Insurance increase? Anybody else?

k9medic

k9medic

Line Up and Wait
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Sep 27, 2018
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N Central FL and GTC Bahamas when off work
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ATP-H, CMEL, CSEL, CFI/CFII Airplanes and Helicopters
Just got my new quote for the 6/260. Previous policy was $914. Upcoming policy is $1143.

No changes in coverage so why the $230 increase?
 
A much debated topic. AOPA, In the Hangar, and other aviation “shows” have done episodes on the rise of insurance and in some cases, really tremendous increases. The conventional wisdom is there are a couple of factors at play: (1) a significant amount of claims from natural events such as tornados and man-made events such as the 737 Max debacle resulting in extraordinary payouts; (2) a number of insurers leaving the market because of losses associated with the aforementioned claims; (3) reduced competition because of factor #2; (4) investment income has declined for insurers, re-insurers and the whole chain involved in the insurance industry; (5) rates have been flat for some time and it’s just a function of the economic cycle; and (6) because they can. AOPA (FWIW) predicts rates will continue to go up for the next 3-4 years before they stabilize, although who really knows. And yet, some folks haven’t experienced a rate increase in 2020. Go figure. Mine went up about 10% in February and I am expecting 10-15% this February when I renew. At some point I may reduce the hull value or maybe just sell the plane and move on to something else.
 
Sounds like a pretty good deal compared to a lot of other reports I've heard.
 
My knowledge as a claims guy(we don't know all the nuts and bolts from the underwriting side)-
The last 15 years wer unprecedented. Many other players got into aviation insurance when drove rates through the basement. Underwriters from other sectors of insurance saw pure premium numbers and essentially stopped underwriting properly and took everything that came through the door. Well, claims finally caught up with them. And not really the airline sector because they plan for major losses. Major weather events are also factored into rating beforehand because they are predictable.

It's GA, the 4-9 fatals, $1 mil plus hulls on owner flown Tprops and jets. Helicopter crashes with 5 fatals, commercial ops which means huge liability settlements. A G650 winglet replacement is $170k. Some of these policy premiums were like 20k for a G650! A bird s$&ts on a G650 and you have a 6 figure claim. Totally unsustainable. 2k premium on a Carbon Cub, which ground loops and is destroyed. $300k loss. The companies that got in 15 years ago are now getting crushed with claims and losing their @$$es. They're bailing out of aviation (pun intended) or jacking up the rates to a sustainable level. Of course from the consumer perspective it looks like some insurance industry game, but it's really just adjusting to the market.
 
Where I feel the industry fails in comparison to the auto industry is that our premiums are primarily based on Hull value instead of risk factor. Given current trends a 300k carbon cub is more likely to get destroyed than a 300k retract yet their insurance cost will be nearly identical.
 
I hear what you’re saying @Grum.Man but I think the industry surpasses the auto because it is based on Hull value and not their BS replacement cost. If I ensure for 200 and it gets totaled, I get 200. If I have an auto vehicle insured that I bought yesterday for 100, they MAY pay 70, 65, 60...who knows.
 
Radar Contact said:
I hear what you’re saying @Grum.Man but I think the industry surpasses the auto because it is based on Hull value and not their BS replacement cost. If I ensure for 200 and it gets totaled, I get 200. If I have an auto vehicle insured that I bought yesterday for 100, they MAY pay 70, 65, 60...who knows.
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That is certainly one upside. The auto industry is smart enough to know a Mustang leaving a car meet is much more likely to crash than a Honda Civic. Aviation hasn’t caught on that a bush plane is more likely to crash than a plane designed for going paved runway to paved runway.

Reality is that given the risk we have been pretty spoiled on insurance premiums and even with the increases they aren’t too far out of
Line with auto cost.
 
Just got a quote for the 172. I go through a broker. The company we were with quoted a 16% increase stating industry wide changes in market conditions. The second quote we got from a different company was 54 dollars more than we paid last year a little over 6% increase.
 
Yeah, I'm not sure what all the complaining is about. I'd have to save my premium for 43 years before I'd have enough to pay my hull damage alone, not counting liability I might incur. :confused:
 
17% increase, about $90. Considering my premiums have decreased each of the 5 previous years while increasing insured hull value during that time, this is not a big deal.
 
How many Hours/hull value are you insuring.

I saw a new cirrus over 15k for Insurance for a. 150hr Pilot.
 
Roadracin said:
How many Hours/hull value are you insuring.

I saw a new cirrus over 15k for Insurance for a. 150hr Pilot.
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Again, it would take 50+ years to save $800,000 at $15,000 a year. I’m really surprised it’s that low.

or, look at it another way, if they insure 50 new cirrus, only one of them has to be totaled that year and they make nothing, and that’s if there’s no liability payment.
 
I had a hard time getting anyone to insure me on a retract with 0 retract time. Only one underwriter would take me so I had to pay what they were asking. Hopefully with all the time I am getting now I can get more than one quote at renewal.
 
Mine went up 15%


Sent from my iPhone using Tapatalk
 
Roadracin said:
How many Hours/hull value are you insuring.

I saw a new cirrus over 15k for Insurance for a. 150hr Pilot.
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comparison: in 2007 I was at 150hrs and had a $5k quote for new cirrus.
 
The insurance on both my planes increased SIGNIFICANTLY this year. I am giving thought to just dropping it all together and start putting the money in a fund.
 
Maybe this trend will have some chilling effect on resale prices as of late. Silver lining afaic.
 
MBDiagMan said:
The insurance on both my planes increased SIGNIFICANTLY this year. I am giving thought to just dropping it all together and start putting the money in a fund.
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I don’t understand this. To fund replacing the aircraft would be much, much more money and you still have liability to think about.
 
The 182 went up about 10%, the 425 went up about 35%. I had a $40K claim on the Conquest last year, the lower door broke, so I’m thinking that was part of the increase.
 
N747JB said:
The 182 went up about 10%, the 425 went up about 35%. I had a $40K claim on the Conquest last year, the lower door broke, so I’m thinking that was part of the increase.
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I don’t understand, isn’t a broken door a maintenance issue? Unless you hit something.
 
MooneyDriver78 said:
I don’t understand, isn’t a broken door a maintenance issue? Unless you hit something.
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The cables holding the lower portion of the door snapped out of the sidewalls when one of them got snagged. It was considered damage not in motion. I compared it to a vehicle door getting bent while the car was sitting still. To be honest, I was halfway surprised that they covered it!
 
I just set in my renewal application. Waiting with apprehension.
 
I think a large part of the issue is that fixed income investment is down. The insurance companies make their money on those investments and with the FEd keeping rates lower for the foreseeable future, I don’t see any relief coming.
 
Rcmutz said:
I think a large part of the issue is that fixed income investment is down. The insurance companies make their money on those investments and with the FEd keeping rates lower for the foreseeable future, I don’t see any relief coming.
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Seems unlikely unless they’re barred from investments in unnaturally inflated tech stocks and Amazon, which is working out well right at the moment for everybody else.

I suppose — not knowing — they’re forced to invest in the stuff that isn’t even beating inflation? Honest question.

Bunch of people have made a lot of money (on paper anyway) in the last few months. Those smart enough to get into AMD when I thought about doing it, caught a rare double off of Intel’s news.

And then Intel had figured out how to sell enough off-catalog chips to Amazon to make themselves even look good.

How do we know? The surplus originally $10K a processor chips minus the motherboards and chassis, with oddball part numbers printed on them, are currently flooding the used market at $750 a chip. Amazon and maybe Azure swapped theirs. Same motherboard, same chassis.

Intel got super lucky their chip design and socket design stalled with massive hyper scale data center deployments having used the early chips in compatible server class machines. Turn em off, pop out an 18 core Xeon Platinum, pop in a 28.

Intel won’t get a second chance at that.

But anyway. Point being... Plenty of great investments available in the legalized casino right now. Why wouldn’t they utilize them?
 
To much risk for insurance companies. Plus I’m not sure the SEC allows them to invest in legalized gambling.
 
Same as last year. $1,314.
 
10% Increase for my Comanche. I am considering a not in motion policy for 1000, vs in flight for 1850
 
Mine went up 5%, but I had doubled my time in make/model (45 to 94). I asked my agent if it's a sliding scale or there's a breakpoint at 100 hours, if the latter I'll ask for a requote next week.
 
I can't speak historically...never had aircraft insurance before. 350 hours TT, zero time-in-type, I was quoted $1520/year for the plane I'm buying (RV-9a), no OPW . I named three different instructors on the policy with no difference in premium. Other policies included OPW, but all had a significantly higher premium (like...twice as much...) so I took the path of least resistance.
 
Sometimes you can get caught in no man's land and unless your broker/agent is diligent and really looking out for you then it could cost you more. Case in point, there are several underwriters I deal with that once your hull value reaches a certain point it can actually be cheaper to have the higher hull value. One of the companies has the break at 50k so it's cheaper to insure for 50k than it is at 45k. Another has a large break on 1mm smooth policies with a break at 75k hull value. That one can be almost half of what a 70k hull policy is.
 
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