Insurance - don't believe the first broker you call

[Michael]

I wound up inheriting a student. Older guy (in his 50's) who had
taken lessons on and off, and finally finished. Brand new private
pilot, well over 100 hours at checkride. And he went out and bought a
Bonanza. And not a little one, either - a 1970's A-36 six-seater.
His CFI at the local FBO knew he was out of his depth and brought me
in.

So this guy is trying to get insurance. Less than 200 TT. No complex
time, no high performance time, no instrument rating. He got with an
agecy that was recommended. Was told $10,000+ if they could insure
him at all. In the end he was told they couldn't insure him at all
(couldn't find coverage), at any price, not even to take dual. Come
back when you have 250+TT and 25+ retract. Meanwhile they wrote the
airplane with me as the (only) named pilot - since the plane was far
away and would need to be brought home.

I hear stories like that here all the time - could not get insured at
any price. I simply don't believe it. Well, this time it was my
issue, so I started making phone calls.

It wasn't quick and easy. I made quite a few phone calls. But a week
later, my student told the agecy to go **** up a rope. He was covered
in the airplane. The insurance company wanted me to make 3 takeoffs
and landings in the airplane by myself (since I did not have time in
that particular model of Bonanza) before I instructed him in it (but
they would cover that as well - they simply named me as a pilot) and
they wanted him to get 25 hours dual with me before he could solo it.
They also wanted 25 hours solo before carrying passengers. And they
wanted just under $7000.

So the next time you hear "uninsurable at any price" from your agent,
don't leave it at that. Some things really are uninsurable at any
price, but they are few and far between and you probably don't want to
do that anyway. Most operations can be insured.

I could tell you the particular agencies, but it wouldn't do you any
good (unless you have this specific issue - low time pilot in
expensive Bonanza - in which case email me). There's no real
consistency. One company will write one operation but decline
another, and another company does just the opposite. It's not like
automotive insurance, where there are standard tables. Aviation
insurance is very much judgment based, and judgment varies.

Michael

[10Squared]

Andrew Gideon wrote:

> Michael wrote:
>
>> I could tell you the particular agencies, but it wouldn't do you any
>> good (unless you have this specific issue - low time pilot in
>> expensive Bonanza - in which case email me). There's no real
>> consistency. One company will write one operation but decline
>> another, and another company does just the opposite. It's not like
>> automotive insurance, where there are standard tables. Aviation
>> insurance is very much judgment based, and judgment varies.
>
> Why would the agent - which doesn't issue the actual insurance, as I
> understand that business - ever turn away business if someone to write the
> policy can be found? Something sounds off, here, as if we (outside the
> insurance business {8^) are missing a part of the puzzle.

No kidding. Particularly after reading that you should not submit an
insurance bid request to more than one agent since "they all use the same
underwriters". Recently I submitted one to Avemco and immediately got an
email saying they wouldn't cover. Falcon came back with a bid on the same
coverage request within a half day.

[Andrew Gideon]

Michael wrote:

> I could tell you the particular agencies, but it wouldn't do you any
> good (unless you have this specific issue - low time pilot in
> expensive Bonanza - in which case email me). There's no real
> consistency. One company will write one operation but decline
> another, and another company does just the opposite. It's not like
> automotive insurance, where there are standard tables. Aviation
> insurance is very much judgment based, and judgment varies.

Why would the agent - which doesn't issue the actual insurance, as I
understand that business - ever turn away business if someone to write the
policy can be found? Something sounds off, here, as if we (outside the
insurance business {8^) are missing a part of the puzzle.

- Andrew

[G.R. Patterson III]

Andrew Gideon wrote:
>

> Why would the agent - which doesn't issue the actual insurance, as I
> understand that business - ever turn away business if someone to write the
> policy can be found? Something sounds off, here, as if we (outside the
> insurance business {8^) are missing a part of the puzzle.

Avemco writes its own policies. In addition, AOPA is essentially a broker that deals with only one
company; I think EAA also works that way. So the guy contacts one of these three for his first
quote. For his second quote, he either deals with another of these three or contacts a real broker
(who then calls every other company).

George Patterson

[Almarz]

This is true, it's done all the time, but hopefully the guy will take
a hint and get some real specific training. the American Bonanza
Society has training sessions located all over the country that would
more than likely get him a good discount. He could also opt to go to
Flight Safety and take advantage of their Bonanza course.

Now I recently heard on an email list a guy complaining because he had
to spend close to $4K for Ercoupe insurance!!!!!!!!!!!!!!!!! Didn't
have the heart to reply to that one.



On 22 Nov 2004 08:27:41 -0800,
(Michael) wrote:

>I wound up inheriting a student. Older guy (in his 50's) who had
>taken lessons on and off, and finally finished. Brand new private
>pilot, well over 100 hours at checkride. And he went out and bought a
>Bonanza. And not a little one, either - a 1970's A-36 six-seater.
>His CFI at the local FBO knew he was out of his depth and brought me
>in.
>
>So this guy is trying to get insurance. Less than 200 TT. No complex
>time, no high performance time, no instrument rating. He got with an
>agecy that was recommended. Was told $10,000+ if they could insure
>him at all. In the end he was told they couldn't insure him at all
>(couldn't find coverage), at any price, not even to take dual. Come
>back when you have 250+TT and 25+ retract. Meanwhile they wrote the
>airplane with me as the (only) named pilot - since the plane was far
>away and would need to be brought home.
>
>I hear stories like that here all the time - could not get insured at
>any price. I simply don't believe it. Well, this time it was my
>issue, so I started making phone calls.
>
>It wasn't quick and easy. I made quite a few phone calls. But a week
>later, my student told the agecy to go **** up a rope. He was covered
>in the airplane. The insurance company wanted me to make 3 takeoffs
>and landings in the airplane by myself (since I did not have time in
>that particular model of Bonanza) before I instructed him in it (but
>they would cover that as well - they simply named me as a pilot) and
>they wanted him to get 25 hours dual with me before he could solo it.
>They also wanted 25 hours solo before carrying passengers. And they
>wanted just under $7000.
>
>So the next time you hear "uninsurable at any price" from your agent,
>don't leave it at that. Some things really are uninsurable at any
>price, but they are few and far between and you probably don't want to
>do that anyway. Most operations can be insured.
>
>I could tell you the particular agencies, but it wouldn't do you any
>good (unless you have this specific issue - low time pilot in
>expensive Bonanza - in which case email me). There's no real
>consistency. One company will write one operation but decline
>another, and another company does just the opposite. It's not like
>automotive insurance, where there are standard tables. Aviation
>insurance is very much judgment based, and judgment varies.
>
>Michael

[Michael]

Andrew Gideon > wrote
> Why would the agent - which doesn't issue the actual insurance, as I
> understand that business - ever turn away business if someone to write the
> policy can be found? Something sounds off, here, as if we (outside the
> insurance business {8^) are missing a part of the puzzle.

I know we are missing a part of the puzzle. I don't know what it is.

But I most certainly do know that brokers sometimes make their own
decisions about what's right. I know that when Tina bought her
Starduster, she had a very difficult time getting the insurance
company to approve an instructor - or so she thought. In reality, the
broker never even submitted those names to the insurance company. I
only found that out after that particular broker died.

In this case, the first broker wasn't turning away business. He
convinced the owner to have the airplane insured with him, with me as
the named pilot, and keep flying rentals until he could be named. He
was not terribly happy when I found another solution and he lost the
business.

Michael

[Ron Natalie]

>
> No kidding. Particularly after reading that you should not submit an
> insurance bid request to more than one agent since "they all use the same
> underwriters". Recently I submitted one to Avemco and immediately got an
> email saying they wouldn't cover. Falcon came back with a bid on the same
> coverage request within a half day.

Avemco isn't an agent. Avemco is a direct insurer. They aren't talking
to anybody but themselves. An independent broker will shop your quote
(potentially) to several underwriters.

[Roy Smith]

Michael > wrote:
>Andrew Gideon > wrote
>> Why would the agent - which doesn't issue the actual insurance, as I
>> understand that business - ever turn away business if someone to write the
>> policy can be found? Something sounds off, here, as if we (outside the
>> insurance business {8^) are missing a part of the puzzle.
>
>I know we are missing a part of the puzzle. I don't know what it is.

I think what's missing is that you (the editorial you) think the
broker is working for you, but in reality he's working for himself.
Why bust his butt researching a bid on a difficult situation when for
the same amount of time and effort he can close two simple deals?

Brokers lie, just like everybody else. A few years back, I got a
renewal notice from my boat insurance broker. The policy quoted was
with a different company than I had before. There were some specifics
of the old coverage that I liked so I asked them to quote a renewal
with the old company. I was told that the old company had canceled my
coverage and would not renew me.

I was ****ed. I had never been late with a payment, and had never
made any claims. What possible reason could they have for cancelling
me? So I called the insurance company directly. What I found out
was:

1) They had no problem with me as a policyholder and would welcome my
renewal business. They were even willing to increase my coverage.

2) My broker was no longer representing that company, and *that's* why
the broker couldn't quote me a policy from them. The didn't want
to tell me this, so they lied and said it was the insurance
company's fault.

I asked the insurance company for the name of another broker in the
area that represented them. I called up that broker, told them what
policy I wanted and who I wanted it from, and that was that. All I
needed to do was send them a letter stating that I was withdrawing the
first broker as my representitive. This is standard insurance
industry stuff; a company won't quote a policy to a broker if another
broker already has that account. In theory, it keeps brokers from
poaching each other's customers, but in practice it really just makes
it hard for customers to get competitive bids.

[Michael]

(Roy Smith) wrote
> >I know we are missing a part of the puzzle. I don't know what it is.
>
> I think what's missing is that you (the editorial you) think the
> broker is working for you, but in reality he's working for himself.
> Why bust his butt researching a bid on a difficult situation when for
> the same amount of time and effort he can close two simple deals?

I like that explanation. It is consistent with my experience, and it
does not resort to conspiracy or malice to explain that which is
adequately explained by simple venality and laziness.

So I guess the take-home lesson is that if you don't get an answer you
like, keep calling around for someone who is hungry to get your
business. Of course that's exactly what the guys who write the
insurance columns tell you not to do, but aren't they the guys who
work for the larger, more established brokerages that aren't hungry
who stand to lose the most if everyone starts doing this?

Michael