"Roger Halstead" wrote in message
...
I think George was being a bit facetious with the lawn mower and
$1000, but it wouldn't take a lot of structural damage to reach half
the value of the hull. That means if your plane is worth 300,000,
you insure it for $150,000 and the damage is close to that, they can
total the plane, give you a check for $150,000, repair the plane and
sell it for $300,000. Pretty good profit for them and loss for you.

As to your example of not filing a claim until the cost exceeded half
the value, it would only guarantee the insurance company would total
it out and you'd be out half the value of the plane.

Never be under insured. It's as bad, or even worst than over insured
which is just wasted money. Under insured can be downright expensive.

You misunderstand the original posters intent. He/She said that decreasing
the hull value is a way of raising the deductible. So in your example, by
cutting the hull value in half on a $300,000 plane they had decided on a
$150,000 deductible. So in the pay-off you describe they got what they paid
for, a $150,000 deductible and a $150,000 payout. You may not think that's a
good idea, but to each their own set of choices.

Under-insured is just changing the cost of the risk, it's a perfectly
legitimate tactic, if you understand what you're doing. Yes, if you just do
it to lower the premium you're a bit dense, but if you understand the
trade-off then there's no problem.

Mat


--
Matthew Waugh
Comm. SEL MEL, CFI-AI
http://home.nc.rr.com/mwaugh/learn2fly/index.htm