Warning: Insurance renewal and medical type

[Punkinhead]

I got a quote to renew my insurance that gave me a choice of two carriers. I could stay with my current insurer (AIG) or go with a new carrier. They were within $20 of each other and the coverage was similar. I've never had a claim so I haven't had any interactions that would lead me to pick one over the other. I asked the agent if their office knew of any reason why I'd pick one over the other and she said, "well, if you ever decide to go Basicmed the new carrier won't cover you". That's kind of a big deal! I've been using Basicmed since the program started and it's written on my renewal form where I updated my hours, ratings, biennial, etc. The Class 3 medical requirement wasn't mentioned anywhere in the quote. She said AIG would cover me if I went Basicmed or sport pilot. Be careful out there...

 

[schmookeeg]

Your broker sucks if she presented you that option, knowing you were already BasicMed.

I wonder, had you switched and later were denied a claim, if you could try to recover from her E&O policy?

 

[Lindberg]

Your broker sucks if she presented you that option, knowing you were already BasicMed.

I wonder, had you switched and later were denied a claim, if you could try to recover from her E&O policy?

You can always try.

 

[schmookeeg]

Heh... I wonder if, in this scenario, such a try would succeed?

 

[flyingron]

Depends who the "new carrier" is. Frankly, it sounds like scare nonsense (unless you are over 65 or something, see another thread on this subject). The ASF guy (McSpadden) did a lot of accumulation of basic med stories and there were very few cases where an insurance company or other entity wouldn't accept basic med the same as a third class.

 

[Punkinhead]

Depends who the "new carrier" is.

Old Republic Aerospace.

Frankly, it sounds like scare nonsense (unless you are over 65 or something,

I'm 56 so I don't think it's age related. Also, it's a simple VFR plane that qualifies for light sport so it's not like I was trying to insure a complex, high performance plane.

The ASF guy (McSpadden) did a lot of accumulation of basic med stories and there were very few cases where an insurance company or other entity wouldn't accept basic med the same as a third class.

All I have is the word of the agent. It wasn't in the quote so I haven't seen it in writing and wouldn't until I had the policy.

 

[Mongoose Aviator]

Old Republic Aerospace.

All I have is the word of the agent. It wasn't in the quote so I haven't seen it in writing and wouldn't until I had the policy.

OLD REPUBLIC INSURANCE COMPANY
My policy currently in effect:

Your policy will be effective while the aircraft is in flight only if all of the following four (4)
conditions are met:
1. The pilot flying the aircraft must maintain a valid pilot certificate (including the appropriate
ratings) and valid medical certificate as required by the Federal Aviation Administration or
its approved equivalent. [clip]

I currently obtain a Class 1 medical and let it run 2 years (over 40 years of age) so it effectively turns into a Class 3 (or however somebody wants to reword that) before renewing my medical certificate for a Class 1. I had considered also obtaining a BasicMed in case I had a lapse on my medical. Last time, I almost missed my Medical renewal date due to travel and scheduling issues. This thread cause me to check my policy. I guess I would have to check with my broker prior to flying with BasicMed. Assuming I wanted to be confident that I had the coverage that I thought I had.

I do wonder what an "approved equivalent" is to a medical certificate and what is the purpose of that wording being included? I assume everything in the policy is included for a very specific reason and there are no superfluous words or phrases.

 

[Punkinhead]

I've been using Basicmed since the program started and it's written on my renewal form where I updated my hours, ratings, biennial, etc.

I have to correct myself here. In the past I've always filled out the renewal form by hand and mailed it in. Before going Basicmed I always just filled in the date that I got my class 3 in the "Medical" field then after going Basicmed I always added "Basicmed" next to the date. This year my wife filled it out online for me and it just had a space for "date of medical". It didn't ask what type, only when. So I can't pin this on my agent, although it seems like a lack of clarity in the renewal form. They should ask what type of medical you're flying under.

 

[Punkinhead]

OLD REPUBLIC INSURANCE COMPANY
My policy currently in effect:

I currently obtain a Class 1 medical and let it run 2 years (over 40 years of age) so it effectively turns into a Class 3 (or however somebody wants to reword that) before renewing my medical certificate for a Class 1. I had considered also obtaining a BasicMed in case I had a lapse on my medical. Last time, I almost missed my Medical renewal date due to travel and scheduling issues. This thread cause me to check my policy. I guess I would have to check with my broker prior to flying with BasicMed. Assuming I wanted to be confident that I had the coverage that I thought I had.

I do wonder what an "approved equivalent" is to a medical certificate and what is the purpose of that wording being included? I assume everything in the policy is included for a very specific reason and there are no superfluous words or phrases.

My AIG policy from last year says "if required, a current and valid FAA Medical Certificate". I assume the "if required" allows for using a drivers license when flying a sport pilot qualified plane.

 

[schmookeeg]

I take back my earlier remarks about your broker, then, and applaud her proactivity

 

[Mongoose Aviator]

I assume the "if required" allows for using a drivers license when flying a sport pilot qualified plane.

That makes sense. And I see that I missed a similar phrase in my policy although I did include it in the quote from my policy which was "... as required by ..."

This does seem to imply that BasicMed is allowed although does not explicitly mention BasicMed anywhere in the policy. Assuming I did not just miss something.

 

[mandm]

I would recommend using another broker as well, brokers don’t always check all options and even if they do, they might only recommend the 2-3 options that come back first and not the ones that come in later.

 

[Punkinhead]

I would recommend using another broker as well, brokers don’t always check all options and even if they do, they might only recommend the 2-3 options that come back first and not the ones that come in later.

You may be right, but $40k hull on a simple tailwheel plane is only $1k/year so it's not worth putting much effort into. As long as I can get that coverage with Basicmed or Light Sport I'm fine with it. If they ever start requiring a class 3 medical I'll shop around because although I could pass one it would cost me $175 and a 45 minute drive. Not a big deal, but that's half a years worth of fuel.

 

[HornedFrogGrant]

"well, if you ever decide to go Basicmed the new carrier won't cover you".

With both BasicMed and "DL 'medical' for exercising Sport Pilot privileges" as well-established regulatory schemes at this point, companies that pull any shenanigans will likely find themselves going the way of the dinosaurs, as pilots take their patronage elsewhere.

 

[Anthem]

be very careful here. You will have to determine what the insurer really meant by what they wrote in there. I had a situation a few years back when the insurance company wrote "prior to solo, <XXXXX> will have obtained a 3rd class medical". Well since I had my private already, and this plane was acquired AFTER I had soloed- I already met those standards and currently holding basic med - they had a follow up a couple months later and asked about the medical. Well I said I was on basic med, and they threatened to cancel the policy as the "intention" was that it had to be 3rd or higher, even if legally it wasnt read that way. They immediately amended the policy with a rider stating that it was only in effect with a 3rd class or "higher" medical. Which is still vague - as who "defines" what "higher" is. . . lol So it would have been an argument in court - and not sure who would've won there as there were enough loopholes and what not. But it may cost you more than the insurance policy to legally argue. The result is that you wouldnt have gotten paid, or it would have cost you more than what you were going to get paid to get paid. . .

So, yes, insurance companies are requiring 3rd class medicals - especially with newer pilots to them, and this is especially more so with HP/Complex airplanes.. .

You can feel that insurance companies should go away by these policies, but the reality is that this marketplace only has a few people playing in it to begin with. So its not like there are many companies chomping at the bit to come in and write more policies. And yes, they treat BM as a lower class of medical rating than a Class 1,2,3 (previous massive discussion on this).

 

[Palmpilot]

There ought to be a penalty for writing ambiguous policies.

 

[Anthem]

There ought to be a penalty for writing ambiguous policies.

that I agree with. . . . but sometimes the vagueness also benefits us. . . lol

 

[hindsight2020]

I do wonder what an "approved equivalent" is to a medical certificate and what is the purpose of that wording being included?

It's talking about outliers like me. No current FAA medical but exercising class III privileges under a USAF FC-IIa , IAW 14 CFR 61.23(b)(9) and (b)(9)(i).

 

[MountainDude]

AOPA should get involved to make a law that prohibits insurance companies from discriminating against basicmed. If basicmed people cannot get insured, it effectively annuls this option. Of course, getting AOPA to do anything useful for GA is a different story.

 

[frfly172]

So far I havnt had trouble using Basic Med, figure when I get older I’ll go light sport. I do get a full physical from my PCP yearly.

 

[RudyP]

You may be right, but $40k hull on a simple tailwheel plane is only $1k/year so it's not worth putting much effort into. As long as I can get that coverage with Basicmed or Light Sport I'm fine with it. If they ever start requiring a class 3 medical I'll shop around because although I could pass one it would cost me $175 and a 45 minute drive. Not a big deal, but that's half a years worth of fuel.

Half a year's fuel???? That's not even half an hour for me...

 

[JScarry]

I have Old Republic and am over 65. I renewed in 2021 and 2022 with Basic Med. I have a Third Class this year so they may have changed their requirements since then and I wouldn’t know. My broker was not the sharpest so it’s also possible he didn't tell them.

 

[flyingron]

be very careful here. You will have to determine what the insurer really meant by what they wrote in there. =

What the insurer meant is largely immaterial. It is what the policy legally says and any reasonable reliance the policyholder makes from that statement if there is ambiguity.

Unlike the FAA, a private individual or corporation can't just invent interpretations and claim they mean something other than what they literally say.

 

[David Loftus]

I have the following policy language, also mentioned earlier:
"The pilot flying the aircraft must maintain a valid pilot certificate (including the appropriate
ratings) and valid medical certificate as required by the Federal Aviation Administration or
its approved equivalent."
BasicMed is the FAA's approved equivalent.

 

[Anthem]

What the insurer meant is largely immaterial. It is what the policy legally says and any reasonable reliance the policyholder makes from that statement if there is ambiguity.

Unlike the FAA, a private individual or corporation can't just invent interpretations and claim they mean something other than what they literally say.

Uhh, good luck fighting it in court. It will more than likely cost you more to fight then what the insurance policy would have potentially paid. . . and the possibility exists for them to win. The issue is that you are arguing an ambiguity as are they. And their ambiguity is more likely to be accepted as in the case I gave - it would have been a legal interpretation of the ambiguity, but any "reasonable reliance" as you mentioned - would have been more likely adjudicated in their favor.

AOPA should get involved to make a law that prohibits insurance companies from discriminating against basicmed. If basicmed people cannot get insured, it effectively annuls this option. Of course, getting AOPA to do anything useful for GA is a different story.

Why ? BasicMed allows you to fly. Nothing is preventing you from flying. Insurance is not the legal basis for you to fly. Its a private company that you are paying to offset your risk. Passing a law that says they cant do this or do that is like saying they cant discriminate based on age for vehicle or life insurance. They know where the risks are and will price it accordingly. Saying they cant is absurd.

 

[Palmpilot]

Why ? BasicMed allows you to fly. Nothing is preventing you from flying. Insurance is not the legal basis for you to fly. Its a private company that you are paying to offset your risk. Passing a law that says they cant do this or do that is like saying they cant discriminate based on age for vehicle or life insurance. They know where the risks are and will price it accordingly. Saying they cant is absurd.

I think I've heard of airports requiring aircraft owners based there to have insurance. If you can't find a place to keep your plane within a reasonable distance of where you live, you are de facto locked out of flying.

 

[Pinecone]

It's talking about outliers like me. No current FAA medical but exercising class III privileges under a USAF FC-IIa , IAW 14 CFR 61.23(b)(9) and (b)(9)(i).

Why don't you just get a 2nd class? At least when I was in, a USAF Flight Surgeon could issue a 2nd (or 3rd) Class FAA medical. certificate.

And BTW, it is 14CFR 61.23(b)(11) not (9).

(11) When a military pilot of the U.S. Armed Forces can show evidence of an up-to-date medical examination authorizing pilot flight status issued by the U.S. Armed Forces and—


(i) The flight does not require higher than a third-class medical certificate; and

(ii) The flight conducted is a domestic flight operation within U.S. airspace; or

 

[OneCharlieTango]

I got a quote to renew my insurance that gave me a choice of two carriers. I could stay with my current insurer (AIG) or go with a new carrier. They were within $20 of each other and the coverage was similar. I've never had a claim so I haven't had any interactions that would lead me to pick one over the other. I asked the agent if their office knew of any reason why I'd pick one over the other and she said, "well, if you ever decide to go Basicmed the new carrier won't cover you". That's kind of a big deal! I've been using Basicmed since the program started and it's written on my renewal form where I updated my hours, ratings, biennial, etc. The Class 3 medical requirement wasn't mentioned anywhere in the quote. She said AIG would cover me if I went Basicmed or sport pilot. Be careful out there...

What was the policy language that stated non-coverage for BasicMed? If it was like in #7, as others have already said, that unequivocally includes BasicMed.

 

[Punkinhead]

What was the policy language that stated non-coverage for BasicMed? If it was like in #7, as others have already said, that unequivocally includes BasicMed.

I've never had a quote include an entire policy I could read. The quote just highlighted the major coverages (hull value, deductibles, non-owned coverage, in motion and hangared coverage, etc). The quote had no written mention of the level of FAA medical required and it only came up when I started quizzing the agent on the phone. Even the binding document is just a bulleted list of coverages with no mention of the FAA medical. I've never seen the entire policy until after signing the binder and paying the premium.

 

[Chip Sylverne]

Uhh, good luck fighting it in court. It will more than likely cost you more to fight then what the insurance policy would have potentially paid. . . and the possibility exists for them to win. The issue is that you are arguing an ambiguity as are they. And their ambiguity is more likely to be accepted as in the case I gave - it would have been a legal interpretation of the ambiguity, but any "reasonable reliance" as you mentioned - would have been more likely adjudicated in their favor.



Why ? BasicMed allows you to fly. Nothing is preventing you from flying. Insurance is not the legal basis for you to fly. Its a private company that you are paying to offset your risk. Passing a law that says they cant do this or do that is like saying they cant discriminate based on age for vehicle or life insurance. They know where the risks are and will price it accordingly. Saying they cant is absurd.

The issue isn't disallowing age as a rating criteria. The issue is the underwriter arbitrarily disallowing the "valid medical certificate as required by the Federal Aviation Administration or its approved equivalent." after the holder reaches a certain age threshold. A private insuror taking the position that Basic Med is no longer an "approved equivalent" after age 70 seems overtly discriminatory, and the FAA's own reporting to Congress shows there is no basis in fact with which to make that judgement.

 

[Chip Sylverne]

I've never had a quote include an entire policy I could read. The quote just highlighted the major coverages (hull value, deductibles, non-owned coverage, in motion and hangared coverage, etc). The quote had no written mention of the level of FAA medical required and it only came up when I started quizzing the agent on the phone. Even the binding document is just a bulleted list of coverages with no mention of the FAA medical. I've never seen the entire policy until after signing the binder and paying the premium.

In most states, they are required to send you a sample policy on request.

 

[Chip Sylverne]

AOPA should get involved to make a law that prohibits insurance companies from discriminating against basicmed. If basicmed people cannot get insured, it effectively annuls this option. Of course, getting AOPA to do anything useful for GA is a different story.

I've had this discussion with e medical folks at AOPA regarding promoting and explaining the Basic Med program both to the medical and insurance industries. The response I got was they simply don't have the resources. It's kind of telling that it's difficult to find a Basic Med practitioner right in their own back yard in FDK.

 

[Anthem]

The issue isn't disallowing age as a rating criteria. The issue is the underwriter arbitrarily disallowing the "valid medical certificate as required by the Federal Aviation Administration or its approved equivalent." after the holder reaches a certain age threshold. A private insuror taking the position that Basic Med is no longer an "approved equivalent" after age 70 seems overtly discriminatory, and the FAA's own reporting to Congress shows there is no basis in fact with which to make that judgement.

I believe we've had this discussion in another thread. The FAA does not consider BM to be an equivalent. You might, and congress is trying to make it as an alternative, but they do not consider it an "equivalent" for Class 1, 2 or even 3. The reality is that pretty much anyone in class 1,2,3 can get BM, but that is not true in reverse. Therefore BM is not "equivalent" - and its not equivalent in insurers eyes either. The last two planes I have had, insurance has required a minimum of a class 3 - and Im sure thats going to continue to be the case for certain types of planes. they may not for a 152/172 - and maybe even a 182 type/class of planes. But anything beyond that - its becoming more and more that the requirement is to have a CL 1,2,3 for insurability. . .

As for age - age has always been a discriminatory factor for insurance on many things - whether thats cars, health, etc. As for whether BM has any statistical relevant over the other classes - well we've had that argument as well. They havent studied it enough to come up with the actual numbers and its relevance. But that shouldnt preclude a PRIVATE COMPANY from making choices on who it wants to insure or not insure. The reality is that while many on BM (and I would certainly not mind it for ease as well) - are fine. There are also people who cant or are unable to get or maintain a higher class medical. And insurance companies know that - and discriminate on it as it lowers their overall risk.

its a simple scenario - if you were an insurance company and were insuring a pool of aviators with all else being equal -
would you insure the 100 class 1 medical holders (or class 2, or 3)
or insure the 100 Basic Med holders ?

Your risk is almost assuredly going to be less with the non BM group.

 

[Tusayan]

Being able to pass an ill conceived medical exam is not what matters in relation to insurance claims, having accidents is what matters. The record reported to Congress in that regard indicates that BasicMed is equivalent to a third class medical.

At least the entirely pointless ECG protocol required for an ICAO Class 2 is avoided with both, lowering the burden for all private pilots in the US. That’s a really good example of a no value added minefield.

My BasicMed exam was done by a strip mall emergency care physician. AIG has no issues with it. No issue for me, but despite having no medical conditions or history and no medication I’d prefer to fly with no medical certificate at all, under MOSAIC. We’ll see how that comes to pass.

 

[Lindberg]

You will have to determine what the insurer really meant by what they wrote in there. I had a situation a few years back when the insurance company wrote "prior to solo, <XXXXX> will have obtained a 3rd class medical". Well since I had my private already, and this plane was acquired AFTER I had soloed- I already met those standards and currently holding basic med - they had a follow up a couple months later and asked about the medical. Well I said I was on basic med, and they threatened to cancel the policy as the "intention" was that it had to be 3rd or higher, even if legally it wasnt read that way.

Did you really not understand what that provision meant?

 

[Anthem]

Did you really not understand what that provision meant?

Oh I absolutely knew what that meant.... but having already soloed way back in the day, you could argue that it wasnt even a factor any more. so yes, we knew what the intent of the clause was - but the way it was written could be skewed many different ways. Would you have won in court ? probably not. Was it air tight ? Absolutely not.

 

[TCABM]

Our policy has this in the covered pilots section

Our insurer is on the record stating

Now that the rules have been published for the BasicMed, we’ve been answering questions by stating, “We are accepting the BasicMed medical the same as the 3rd class medical for satisfying our insurance policy requirements for a pilot medical. So if you opt to keep your pilot medical using the BasicMed program, rather than a 3rd class medical, it will not affect the coverage limits or premium of your policy.”

BasicMed and My Avemco Insurance Policy

www.avemco.com

We are comfortable allowing our partners (members) to utilize BasicMed without abrogating coverage.

 

[Anthem]

avemco is unique in this space. They are actually insuring pilots that reach and beyond 65/70 years of age. Kudos to them on that. They do however have significant limits to what they will insure - as in what planes they will insure, and I also believe that they dont really write smooth policies any more and almost all of them are sub-limit based. Also they generally dont write insurance policies for hull values that exceed some amount (and that amount is fairly low).

 

[Chip Sylverne]

Simple scenario - if you were an insurance company and were insuring a pool of aviators with all else being equal -
would you insure the 100 class 1 medical holders (or class 2, or 3)
or insure the 100 Basic Med holders ?

Your risk is almost assuredly going to be less with the non BM group.

Classes 1 and two are assuredly not the equivalent of class 3, they are by nature different examinations, and involve the exercise of the priveledges for hire.

If the question is 100 aviators with all else being equal, class 3 or basic med, your assertion that the risk of the non BM group being less is discriminatory and prejudicial, because it isn't borne out in fact as presented by the regulating body.

Even insurance companies must use facts when setting underwriting guidelines based on age, sex, race and such factors if they are to avoid suit for discriminatory practice. Show me numbers that prove that the Basic Med aviators present a statistically higher risk by virtue of their medical certification than those who hold a CL3.

You can't.

 

[Chip Sylverne]

avemco is unique in this space. They are actually insuring pilots that reach and beyond 65/70 years of age. Kudos to them on that. They do however have significant limits to what they will insure - as in what planes they will insure, and I also believe that they dont really write smooth policies any more and almost all of them are sub-limit based. Also they generally dont write insurance policies for hull values that exceed some amount (and that amount is fairly low).

AVEMCO has always written low hull limits and sub-limit liability cover. This is nothing new.