a bit.

AIG also quoted 1mm/250k at $4395 and 1mm csl at 5029.
USAIG was willing to quote 2mm csl at a bit over $8000

Only downside to AIG is they have a more strict open pilot clause requiring 750tt.

I asked an avemco underwriter if they'd quote higher liability limits, and he said they don't offer anything more than 1mm/100k. He made a big deal about having unlimited legal coverage to make sure a plaintiff settles for policy limits as opposed to paying out to their limit and leaving you on your own. I can't tell if this is a valid selling point or just spin.
 
Happen to come from an insurance family and participated and then sold the company recently…never heard the term smooth used and industry wide combined single limit was the term…except for aviation insurance…just wondering…
 
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