So what's the deal with insurance?

idahoflier

idahoflier

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idahoflier
No this isn't a rant about the cost going up, although I do have a recent head scratcher with a quote I received...

I started flying in 1992 and back then the club I belonged to had a $1MM non-subrogating policy. At the time, being 24, that more than covered me multiple times over, but I do remember $1MM seemed to be the magic number for aviation liability. Here we are in 2024 and it would seem most carriers will still only offer $1MM in liability even though if you adjust for inflation (if you believe the government numbers) it should be a little north of $2.25MM. Seems like a great business model, charge more and provide less...
 
I would argue that it’s not that simple…The liability policy also includes legal defense in addition to the Million award coverage. In my experience those costs have more than kept up with inflation. I do agree current max limits are inadequate for most policy’s.
 
Warlock said:
I would argue that it’s not that simple…The liability policy also includes legal defense in addition to the Million award coverage. In my experience those costs have more than kept up with inflation. I do agree current max limits are inadequate for most policy’s.
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Ah, very true, I had not considered that aspect. Thanks!
 
Sure, if you were the only insured sitting in court, $1000,000 isn’t enough. The way it works is everybody and anybody who can be included in a law suit is and there are lots of other insured sitting there with you.

Run out of gas and crash into a school bus of kids, that sump drain you put on the plane 13 years ago was probably responsible.
 
Clip4 said:
Sure, if you were the only insured sitting in court, $1000,000 isn’t enough. The way it works is everybody and anybody who can be included in a law suit is and there are lots of other insured sitting there with you.

Run out of gas and crash into a school bus of kids, that sump drain you put on the plane 13 years ago was probably responsible.
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I have been that guy…
 
It is possible to get more. My broker quoted 2mm for me a couple years ago. 1mm was $4400, 2mm was $7900. Only one company was willing to quote it. I decided to roll the dice with the "standard" limits.
 
Yet clearly reckless operation of a two ton vehicle while texting (and maybe intoxicated) doesn't attract this level of ambulance chasers (except in Florida). Another thing that AOPA should be fixing (yeah, right).
 
In my case I owned an aircraft in leaseback, operated by an LLC, but the only one with assets. Pilot flew into a 2000ft transmission tower dropping it killing himself and five year old daughter. Four lawsuits from different parties all separate…all when through local and then Federal Courts. Legal bills would have been bankrupting without insurance.
 
AV8R_87 said:
Yet clearly reckless operation of a two ton vehicle while texting (and maybe intoxicated) doesn't attract this level of ambulance chasers (except in Florida). Another thing that AOPA should be fixing (yeah, right).
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The ambulance chasers run after ambulances that leave a trail of dollar bills. Airplane owners are more likely to have assets attractive to a lawyer than drunken idiots driving two-ton vehicles.
 
Warlock said:
In my case I owned an aircraft in leaseback, operated by an LLC, but the only one with assets. Pilot flew into a 2000ft transmission tower dropping it killing himself and five year old daughter. Four lawsuits from different parties all separate…all when through local and then Federal Courts. Legal bills would have been bankrupting without insurance.
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Ive read the posts you have made about that incident. your case shows everything thats wrong with our legal system. a quick read of the facts showed who was to blame for that crash, but he was dead, had nothing to get, so the lawyers went after the money trail.
 
Reading the thread prompted me to review my auto coverage last night, and quickly realize the Fed's currency debasement has yet again externalized costs for those of us not judgement-proof.

Given the prevalence of overpriced cars on the streets these days, I chose to double my property damage liability coverage (came with even higher increases in bodily injury liability coverage, which also make sense given the insanity of collusive and usurious healthcare pricing in this country). Any rate, was relieved to see an inconsequential premium increase, though still a high absolute carrying cost for the auto policies, when compared to home and airplane (when I had one anyways). The previous 50k property limit would easily be exceeded these days in a multi-vehicle collision, with MSRPs of a single vehicle being well above the policy limit. My wife was involved in one such multi-vehicle claim last year; thankfully she was deemed not at fault, but a couple seconds earlier the roles could easily have been reversed. We got lucky, I don't like that plan for my retirement savings. So, opted for 100/300/100, which more adequately reflects the pathetic state on affairs of our country's purchasing power domestically.

On the aviation side, I always felt 1MM with sublimits covered me well for my use case. I wasn't sweating the things I would hit on the ground when the engine started trying to shake itself apart at 10k last year, the way I do when I'm driving these days.

Lastly, though I sympathize with the leaseholder anecdote, I don't find it representative of the insurance use case most of us recreationalists pursue. It certainly motivates me not to engage in renting any of my stuff, car or airplane, but is otherwise a non-sequitur in the discussion of owner-operated costs and insurance et al.
 
AV8R_87 said:
Yet clearly reckless operation of a two ton vehicle while texting (and maybe intoxicated) doesn't attract this level of ambulance chasers (except in Florida). Another thing that AOPA should be fixing (yeah, right).
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So how does AOPA “fix” what an insurance company charges?

Does AOPA go in and fire the insurance company actuaries and put their own there?
 
No, AOPA (through the money we pay them) should have a top tier legal team that could counteract all those frivolous lawsuits on behalf of the paying members. Ambulance chasers would quickly back off if they knew they had a decent chance of losing a good deal of money every time they tried to bring one of those stupid lawsuits to court. If the insurance doesn't have to pay a million on a bogus claim the premium won't have to increase. Plus, an entity the size of AOPA could handle insurance in-house, instead of outsourcing it. That could also keep insurance premiums in check, if anyone there would bother attempting it.
 
Warlock said:
In my case I owned an aircraft in leaseback, operated by an LLC, but the only one with assets. Pilot flew into a 2000ft transmission tower dropping it killing himself and five year old daughter. Four lawsuits from different parties all separate…all when through local and then Federal Courts. Legal bills would have been bankrupting without insurance.
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Sorry you had to go through that…
 
AV8R_87 said:
No, AOPA (through the money we pay them) should have a top tier legal team that could counteract all those frivolous lawsuits on behalf of the paying members. Ambulance chasers would quickly back off if they knew they had a decent chance of losing a good deal of money every time they tried to bring one of those stupid lawsuits to court. If the insurance doesn't have to pay a million on a bogus claim the premium won't have to increase. Plus, an entity the size of AOPA could handle insurance in-house, instead of outsourcing it. That could also keep insurance premiums in check, if anyone there would bother attempting it.
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iu
 
:rolleyes:
Please use your own words next time, makes your contribution more valuable.

Before you do that, look at the level of legal protection you get with an NRA membership to see where I'm coming from.
 
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AV8R_87 said:
:rolleyes:
Please use your own words next time, makes your contribution more valuable.
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So far I've seen nothing in value from your contributions. ;)

AV8R_87 said:
Before you do that, look at the level of legal protection you get with an NRA membership to see where I'm coming from.
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Look at the millions of members of the NRA compared to the less than half million of AOPA. For AOPA to match that you wouldn't want to pay the price of admission.
 
Doc Holliday said:
Look at the millions of members of the NRA compared to the less than half million of AOPA. For AOPA to match that you wouldn't want to pay the price of admission.
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The case load is also smaller. You don't need the same size legal team as the NRA would need. I'm sure there are a lot more civil lawsuits they deal with every year than all the cases AOPA would ever have to tackle.
AOPA already has a sizeable legal tem on retainer. I doubt they have a 100% utilization rate.
Let's say they do and they need to add 8 people dedicated to that (plus a couple admins). A very approximate guess would be that it might add 2 million to their expenses. The extra $4/yr that members would have to pay would probably be insignificant, especially if that reduces their insurance premiums by some amount. And it might be less.
All it takes is to show the determination to fight them in court. A lot of those claims would be dropped in that scenario.
 
AV8R_87 said:
The case load is also smaller. You don't need the same size legal team as the NRA would need. I'm sure there are a lot more civil lawsuits they deal with every year than all the cases AOPA would ever have to tackle.
AOPA already has a sizeable legal tem on retainer. I doubt they have a 100% utilization rate.
Let's say they do and they need to add 8 people dedicated to that (plus a couple admins). A very approximate guess would be that it might add 2 million to their expenses. The extra $4/yr that members would have to pay would probably be insignificant, especially if that reduces their insurance premiums by some amount. And it might be less.
All it takes is to show the determination to fight them in court. A lot of those claims would be dropped in that scenario.
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You should send your plan to AOPA. I’m sure they’ll get right on it, now that you figured it out. :rolleyes:
 
I went to buy a better plane. No retracts no high performance.
Avemco cancelled my policy. I was later told it was because of my age.
I've discovered they insurance companies are doing it to a lot of people.
I called AOPA to talk to them about the insurance issue. After all they are there to advocate for us, right?
Lot's of apologies, shucking and jiving, but "Sorry. We are aware of the situation. There is nothing we can (will) do about it."

So I'm flying a borrowed plane with no insurance.
Everything I own is in legal trusts, etc, etc.
If I hit your house, so sorry.
 
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