Insurance Rates - What's the Deal?

Stingray Don

Stingray Don

En-Route
Joined
Dec 21, 2014
Messages
2,964
Location
Indianapolis, Indiana
Display Name
Display name:
Stingray Don
My insurance for the past few years had been running about $1,200 per year. Last year it went up to $1,286 - not a big jump. I just renewed my coverage and it went up to $1,655 for the same plane and same coverage. That's a 29% increase! I use AOPA, so they are supposed to shop around for the best rate. What's going on with insurance rates?
 
Stingray Don said:
My insurance for the past few years had been running about $1,200 per year. Last year it went up to $1,286 - not a big jump. I just renewed my coverage and it went up to $1,655 for the same plane and same coverage. That's a 29% increase! I use AOPA, so they are supposed to shop around for the best rate. What's going on with insurance rates?
Click to expand...

Consider yourself lucky. Four person partnership, last year was $1600 (up from $1200 the year before), the best we could find this year was $3200!!!!!
 
Insurance companies don’t just take your premium, drop it into a bank account then wait till a claim comes in, then pay it.

It gets a bit more complicated. A part of the equation is the stock market. Variations in the markets will affect insurance rates. And this year we’ve seen wild fluctuations.

Someone inside the insurance industry may come along and give better explanations, but from previous experience I see the increases as expected.

And it’s not just in aviation.
 
My new Luscombe quote was very close to $2000... ugh
 
Last edited:
I think fixed gear airplanes have been relatively flat premium cost-wise compared to retracts.
 
Aviation has been hit hard, this is across the board. 10-100% increases from what my (soon to be former) broker has told me, and confirmed with other brokers.
 
Ted DuPuis said:
Aviation has been hit hard, this is across the board. 10-100% increases from what my (soon to be former) broker has told me, and confirmed with other brokers.
Click to expand...

What's the driver? I don't recall an excessive number of crashes reported this year. Fallout from Covid? Fallout from Kobe Bryant?

???
 
Bill Jennings said:
What's the driver? I don't recall an excessive number of crashes reported this year. Fallout from Covid? Fallout from Kobe Bryant?

???
Click to expand...

Part of what I've heard is that there has been a trend recently towards increasingly and increasingly higher liability coverage. 10 years ago most people just did $1M/$100k from what I saw, and now seeing people ask for $5-10M smooth coverage is common. In those cases, a single crash has an enormous impact on a company. We've had some of those crashes the past few years, mostly with single pilot turboprops, and big payouts from those. Since insurance is essentially the community all paying in to those payouts, that means we all suffer even when it wasn't our aircraft type that had the issue, but if we're generally part of something considered a higher risk type or setup then we'll be more susceptible to increases.
 
My broker said Boeing was the big one, but they've essentially said we've been riding for free for the last 8 years on the premium front. Yes, seasonal losses and what not, but the Max fiasco was the big blip. It was also added this is not going to deflate next year. They expect continued increases. And I'm talking pre-70 folks, post-70 have always been largely kicked in the teeth Boeing Max or no Boeing Max. This may increase just high enough to be a lethal blow to many of them in that demographic.

My policy jumped 50% on an Arrow (bigger percentage due to low hull value). I dropped territorial coverage, in order to eat merely a 25% increase. Also has frozen any incentive I previously had to increase my capex footprint in the hobby. I don't know why people cheerlead increases in sale prices of these things as it this is a good thing. It's a myopic view of one's footprint. It reduces market size by proxy since qualified buyers dwindle the higher up you go, increases ownership costs you can't recoup (insurance premiums) for no added consumption value, and makes low-hull participants total out easier in the event of claims (my current policy totals me out at 70% of hull, which used to be 80% on my previous policy). It's gentrification by another name.
 
My insurance on a T Arrow went from $1650 to $3200. No accidents, incidents claims or violations, flying for 35 years, Pvt. Inst.
May have to drop hull coverage next year.
 
Luigi said:
My insurance on a T Arrow went from $1650 to $3200. No accidents, incidents claims or violations, flying for 35 years, Pvt. Inst.
May have to drop hull coverage next year.
Click to expand...
Holy shiz. As a fellow arrow owner, no way I incur 3k to insure a pa28 airframe of any vintage. I can only imagine what light twin rates look like for low time in make model applicants (it was already ridiculous when I last looked at them for myself 3 years ago).
 
Doc Holliday said:
Insurance companies don’t just take your premium, drop it into a bank account then wait till a claim comes in, then pay it.

It gets a bit more complicated. A part of the equation is the stock market. Variations in the markets will affect insurance rates. And this year we’ve seen wild fluctuations.

Someone inside the insurance industry may come along and give better explanations, but from previous experience I see the increases as expected.

And it’s not just in aviation.
Click to expand...
Real estate is in the mix, too. Think of those skyscrapers with names of insurance companies on the tops of them ...
 
I was told by a good friend who owned an aviation insurance business that there is really only one main underwriter now, so there is no competition. My friend actually sold his business for that very reason about a year ago or so.
 
On my Light Sport Sky Arrow, hull insured for $50,000...

2016 $776
2017 $860
2018 $961
2019 $1,218
2020 $1,218

The only bright spot is that its leveled off, albeit at a substantially higher rate than 5 years ago.
 
This week, I had a :(GULP!:confused: moment with my renewal. The lowest quote that came in was a 72% increase over the current year ($1310 this year vs. $2247 for the coming year), and this was with the same company that I have been with since getting back into the air. The highest quote was over $4000! Seems that the companies do not want my business. 5 companies definitely did not want my business as they declined to quote. Avemco was the least expensive, although still a substantial increase.
Maybe I should drop the hull coverage and just keep the liability coverage
 
Wonder how many are going to decide the risk is worth going naked.
 
I hate to say it but is $1-4k/year to insure a $60-200k asset + 1M liability + bodily injury all that extreme? If I take my auto insurance premium and scale it to what the plane costs vs the car it seems like a reasonable number. I know they're completely different things, just saying... it's not THAT crazy.

I don't like to pay more either, so far I've not seen an increase though. I've seen a lot of people saying they did, my renewal in Jan went down quite a bit but I also went from 0 hours in type to 100 so that probably was the bigger factor.
 
TCABM said:
Wonder how many are going to decide the risk is worth going naked.
Click to expand...

Depends on your definition of going naked.

The biggest driver of the rate increases this year is hull values. I suspect that you’ll find more people reducing their hull values to keep liability coverage.
 
My insurance renewal in March was only $20 more per year. 62 yo, IFR rated, 1200 TT, fixed gear, over 400 in type, $55k hull, $1M/$100,000.

I think you need to look at each individual case. Retract versus fixed gear, tail dragged vs nose dragged, over 70 vs under 70, time in make, etc.
 
TCABM said:
Wonder how many are going to decide the risk is worth going naked.
Click to expand...

Considering the prevalence of financed types, my guess is much less than expected, by virtue of the fact their money overlords tell them they have to carry it.

For my part as a non-financed type, the most I'd be willing to go would be ground not-in-motion, based on my experiences with ramp/hangar rash. But one would have to do the math there, since it's not a linear discount. The only substantive discount was liability-only last time I went asking (that was wrt to an experimental though, not my current fac-built turkey). For the former, even ground not-in-motion got fairly close to inflight coverage so as to make it a drop in the bucket, thus just going full collision on it. Going the lower liability limit route is generally a non-starter as the policies offered these days are paltry as it is (100K per seat sub-limits et al).
 
Fearless Tower said:
Not trying to be a jerk, but where have you been for the last 8 or 9 months.

This was a huge topic at the beginning of the year. Insurance underwriters decides this was the year to try and recoup their heavy losses.
Click to expand...

I dunno. If this was a topic of discussion on the board, then I just missed it. Didn’t pay much attention until I got hit with the increase. :dunno:
 
My agent had told me my renewal would be in line with last year's rate, at the last minute they told me QBE would not renew and I had to go with Hallmark for double the previous year's price. I called Avemco, and they would have been 1K less, but by then it was too late as I didn't want a gap in coverage (don't know if it would have mattered). My broker is Falcon, seem like nice people, but Avemco here I come, maybe with self insured hull.


I even offered to fly with the gear extended at all times to keep the rates lower! :cool:
 
hindsight2020 said:
Holy shiz. As a fellow arrow owner, no way I incur 3k to insure a pa28 airframe of any vintage. I can only imagine what light twin rates look like for low time in make model applicants (it was already ridiculous when I last looked at them for myself 3 years ago).
Click to expand...

Yeah, you would think. But... I added my hangar neighbor to my Baron policy last year, he had 0 twin time and 580 or so TT with instrument. The upcharge was only like $300. ($1800 to $2100)

Now he has his multi and about 40 in my plane. They kept him on the policy for the exact same rate as last year. Arguably this is an increase (same terms for less risk) but it's not much of one.

There is no rational explanation for a T-arrow costing 50% more to insure than my baron with a low time ME pilot named. Unless those arrow pilots are old. Older pilots seem to have been given their walking papers in aviation this year. Someone should start up a co-op insurer to cover 60+ age pilots. They might corner the GA market.
 
Stingray Don said:
I dunno. If this was a topic of discussion on the board, then I just missed it. Didn’t pay much attention until I got hit with the increase. :dunno:
Click to expand...

It was briefly discussed here, but EVERY aviation organization/online magazine....etc from AOPA to NBAA was making a stink about it.

There was actually some tough guy here on POA claiming to be a longtime corporate jet pilot and DPE who told me I didn’t know what I was talking about a few months ago when I was explaining that premiums were rising and causing some real problems for the corporate jet world.

At any rate, it’s real, as you found out.
 
Fearless Tower said:
There was actually some tough guy here on POA claiming to be a longtime corporate jet pilot and DPE who told me I didn’t know what I was talking about a few months ago when I was explaining that premiums were rising and causing some real problems for the corporate jet world.

At any rate, it’s real, as you found out.
Click to expand...
I remember that.
 
It's not just one thing, such as tornadoes, causing this. Weather losses are probably a factor, but not likely the big driver of costs.
- There's fewer underwriters as some have got out of insuring aviation risk, and less competition;
- The insurance companies used to invest the float (the premiums they are holding), but with interest rates so low the low risk income they can make from investing the float is minuscule compared to years past, and that is in part being made up with higher premiums.

My insurance on the Aztec went up 22.5 % this year. Our flying club's fleet of 16 aircraft (172s, 2 x Senecas and a Citabria) went up 25% when we renewed in July. Everybody I know is getting hammered.
 
I was surprised that our club's insurance only went up about 10% this year. We have a warrior, archer, 2 Dakotas, and an arrow. About 1/4 of our membership is students and probably another 1/4 under a couple hundred hours. Im a little worried about next year, but we'll cross that bridge when we get there. We have what I think is good coverage, too....500 deductible and 1mm liability which covers the club and the member, who are all named owners. I guess spreading the risk over the large group must stabilize the rates? Beats me.
 
You must log in or register to reply here.
Back
Top