Smooth policy????

[Tri-Pacer]

Recently a thread was posted concerning a "smooth insurance policy"

What is a "smooth policy"

Thanks

Paul
N1431A

[Peter R.]

Tri-Pacer > wrote:

> Recently a thread was posted concerning a "smooth insurance policy"
>
> What is a "smooth policy"

A liability policy that states "minimum bodily injury and property damage
per occurrence limit of $1,000,000 for coverage bodily injury and property
damage."

This is much higher coverage than the typical liability policy.

Here's some interesting reading:

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

--
Peter

[Dave Butler]

>>What is a "smooth policy"
>
>
> A liability policy that states "minimum bodily injury and property damage
> per occurrence limit of $1,000,000 for coverage bodily injury and property
> damage."

Minimum? That doesn't sound right. How about "maximum"?

Also, what makes it "smooth" is the absence of per-person limits, typically
$100K per person.

[Peter R.]

Dave Butler > wrote:

> Minimum? That doesn't sound right. How about "maximum"?

Yep, my mistake.

> Also, what makes it "smooth" is the absence of per-person limits, typically
> $100K per person.

But there is a maximum limit of $1,000,000 payout for all claims combined,
right? Wouldn't this result in a per person limit of sorts (at least as
far as the insurance company is concerned) if more than one passenger sued
the insurance company?



--
Peter

[Dave Butler]

>>Also, what makes it "smooth" is the absence of per-person limits, typically
>>$100K per person.
>
>
> But there is a maximum limit of $1,000,000 payout for all claims combined,
> right?

Yes, if that's the smooth limit.

> Wouldn't this result in a per person limit of sorts (at least as
> far as the insurance company is concerned) if more than one passenger sued
> the insurance company?

Effectively, yes, but there is no explicit per-person limit stated in the
policy. That's what makes it smooth, as I understand it.

[Ronnie]

Isn't it sad that insurance considerations impact
our flying to such an extent? Oh for the days of
being able to give a kid an airplane ride without
having to worry about people suing you.


"Robert M. Gary" > wrote in message
ps.com...
> Smooth just means there is no per-person limit (or in the case of
> Avemco per-family limits as well). If you have a $1million "smooth"
> policy, that entire $1 million is available to passengers (although the
> totally cannot exceed $1million so they have to share).
> Smooth limits are becoming a thing of the past. Some organizations
> still require it (like Boy Scouts) but there are work arounds EAA will
> "smooth" any existing policy for free if its for Young Eagles, which
> Boy Scouts counts. It just means that when you turn in your BSA flight
> permit you must include both your insurance policy and your EAA number
> and the parents must fill out 1) BSA "high-risk" waver 2) BSA trip
> permit 3) EAA Young Eagles registration. I usually appoint someone to
> just hand out clip boards and collect paperwork.
>
> -Robert
>

[Robert M. Gary]

When my dad was a kid his High School English teacher gave him an
airplane ride. He later went on to a long and distinguished career as a
Navy pilot including several tours in Vietnam. Today a teacher would
certainly be fired for exposing the school to that liability. My
grandmother wasn't even there at the time and I'm sure she didn't sign
a waver.

-Robert

[skym]

It's what is generally called a "single limit" policy in
legal/insurance circles. You have a million bucks of insurance
available to pay the claims, whether one or a hndred. One claimant
might get $1, another $10.43, and the other $999,989.57; or whatever ,
so long as the total doesn't exceed $1mm. Your auto policy may be a
25/50 policy which is $50,000 of insurance but no more than $25,000 to
any one claimant. The aviation policies are sometimes quoted as
$1mm/$100m, which means that no one claim will get more than $100,000
from insurance. This type of coverage is a joke. If you crash with 3
people on board, and don't kill or injure anyone on the ground or
damage property, you only have up to $100,000 available for each
person, i.e. $300,000 of total insurance. You'd have to injure/kill 10
people to to get the $1mm of protection...highly unlikely.

[Robert M. Gary]

Plus, in auto insurance a 25/50 policy may only have $5000 in
liability. If you hit two cars you may only have $5000 to cover teh
cars even though you have $50,000 coverage per accident.

-Robert

[soxinbox]

I just got quotes for a turbo arrow with 85k hull, 100k/1m, I have about 250
hours with less than 100 in type, no instrument rating (yet).
Avemco just shy of $2700
AOPA/AIG: just over $1900
AOPA/Phoenix: $1775
I just thought I would share this info since it seems shocking the
differences in price between very similar policies.
Next year I will get a 5% for instrument ticket, and a few years from now,
5% for over 500 hours TT and 100 in type.

"Tri-Pacer" > wrote in message
...
> Recently a thread was posted concerning a "smooth insurance policy"
>
> What is a "smooth policy"
>
> Thanks
>
> Paul
> N1431A
>

[Newps]

skym wrote:
The aviation policies are sometimes quoted as
> $1mm/$100m, which means that no one claim will get more than $100,000
> from insurance.


That should read "no one claim from a passenger." The full amount of
the insurance is available to anybody else.

[Jonathan Goodish]

In article >,
"Tri-Pacer" > wrote:

> Recently a thread was posted concerning a "smooth insurance policy"
>
> What is a "smooth policy"
>
> Thanks
>
> Paul
> N1431A


Personally, I don't think that a $1M smooth policy really buys you much
additional risk protection over the per-seat sub-limits. In my case it
makes even less sense, as I rarely ever carry passengers, other than my
wife.

Note also that some policies specify PER SEAT sub-limits, and other
policies specify PER PERSON sub-limits. The former places compensation
limits on the passengers, while the latter places compensation limits on
everyone, including people on the ground.

I suspect that if you routinely carry passengers, and have substantial
assets, a higher-value "smooth" policy might make more sense. In my
opinion, the $1M smooth is little more than a "feel good" policy for
most people.



JKG

[smackey]

You're right as to some; others are $100m per person, wherever situated
at the fated moment. I suppose if my engine stops just after a
straight out departure from 25 here, there will be a whole lot of
people on the ground to worry about. It's just that elsewhere here in
Big Sky Country, there's soooooo much vacant real estate. ;)

[Robert M. Gary]

> You're right as to some; others are $100m per person, wherever situated
> at the fated moment. I suppose if my engine stops just after a
> straight out departure from 25 here, there will be a whole lot of
> people on the ground to worry about. It's just that elsewhere here in
> Big Sky Country, there's soooooo much vacant real estate. ;)

People on the ground are not subject to the sublimit, just passengers.
People on the ground exercise your liability limit (usually $1
million).

-Robert

[M]

If you never carry passengers other than your immediate family members,
then the 1M smooth policy is a genuine waste of money.

However if you do even occasionally carry passengers, you should
seriously consider 1M smooth policy. Almost all the plane owners have
at least several hundred thousands worth of personal assets. In a
crash that results in personal injury the $100k submit can't even begin
to pay for anything, and the insurance company will likely wash its
hands and pay out that $100k w/o spending much on a good attorney for
your defense. The 1M liability will cause the insurance company to
take the case seriously and spend money on a really good attorney.

--M

Jonathan Goodish wrote:
>
> Personally, I don't think that a $1M smooth policy really buys you much
> additional risk protection over the per-seat sub-limits. In my case it
> makes even less sense, as I rarely ever carry passengers, other than my
> wife.
>
> Note also that some policies specify PER SEAT sub-limits, and other
> policies specify PER PERSON sub-limits. The former places compensation
> limits on the passengers, while the latter places compensation limits on
> everyone, including people on the ground.
>
> I suspect that if you routinely carry passengers, and have substantial
> assets, a higher-value "smooth" policy might make more sense. In my
> opinion, the $1M smooth is little more than a "feel good" policy for
> most people.
>
>
>
> JKG

[Jerry]

The last time I checked with Avenco, there sublimit was $100,000 per person
(in aircraft or outside aircraft). Thus, went with a different company.

Jerry in NC

"Robert M. Gary" > wrote in message
oups.com...
>> You're right as to some; others are $100m per person, wherever situated
>> at the fated moment. I suppose if my engine stops just after a
>> straight out departure from 25 here, there will be a whole lot of
>> people on the ground to worry about. It's just that elsewhere here in
>> Big Sky Country, there's soooooo much vacant real estate. ;)
>
> People on the ground are not subject to the sublimit, just passengers.
> People on the ground exercise your liability limit (usually $1
> million).
>
> -Robert
>

[Jonathan Goodish]

In article om>,
"M" > wrote:
> If you never carry passengers other than your immediate family members,
> then the 1M smooth policy is a genuine waste of money.
>
> However if you do even occasionally carry passengers, you should
> seriously consider 1M smooth policy. Almost all the plane owners have
> at least several hundred thousands worth of personal assets. In a
> crash that results in personal injury the $100k submit can't even begin
> to pay for anything, and the insurance company will likely wash its
> hands and pay out that $100k w/o spending much on a good attorney for
> your defense. The 1M liability will cause the insurance company to
> take the case seriously and spend money on a really good attorney.


If someone is going to hire an attorney to sue, chances are they're
going after more than $1M if you have those assets. Between attorney's
fees and court costs, I'm not sure that it would be worth anyone's time
to go after, say, $500k when their other option is to walk away with
$100k and not have to pay anyone.

If your assets exceed $1M, obviously those assets are still at risk if
your policy limits are $1M smooth.

Personally, I don't plan to crash and do everything possible to avoid
it. Anyone can decide to sue for any reason, but if you're that
paranoid then you probably shouldn't be carrying passengers to begin
with. Bottom line is that I don't think the $1M smooth policies really
buy you much, nor do I think that the risk is great enough to worry
about the $100k per seat sub limits.



JKG

[Jonathan Goodish]

In article . com>,
"Robert M. Gary" > wrote:
> People on the ground are not subject to the sublimit, just passengers.
> People on the ground exercise your liability limit (usually $1
> million).

People on the ground are subject to the sub limit if the policy sub
limit states PER PERSON and not PER SEAT or PER PASSENGER.

Avemco used to have per seat/per passenger sub limits, but I'm not sure
if they still do. There may be other underwriters who do the same.



JKG

[Longworth]

X-archive-no: yes

Jonathan Goodish wrote:
> Personally, I don't plan to crash and do everything possible to avoid
> it. Anyone can decide to sue for any reason, but if you're that
> paranoid then you probably shouldn't be carrying passengers to begin
> with. Bottom line is that I don't think the $1M smooth policies really
> buy you much, nor do I think that the risk is great enough to worry
> about the $100k per seat sub limits.

Jonathan,
I used to think in the same line until reading Rick Durden's
article which someone cited earlier in this thread:

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

"Some Blunt Talk About Aviation Insurance (or, What You Don't Know
About Sublimits Can Hurt You)
............

Some years ago I worked a case involving a pilot who had a million
dollar policy with $100,000 sublimits. It appeared he was doing
something that might be considered less than safe while carrying one
passenger. He crashed and was killed instantly. The passenger survived
for a period of time, in hideous pain, before dying. The passenger's
estate sued the pilot's estate. The pilot's insurance company put up
the $100,000 sublimit; however, it was nowhere near enough to pay what
was being demanded by the estate of the deceased passenger. Yes, the
estate of the pilot got hit. The widow and children suffered
financially. Now, one of the widow's memories of her husband is that he
was too cheap to buy adequate insurance and it hurt her and the kids.

Yes, the $100,000 sublimit policy (as well as the smooth policy) does
pay for your attorney fees if you are sued. The costs of your defense
do not come out of the $100,000 (or $1 million) pool of money that is
available to pay a person making a claim against you. If you have few
assets beyond your airplane, a $100,000 sublimit policy is likely to be
enough; the injured person will probably take it and go away. However,
by the time you get up to ownership of a Cessna 182 or Cherokee Dakota,
the chances are pretty good that you have assets beyond that airplane;
otherwise you could not have afforded it in the first place. So, to
protect yourself, take a hard look at buying a "smooth" policy, with $1
million completely available, because the chances are that if you screw
up and hurt someone, it won't be a lot of people and each one will have
damages of more than $100,000. You've spent a lot on your airplane --
don't go cheap in protecting yourself and your family.

Sadly, in my experience, a majority of pilots who buy insurance don't
know what a sublimits policy is or what the ramifications are; only
that they are cheaper to buy than a smooth policy.

As I heard recently, cheap is never good and good is never cheap. "

This year, it cost us ~ 1/3 more to get a smooth policy. I consider
the extra $500 is a reasonable price to pay so that we can continue to
enjoy sharing our love of aviation with relatives, friends,
acquaintances and even complete strangers while having some degrees of
protection to our assets. We do everything possible to fly safe but
accidents can happen even to the very experienced and very careful
pilots, IMHO, $100K per passenger is extremely inadequate to pay for
medical cost and compensation for death or serious injuries.

Hai Longworth

[Mike Spera]

Perhaps the widow should forget about the insurance and consider the
husband's reckless regard for her, the kids, and his passenger by doing
something stupid while flying an airplane.

> Some years ago I worked a case involving a pilot who had a million
> dollar policy with $100,000 sublimits. It appeared he was doing
> something that might be considered less than safe while carrying one
> passenger.

..stuff snipped, then this tidbit
>Now, one of the widow's memories of her husband is that he
> was too cheap to buy adequate insurance and it hurt her and the kids.
>

[Jonathan Goodish]

In article . com>,
"Longworth" > wrote:
> > Personally, I don't plan to crash and do everything possible to avoid
> > it. Anyone can decide to sue for any reason, but if you're that
> > paranoid then you probably shouldn't be carrying passengers to begin
> > with. Bottom line is that I don't think the $1M smooth policies really
> > buy you much, nor do I think that the risk is great enough to worry
> > about the $100k per seat sub limits.
>
> Jonathan,
> I used to think in the same line until reading Rick Durden's
> article which someone cited earlier in this thread:


What Rick doesn't say, at least in your excerpt, is what the pilot's
estate was worth. My entire point is that the risk isn't that great
with $100k sub limits on a $1M policy, because if your estate is worth
more than $1M the policy isn't going to protect you anyway. If your
estate is worth, say, $500k, there isn't much incentive IMO to go after
it as a plaintiff because, in the end, the plaintiff may not wind up
with much more than $100k even if they're successful in the lawsuit.

My other point is that I don't intentionally do stupid things in the
airplane, allowing me to avoid the type of accident that Rick's example
illustrates.

Though there are exceptions to every rule, my guess is that most cases
where passengers litigate against a pilot are won or lost based on the
plaintiff's ability to prove willful negligence on the part of the pilot
or operator. If you don't do stupid things with your airplane, you
significantly reduce your risk of bad things happening.



JKG

[Roger]

On 11 Mar 2006 06:23:49 -0800, "Longworth" >
wrote:

>X-archive-no: yes
>
>Jonathan Goodish wrote:
>> Personally, I don't plan to crash and do everything possible to avoid
>> it. Anyone can decide to sue for any reason, but if you're that
>> paranoid then you probably shouldn't be carrying passengers to begin
>> with. Bottom line is that I don't think the $1M smooth policies really
>> buy you much, nor do I think that the risk is great enough to worry
>> about the $100k per seat sub limits.

And for the typical pilot who reads this group, try to find a company
that will write you a smooth $1MM (Million is two Ms in the financial
industry. Why I don't know)
>
> Jonathan,
> I used to think in the same line until reading Rick Durden's
>article which someone cited earlier in this thread:
>
>http://www.avweb.com/news/columns/189307-1.html
>
>"Some Blunt Talk About Aviation Insurance (or, What You Don't Know
>About Sublimits Can Hurt You)

What he says should be pretty well known as it's nothing new. Yet a
lot of pilots do not know those things.

>...........
>
>Some years ago I worked a case involving a pilot who had a million
>dollar policy with $100,000 sublimits. It appeared he was doing
>something that might be considered less than safe while carrying one
>passenger. He crashed and was killed instantly. The passenger survived

Despite the talk and indignation on here, sooner or later nearly every
pilot does something foolish, but they a PPL or ATP and I'd call
showing up at the cockpit still under the influence as being pretty
foolish. Or the time a 732 flew right through our airport area just
100 to 200 feet above the pattern altitude.

>for a period of time, in hideous pain, before dying. The passenger's
>estate sued the pilot's estate. The pilot's insurance company put up
>the $100,000 sublimit; however, it was nowhere near enough to pay what
>was being demanded by the estate of the deceased passenger. Yes, the

It may sound cold, but that's life. In many cases the pilot of a
small plane can not afford those limits and their estate can not
afford to go with out. You make a choice. In this case the best
choice is "His and Her" trusts. They can go after your trust, but not
hers, or at least not easily. OTOH it does depend on how and when
those trusts are set up and how they are funded.

Roger Halstead (K8RI & ARRL life member)
(N833R, S# CD-2 Worlds oldest Debonair)
www.rogerhalstead.com
>estate of the pilot got hit. The widow and children suffered
>financially. Now, one of the widow's memories of her husband is that he
>was too cheap to buy adequate insurance and it hurt her and the kids.
>
>Yes, the $100,000 sublimit policy (as well as the smooth policy) does
>pay for your attorney fees if you are sued. The costs of your defense
>do not come out of the $100,000 (or $1 million) pool of money that is
>available to pay a person making a claim against you. If you have few
>assets beyond your airplane, a $100,000 sublimit policy is likely to be
>enough; the injured person will probably take it and go away. However,
>by the time you get up to ownership of a Cessna 182 or Cherokee Dakota,
>the chances are pretty good that you have assets beyond that airplane;
>otherwise you could not have afforded it in the first place. So, to
>protect yourself, take a hard look at buying a "smooth" policy, with $1
>million completely available, because the chances are that if you screw
>up and hurt someone, it won't be a lot of people and each one will have
>damages of more than $100,000. You've spent a lot on your airplane --
>don't go cheap in protecting yourself and your family.
>
>Sadly, in my experience, a majority of pilots who buy insurance don't
>know what a sublimits policy is or what the ramifications are; only
>that they are cheaper to buy than a smooth policy.
>
>As I heard recently, cheap is never good and good is never cheap. "
>
> This year, it cost us ~ 1/3 more to get a smooth policy. I consider
>the extra $500 is a reasonable price to pay so that we can continue to
>enjoy sharing our love of aviation with relatives, friends,
>acquaintances and even complete strangers while having some degrees of
>protection to our assets. We do everything possible to fly safe but
>accidents can happen even to the very experienced and very careful
>pilots, IMHO, $100K per passenger is extremely inadequate to pay for
>medical cost and compensation for death or serious injuries.
>
>Hai Longworth

[Jonathan Goodish]

In article >,
Roger > wrote:
> And for the typical pilot who reads this group, try to find a company
> that will write you a smooth $1MM (Million is two Ms in the financial
> industry. Why I don't know)

You can find underwriters who will write the policies, but not all of
them will. Not sure what minimum pilot requirements may be necessary
for a $1M smooth policy.

"MM" is most often used in the financial industry, but "M" is also an
acceptable abbreviation for "million."


> Despite the talk and indignation on here, sooner or later nearly every
> pilot does something foolish, but they a PPL or ATP and I'd call

Speak for yourself. While I've certainly made mistakes and had lapses
in judgment, I wouldn't classify anything I've done as "foolish."
History shows that momentary mistakes and lapses in judgment by
conscientious pilots usually don't kill or hurt people. It is gross
negligence or a pattern of missteps that does folks in. Maintaining a
safe and enduring flying career requires studious risk management.
Anything can happen, but if someone is taking risks that make him so
concerned about litigation, perhaps he should clean up his act or choose
a hobby with risks that he deems more manageable.

The bottom line is that a good insurance policy is no substitute for
good judgment and skill, and it won't keep you out of trouble if you do
something foolish. I'm not sure how much a "smooth" policy of any value
would comfort you if you were responsible for an accident in which
someone was injured or killed due to your lack of judgment or
proficiency.




JKG

[Michele Howard]

The insurance company is still obligated to defend you even if they agree to
pay out their policy limit. So usually what happens is the insurance
company offers up their policy limit (usually $100,000 per passenger) in
exchange for the plaintif accepting that as the total liability of the
insured, thus letting the insured off the hook for further damages. Most
people take the $100,000 and walk away unless the insured is seriously
loaded.

It is rare for a plaintif to refuse to settle for the $100,000. Usually
it's more lucrative to take the $100,000 then turn around and sue every
repair shop that ever touched your aircraft. I know of once case where the
family of the victim of a small plane crash received $100,000 from the
aircraft owner's policy and $100,000 each from two separate repair shops
that had done annuals and/or light maintenance on the aircraft prior to the
accident.
"M" > wrote in message
ups.com...
>
> If you never carry passengers other than your immediate family members,
> then the 1M smooth policy is a genuine waste of money.
>
> However if you do even occasionally carry passengers, you should
> seriously consider 1M smooth policy. Almost all the plane owners have
> at least several hundred thousands worth of personal assets. In a
> crash that results in personal injury the $100k submit can't even begin
> to pay for anything, and the insurance company will likely wash its
> hands and pay out that $100k w/o spending much on a good attorney for
> your defense. The 1M liability will cause the insurance company to
> take the case seriously and spend money on a really good attorney.
>
> --M
>
> Jonathan Goodish wrote:
>>
>> Personally, I don't think that a $1M smooth policy really buys you much
>> additional risk protection over the per-seat sub-limits. In my case it
>> makes even less sense, as I rarely ever carry passengers, other than my
>> wife.
>>
>> Note also that some policies specify PER SEAT sub-limits, and other
>> policies specify PER PERSON sub-limits. The former places compensation
>> limits on the passengers, while the latter places compensation limits on
>> everyone, including people on the ground.
>>
>> I suspect that if you routinely carry passengers, and have substantial
>> assets, a higher-value "smooth" policy might make more sense. In my
>> opinion, the $1M smooth is little more than a "feel good" policy for
>> most people.
>>
>>
>>
>> JKG
>

[Newps]

Robert M. Gary wrote:

>
> People on the ground are not subject to the sublimit, just passengers.

As long as the sublimit is per passenger. Some policies are per person
and that does limit those on the ground.