Airframe insurance

[RFguy]

Useful posts and comment here.

I am about to find out  just what cost it will be to insure an aircraft with low flying hours.

I will get some numbers to figure out if I should be just flying the club plane until 100 hours comes up. (wont take long, probably couple of months max).  Another pilot suggested the high cost insurance doesn't last long as I will fly a few long cross country legs  to build hours fast and get to the next skill-step reduction for insurance....

 

 

 

 

[skippydiesel]

In my , limited to one aircraft over about 11-12 years, the hull insurance (bit like automotive comprehensive) reduces annually with "no claims" and is not related directly to hours flown. Make a claim, after 11-12 years without, be ready to need heart start stimulation for how much your premium jumps up.

[Downunder]

6 hours ago, skippydiesel said:

In my , limited to one aircraft over about 11-12 years, the hull insurance (bit like automotive comprehensive) reduces annually with "no claims" and is not related directly to hours flown. Make a claim, after 11-12 years without, be ready to need heart start stimulation for how much your premium jumps up.

Local bloke's premium jumped 50% the following year, after a claim...

[Bruce Tuncks]

Here's my rationale for not paying for hull insurance:

Firstly, the plane is really just a toy and life would go on without it.

Secondly, the cost of insurance is too much. In 20 accident-free years I would easily have paid for a replacement plane if I had only banked the premiums.

Thirdly, a handy-person can fix a lot of stuff for only the price of the inputs and this is cheap compared to the commercial quotes that insurance uses.

As a generalization, it is bad economics to pay insurance for a loss you can afford. If you have ordinary luck, you will only recoup a third of your premiums with claims.

I hasten to say that I am referring to hull insurance, not third party injuries.

[RFguy]

How do they treat you say for two opposed examples:

1) you skid turn and spin on final because you are an idiot  and nearly die, aircraft burns.

2) land in a field due to engine failure and take off the nosewheel,  damage prop, engine etc ?

 

Edited October 26, 2020 by RFguy

[facthunter]

IF you have thousands of Tailwheel hours without a mishap, they get relaxed a bit. Till you are relatively unproven they charge a lot They have to make the figures add up or they are not in business long. Others who you might allow to fly your plane will be of interest to them also I never insured a Hull in the air. I reckon if it's written off I won't be around to worry about it. in a Hangar it might be burned  if some clown is refuelling or smoking etc. As to your examples  we are small fry . I don't think they would put a lot of effort into differentiating but if you were accumulating CASA fines and points they might just be happy to not do business with you.. you can only be uninsured IF you can cover the loss . I've had good experiences with Aviation Insurers but never really tested them. But notice how they treat others. Cheap premiums don't count if they don't pay up. Nev

[Kenlsa]

I’m with Bruce on this one.
I fly a glass plane and most in our club planes are glass. Seeing all the troubles that beset our students and the very infrequent private owners prangs, I have come to the conclusion that That insurance on a glass plane probably isn’t warranted. (Tho club a/c are, as risk is too great for the committee)

They are very easy to fix and very inexpensive. We have had a number of end overs, torn out nose wheels and wings impacting objects and u/ torn off. Multiple of each.

All fixed quick smart and cheaply. If it was so bad that it happened to be written off...no problem...coz so are you and you won’t be worried about it.

Tube and fabric is also easy to repair. A car jack to pump, piece of string to check straight and a bit of cloth to cover.

Carbon can be problematic as you need to cook it.

We have had 3 tin planes come to grief in recent times. one touched a wing due to a stationary undercarriage collapse and I mean hardly a touch, $26k and six months to fix. You couldn’t even see the damage.

Another didn’t make it to airfield crunching the u/c....a write off. Similar to an episode in our Jab that only took couple of layers of glass, 3 new bolts, one week then back flying.

latest tin plane incident involved a hard landing and the pilot didn’t even know he damaged it. Probably used to the Jab that can take anything you throw at it.  Cost $25k and 4 months .....so far.

 

So,

FRP..do it yourself

Tube and fabric. Similar to FRP

Carbon...expert and insurance 

Tin....”don’t leave home without it”
Ken

 

[Downunder]

1 hour ago, Bruce Tuncks said:

Here's my rationale for not paying for hull insurance:

Firstly, the plane is really just a toy and life would go on without it.

Secondly, the cost of insurance is too much. In 20 accident-free years I would easily have paid for a replacement plane if I had only banked the premiums.

Thirdly, a handy-person can fix a lot of stuff for only the price of the inputs and this is cheap compared to the commercial quotes that insurance uses.

As a generalization, it is bad economics to pay insurance for a loss you can afford. If you have ordinary luck, you will only recoup a third of your premiums with claims.

I hasten to say that I am referring to hull insurance, not third party injuries.

100% agree. I'm up to a new engine from the premiums I've saved.

 

15 minutes ago, Kenlsa said:

We have had 3 tin planes come to grief in recent times. one touched a wing due to a stationary undercarriage collapse and I mean hardly a touch, $26k and six months to fix. You couldn’t even see the damage.

A local aircraft had some insurance repairs. Lots of rumours about the repair facility making more damage to milk the payout.

Such as cutting engine cables with snips to remove the engine, therefore requiring new cables and labour to fix.

[Bruce Tuncks]

I agree that if you are the club's insurance officer then you will insure the hulls. I know this from personal experience. It would take a braver person than me to say "no" to insurance. Who knows what some idiot of a club member might do?

 

But the insurance companies are not stupid and although we sure made claims, we always paid more in premiums than we collected in claims.

Look at it from the company's point of view: Premiums = income, and costs = payouts plus overheads plus profits. The payouts can't come anywhere near the income from premiums.

I reckon the aviation world is small enough that news of poor treatment of a claimant would get around. This is a cynical way of saying that people I know who have made claims have been happy with the results.

 

Personally, my last dealings with an insurance company were a pleasant surprise. I had a bike stolen from my local gym, and it was my fault because the bike had not been locked with a cable.

The bike was not insured either, but they paid out under my household insurance. Sure, the amount was less than a year's premium, but here was I surprised to get anything.

What would really interest me would be an insurance co-op where a bunch of similar guys pooled their risk and where you paid nothing if nobody crashed.

Has this ever been tried?

 

[facthunter]

Careful people carry the idiots. That's how it works. IF you don't insure and cannot pay, you aren't carrying your responsibilities either.  Nev

[RFguy]

Now, if you decide to put a 6 cylinder Jabiru engine in your Foxbat (without the necessary praise from the manufacturer, and the wings fall off because you went > 150 kts , crash into a house and damage property and people, is the RAAaus liability  insurance going to pay up , as you had a modified aircraft ?  

[Bruce Tuncks]

As far as I know RF guy, they do not pay out if you have done anything against the regs.  So if you are insured, you need to obey the regs to the letter.

[RFguy]

Hi Bruce- right that's the hull insurer. How about the liability insurance RAaus provides- presumably that would have same caveats  ? - glen

Edited October 27, 2020 by RFguy

[skippydiesel]

Any insurance cover will be degraded or even nullified, if you are found to have broken "the rules".

 

It should be understood, by all who take out insurance, that the provider (underwriters etc) is providing a service that they wish to make a profit from. They are not in the business of paying out on a claim, if there are grounds to reduce or completely avoid part or all of the insured value.

[RFguy]

agreed. I would expect any modifications could amount to breaking the rules . Proving that some modification not approved by the mfr  did not cause an accident - you are probably in for some strong headwinds unless basic -  like instrumentation, navigation aids, etc etc- those things are easy to argue as safety enhancers. But say, wild example,  fitting a turbo to a engine would be a long bow to pull . Sure if you have a good enough barrister, heshe might argue that it was a safety enhancer, having more power, but I am sure and equal and opposite argument against could be made from the other side. 

[skippydiesel]

It seems to me, as one who is certainly not up on all the regulations, that if you modify , in any way, a factory built aircraft, without a written permission from the said factory,  you are courting potential problems.

 

You may feel (& have good grounds) that the modification had no bearing on the claim incident BUT if the insurers think otherwise, you will have to weigh the costs of taking legal action, against the value of the pay out, assuming that you win (costs of the action are not always awarded by the court).

 

My advice - if you want to indulge in mods (& I do) register your factory built,as an experimental (eg 24 E) and make sure the insurance company is aware (in writing) of any changes you are making OR purchase a 19 aircraft where everything is pretty much in the experimental category and the insurer should/must know this, when they accept your premium payment.

[onetrack]

Don't ever forget, either (and this applies to any form of insurance) - if you under-insure an item (say, for 2/3rds its true assessed value), trying to save money on premiums - then if you have a claimable "insurance event" (i.e. - a prang with moderate damage), the insurance company is entitled to only pay out 2/3rds of the cost of the repairs, as they will state the overall insurance coverage was only for 2/3rds of the full value, so that also means only a 2/3rds payout on repairs.

Edited October 27, 2020 by onetrack

[Jaba-who]

7 hours ago, onetrack said:

Don't ever forget, either (and this applies to any form of insurance) - if you under-insure an item (say, for 2/3rds its true assessed value), trying to save money on premiums - then if you have a claimable "insurance event" (i.e. - a prang with moderate damage), the insurance company is entitled to only pay out 2/3rds of the cost of the repairs, as they will state the overall insurance coverage was only for 2/3rds of the full value, so that also means only a 2/3rds payout on repairs.

It goes further than that as well. 
The insurer will have a fixed percentage or value of damage at which they write off the aircraft. If you underinsured at say 2/3 of the value then the threshold for writing off the aircraft is equally lower.
 

So you do some relatively minor damage but it reaches the artificially low threshold and it triggers a write off and a payout. The entire airframe now becomes the property of the insurer, even the “rest of the airframe that’s in good condition”. There is always a clause in the contract that stipulates the entire aircraft is their property so they can sell it off to try to recoup some of their losses. 
 

If you want to keep it to rebuild it or extract that you-beaut glass cockpit etc you will have to use some of that payout to buy back the good bits of what you thought was your own property. 
 

 

[RFguy]

good point Onetrack. 

 

I also understand that RAaus have to agree to it going to the 24E category, and mods need to be signed off by an RAaus high level person, which is fine- mods needs to be able to be peer reviewed . That has some flexibility.  True flexibility only comes with being the builder of a 19. 

[Roscoe]

This has got me thinking, how many RAAUS reg airplanes just fly around and rely on the RAA 3rd party coverage provided to members.

My LSA will be 7 yrs old when next Ins renewal is due, in the past I have insured the Hull and added a bit more 3rd party to the RAA coverage as well, but will really give it serious thought next renewal

[Bruce Tuncks]

Sorry guys I have zero experience with injury claims. I would expect the insurance company to avoid paying out if they could. My hope is to retire before finding out the answer to this. 

In the meantime, I just hope the RAAus insurance will be ok.

If you ever maim a young doctor while crashing into a kindergarten, you have my sympathy and I suggest you would be better off not surviving yourself.

[RFguy]

I think we're all well trained to know to avoid kindergartens.  We try to land on airstrips or as near as possible to like  an airstrip.

I cannot think of any recent history of aircraft going down and injuring persons and property in build up areas.

Certainly there have been some well documented ones on some of the busy city alternates-- bankstown, moorabin, essendon...

 

 

 

Edited October 28, 2020 by RFguy

[Downunder]

5 hours ago, Roscoe said:

and added a bit more 3rd party to the RAA coverage as well, but will really give it serious thought next renewa

Does it need to be topped up?

Does the RAA 3rd party really fall short of what's required?

 

From the RAA site....

 

The cover has an indemnity limit of up to $10,000,000 for liability arising from third party property damage or bodily injury including a sub-limit of up to $250,000 for liability arising from injuries to passengers (including student pilots). Depending on individual circumstances, you may require more than the limits described above, so you may need to maintain additional individual insurance.

Edited October 28, 2020 by Downunder

[Jaba-who]

16 hours ago, RFguy said:

I think we're all well trained to know to avoid kindergartens.  We try to land on airstrips or as near as possible to like  an airstrip.

I cannot think of any recent history of aircraft going down and injuring persons and property in build up areas.

Certainly there have been some well documented ones on some of the busy city alternates-- bankstown, moorabin, essendon...

 

 

 

Yep. I suspect you are correct here. As best I recall when ever  aviation Representative bodies have taken CASA to task about some overly intrusive stance about safety of innocent bystanders on the ground the oft quoted number of deaths and injuries Of bystanders from recreational aircraft is “zero”.  Even deaths from GA and airlines is probably zero as well. 
 

[Jaba-who]

15 hours ago, Downunder said:

Does it need to be topped up?

Does the RAA 3rd party really fall short of what's required?

 

From the RAA site....

 

The cover has an indemnity limit of up to $10,000,000 for liability arising from third party property damage or bodily injury including a sub-limit of up to $250,000 for liability arising from injuries to passengers (including student pilots). Depending on individual circumstances, you may require more than the limits described above, so you may need to maintain additional individual insurance.

I think it probably is OK for the average recreational pilot if it covers up to the full 10 million. But if I understand the wording as stated there is only $250k for passenger injury. Since that’s the most likely cause of a claim and claims for injury or death can be huge it doesn’t sound like it’s suitable to me. But I’m only going by what what’s been said . 
Currently the GA insurers and brokers are saying for a 4 seat aircraft you should have $20million cover. Based on past history of events I guess.

 

So I’d guess that for 2 seats yep $10mill sounds OK. But $250k doesn’t. 

I would reckon you want to ask every passenger what they make a year before taking them flying. 

Here’s a scenario. 
You decide to take an acquaintance flying. 
He’s a 35 year old orthopaedic surgeon. He’s in private practice and last year he personally ( taxable income ) made $1,000,000. ( This is currently lower end income for a busy orthopaedic surgeon. If he’s a plastic surgeon double it, if he’s a general surgeon maybe a little less. ) 

He has a 35 year old wife and three young young kids under 5. 
He expects to work till age 65. 
You crash and he dies or is left such that he needs lifelong 24 hour care. 
The family will sue you, that’s a given, these days. The findings go against as well. That’s pretty much a given these days as well. 
Even to cover his lost income, without covering on going medical expenses etc if he needs care, Inflation, etc you are looking at $20million. 

 

Is $250k enough -no way. Not even to cover lost lifelong income for a tradie. 

Is $10mill enough -  depends. 
 

 

 

Edited October 29, 2020 by Jaba-who