Insurance - smooth limits

[Paul kgyy]

This is a follow-up to a discussion some time back about liability
coverage, specifically about using "smooth limits", which eliminates
the typical $100,000 cap per person. I've been buying my insurance
through AOPA, and they have told me that their carriers would not offer
smooth limits on aircraft the age of my 1969 model. I just received a
fax from AOPA Insurance that they have found a carrier that will
provide this coverage. The only catch is, it doubles my premium!

I'm curious how many of you owners do carry smooth limits.

[[email protected]]

Paul,
We switched from AOPA AIG to USAIG (through Wenk Aviation) last year
in order to get the $1M smooth paying something like 25% more and with
the condition that we both have to go through Wings training program
every year. When our insurance was up for renewal this year, I checked
with several agencies/agents (Travers, Bob Leuten's CardinalFlyers,
AOPA) and again learned that they would not offer smooth limit for
relatively low time pilots like us (we have just over 350 and 400hrs
with more than 100hrs in type). I believe the minimum requirement is
something like 750hrs. The age of the aircraft did not come into
question. We have a 1970 C177B. So we stayed with USAIG. You may want
to give Wenk Aviation a try. Their tel no is 847-433-8370

[TaxSrv]

"Paul kgyy" wrote:
> ...The only catch is, it doubles my premium!
>
> I'm curious how many of you owners do carry smooth limits.
>

I think it depends upon how often, if at all, you carry passengers who
would sue you for negligence in the event of an accident. If say
mostly solo, but occasionally friends or family, I don't see
additional cost as justified. For some older guys I know, if they
were to claim "loss of consortium," I believe they'd be lying. :-)

Fred F.

[[email protected]]

Fred,
Even if your family members and friends don't want to sue you, I don't
believe that $100K sublimit is enough to cover hospital cost for
serious accidents.

Here is an article on the subject written by Rick Durden, a practicing
aviation attorney and pilot

The Pilot's Lounge #85: Some Blunt Talk About Aviation Insurance (or,
What You Don't Know About Sublimits Can Hurt You)


http://www.avweb.com/news/columns/189307-1.html

[Ben Jackson]

On 2005-05-04, > wrote:
> Fred,
> Even if your family members and friends don't want to sue you, I don't
> believe that $100K sublimit is enough to cover hospital cost for
> serious accidents.

Not that it would matter, since there are even smaller (like $3000)
family medical sublimits.

--
Ben Jackson
>
http://www.ben.com/

[Robert M. Gary]

I don't usually fly indigent people myself. Most have medical coverage
themselves.
However, I think you are on to something. I also think it may be too
risky to fly in a single engine. Just double the price and get a twin.
But a light twin isn't really that safe, just double the price and get
a Barron.
But a Barron isn't that safe, just double the price and get a King Air.
But a King Air isn't that safe, just double the price and get a
Citation.
But a Citation isn't that safe, just double the price and get an old
707.
But a 707 isn't that safe, just double the price and get an old 737.\
But a old 737 isn't that safe, just double the price and get a newer
737.
But flying yourself isn't that safe, just double, double.. the price
and higher an off duty airline crew to fly for you.

The point is that you have to do a proper ROI. At some point in life,
you will have to take a risk. Where you place your risk and how much
depends on what you want to do. You could sit in your living room
curled up in a ball hoping no one ever sues you. Or you can just accept
it as a way of life, buy the insurance that is reasonable and live your
life as best you can. You may or may not have enough to cover someones
hospital bills but that comes after their personal health insurance.
Its just like a car accident, the insurance settlement is just used to
reimb your medical insurance company.

-Robert, CFI, MBA

[[email protected]]

Robert,
I agree. If one wants to avoid being sued, one should not even drive
a car or own a dog let alone flying, owing a plane and taking
passengers. We give rides to relatives, friends and their kids as
often as weather and opportunity permit even when we had only $100K
sublimit. Getting the smooth coverage at 25% more in insurance cost is
certainly worth it for us.

Hai Longworth

[xyzzy]

Robert M. Gary wrote:

> I don't usually fly indigent people myself. Most have medical coverage
> themselves.

This won't protect you. Their insurance may be inadequate (lots of
middle class people have company insurance with 20% copays and caps,
etc) plus their insurer can still go after you. Before I went with an
HMO that doesn't require claim forms, my medical insurance claim forms
used to ask if there was an accident involved, and I assume if you say
yes they may choose to get more information to go after the person who
caused it. Also, even if you don't have claim forms or don't check yes
on the box, medical insurance companies routinely hire auditing firms to
check their claims for ones that may be due to an accident so they can
follow up and see if they can ding someone else for it.

I know this because my wife goes to a chiropractor and a couple of times
they have sent her letters asking her if she was injured in an accident
and if so to contact them with the pertinent info about the other parties.

[Robert M. Gary]

But that doesn't exclude them from receiving treatment, that just means
the HMO can go after you. The point was that not having enough
insurance does not mean they will be sitting on the street in front of
the hospital w/o medical care.
So, if the only issue is being sued, you have to make a personal
assessment of the situation. You can't just blindly say "more insurance
is better" until your bank account is empty from the premiums. You
can't assign *ALL* your risk in life to an insurance company. You just
need to decide how much of that risk you are willing to share yourself.

[kontiki]

Bottom line is you still have to have enough money left to buy food,
pay the utilities, hangar rent, buy AVGAS and occasionally soap & tooth brush.

(Then again you could just live in the hangar on a cot)

[[email protected]]

Paul kgyy wrote:
>
> I'm curious how many of you owners do carry smooth limits.

I do. The only time I couldn't get it was after switching planes and
having nearly zero time in type. The follwing year everything was
back to normal. Every year my broker (Falcon. A good one!) sends me
quote for one million smooth and $100K sublimit. The smooth quote is
about 25% more, but offers a potentional injured passenger up to 10
times as much coverage. I have assets to protect, so the premium
increase is worth it for me. YMMV.

John Galban=====>N4BQ (PA28-180)

[George Patterson]

Paul kgyy wrote:
>
> I'm curious how many of you owners do carry smooth limits.

I never did.

George Patterson
There's plenty of room for all of God's creatures. Right next to the
mashed potatoes.

[TaxSrv]

"xyzzy" wrote:
> ...
> Before I went with an
> HMO that doesn't require claim forms, my medical insurance claim
forms
> used to ask if there was an accident involved, and I assume if you
say
> yes they may choose to get more information to go after the person
who
> caused it.

Does that happen? Medical care is expensive, but so is paying
attorneys to pay experts to investigate an accident and determine if
the pilot was negligent. They can't sue by themselves; they have to
convince the insured to sue, and turn over any award to the insurance
company.

Fred F.

[[email protected]]

On 4-May-2005, "Paul kgyy" > wrote:

> I'm curious how many of you owners do carry smooth limits.


We carry $1M smooth liability on our Arrow IV. According to our broker, it
adds 2-3 hundred to the premium, but only one or two companies offer it.
All three partners have between 850 and 2000 hours and all are instrument
rated. Apparently, the IR is a big deal for liability premiums. On the
other hand, retractable gear, which raises hull premiums a fair bit, has
little impact if any on liability premiums. That's reasonable since gear
problems rarely cause serious injuries.

--
-Elliott Drucker

[[email protected]]

On 4-May-2005, "TaxSrv" > wrote:

> They can't sue by themselves; they have to
> convince the insured to sue, and turn over any award to the insurance
> company.


I don't think so. An insurance carrier that has paid a claim for injuries
caused by a third party has every right to sue that third party to recover
its losses. It's called subrogation, and it's done all the time if the
underwriter believes there is a good chance of actually collecting.

--
-Elliott Drucker

[TaxSrv]

> > They can't sue by themselves; they have to
> > convince the insured to sue, and turn over any award to the
insurance
> > company.
>
> I don't think so. An insurance carrier that has paid a claim for
injuries
> caused by a third party has every right to sue that third party to
recover
> its losses. It's called subrogation, and it's done all the time if
the
> underwriter believes there is a good chance of actually collecting.
> --
> -Elliott Drucker

All well and good, but what of all the auto accidents every day? How
often do drivers receive a bill from the injured party's
hospitalization insurance carrier, under threat of suit for
negligence? Fat chance those people, and the friends they tell the
story to, will consider that company in the future for their
hospitalization coverage. The subrogation clause in my health policy
says if I receive a damage award, all or part may have to be paid over
to them.

Fred F.

[Robert M. Gary]

Again, how much risk are you willing to take? You can't assign all your
risk in life to insurance companies. There are risks in life, get over
it (and no, a loss in court does not mean you will lose your house and
car, etc you'd never be able to pay court fees if the court took away
your ability to work your career).

-Robert

[xyzzy]

TaxSrv wrote:

>>>They can't sue by themselves; they have to
>>>convince the insured to sue, and turn over any award to the
>
> insurance
>
>>>company.
>>
>>I don't think so. An insurance carrier that has paid a claim for
>
> injuries
>
>>caused by a third party has every right to sue that third party to
>
> recover
>
>>its losses. It's called subrogation, and it's done all the time if
>
> the
>
>>underwriter believes there is a good chance of actually collecting.
>>--
>>-Elliott Drucker
>
>
> All well and good, but what of all the auto accidents every day? How
> often do drivers receive a bill from the injured party's
> hospitalization insurance carrier, under threat of suit for
> negligence? Fat chance those people, and the friends they tell the
> story to, will consider that company in the future for their
> hospitalization coverage.

You say that like most or even a significant portion of insured people
have a choice on who to use for their hospitalization coverage.

[[email protected]]

Keep in mind, also, that $1M smooth gives the ins co a lot
more incentive to defend YOU.

You want them to be very interested in this. Otherwise, they will
write the check for $100K very quickly and bow out.

You will then bear the cost of defending the rest of the story.

Bill Hale

[Ron Rosenfeld]

On 4 May 2005 11:05:52 -0700, "Paul kgyy" > wrote:

>This is a follow-up to a discussion some time back about liability
>coverage, specifically about using "smooth limits", which eliminates
>the typical $100,000 cap per person. I've been buying my insurance
>through AOPA, and they have told me that their carriers would not offer
>smooth limits on aircraft the age of my 1969 model. I just received a
>fax from AOPA Insurance that they have found a carrier that will
>provide this coverage. The only catch is, it doubles my premium!
>
>I'm curious how many of you owners do carry smooth limits.

I've always carried smooth limits. At present it's $1M. I get my
insurance through Falcon. I have no idea how much more it is than
$100K/seat as I'd never consider carrying that.

My airplane is a 1965 Mooney M20E, and I am the only pilot.


Ron (EPM) (N5843Q, Mooney M20E) (CP, ASEL, ASES, IA)

[Robert M. Gary]

I'm not sure what you mean by "bow out". The $100, 000 does **NOT**
include legel defense. They are responsible to reach a settlement. They
will not settle for more than the amount of your coverage, however if
you go to the end of trial and are awarded more than the $100,00 you
would be stuck with the difference.

-Robert

[[email protected]]

Maybe I'm wrong.

If you have 100K ins, they might pay the $100K happily and not defend U
at all,
since it could cost more than $100K to fight the case. You could
easily be
on the hook for anything > $100k without any help.

If you have $1m ins, they will be interested in your case... they
wouldn't just
write a check for the $1m. Would be worth defending. They might reach
a settlement that would end the deal.

Seems like having them have LOTS of skin in the game is what you are
paying for. Bill

[Newps]

wrote:
> Maybe I'm wrong.
>
> If you have 100K ins, they might pay the $100K happily and not defend U
> at all,

Only if the other passenger settles. Remember we are only talking about
passengers since the full million is available for people on the ground.