insurance: vote with your $

How many of you would dare to own a new a/c without having a full hull
value coverage?

After being hit with a $15K premium with a $10K deductable, I have
decided to vote with my hard earned cash against the outrage and to only
get the mandatory liability and not-in-motion. After all, my personal
experience with car insurance is that money-wise, it does not make sense
over any 10yr period.

If we get out of mentality 'everybody does it, so should I', maybe the
insurance industry will wake up (again) to a sharp drop in revenue and
stop the rip-off. In the meanwhile many of us would save some money.
Comments?

The insurance industry is not making a lot of money even at the new higher
rates, so don't expect them to decline soon. Personally I only carry
liability because I think that the hull coverage I have been offered is not
a good deal. Insurance pricing is a combination of premiums and how much
money the insurance company can make by investing those premiums before
there is a claim. Obviously the expected rate of return on those
investments is much lower than it was three years ago.

What plane are you trying to insure and what are your pilot qualifications?

Mike
MU-2


"misha" wrote in message
...
How many of you would dare to own a new a/c without having a full hull
value coverage?

After being hit with a $15K premium with a $10K deductable, I have
decided to vote with my hard earned cash against the outrage and to only
get the mandatory liability and not-in-motion. After all, my personal
experience with car insurance is that money-wise, it does not make sense
over any 10yr period.

If we get out of mentality 'everybody does it, so should I', maybe the
insurance industry will wake up (again) to a sharp drop in revenue and
stop the rip-off. In the meanwhile many of us would save some money.
Comments?

On 10-Jul-2003, "Mike Rapoport" wrote:

Obviously the expected rate of return on those
investments is much lower than it was three years ago.


I think you have identified the primary reason why premiums have been going
up recently. Certainly claims costs have not risen as fast. On the other
hand, in my case aircraft hull and liability insurance price is still
roughly comparable to auto insurance. For $85 hull (zero deductible) and
$1M smooth coverage on our Arrow IV we pay around $2200/year. For a car
worth about $18K, and adding a reasonable portion of the cost of $1M
umbrella liability insurance, I pay about $1100/year ($500 deductible). The
key is that all named pilots of the plane have at least several hundred
hours and, very significantly, all are instrument rated.

I was recently told by an insurance broker that for a typical aircraft
owner, the cost of getting an instrument rating (in your own plane) will be
returned in less than 3 years by reduced insurance premiums. Has anybody
seen their premiums go down after getting their IFR rating?

-Elliott Drucker

wrote in message
...

On 10-Jul-2003, "Mike Rapoport" wrote:

Obviously the expected rate of return on those
investments is much lower than it was three years ago.


I think you have identified the primary reason why premiums have been
going
up recently. Certainly claims costs have not risen as fast. On the other
hand, in my case aircraft hull and liability insurance price is still
roughly comparable to auto insurance. For $85 hull (zero deductible) and
$1M smooth coverage on our Arrow IV we pay around $2200/year. For a car
worth about $18K, and adding a reasonable portion of the cost of $1M
umbrella liability insurance, I pay about $1100/year ($500 deductible).
The
key is that all named pilots of the plane have at least several hundred
hours and, very significantly, all are instrument rated.

I was recently told by an insurance broker that for a typical aircraft
owner, the cost of getting an instrument rating (in your own plane) will
be
returned in less than 3 years by reduced insurance premiums. Has anybody
seen their premiums go down after getting their IFR rating?

-Elliott Drucker

To return the cost if an instrument rating in 3 years the insurance company
would have to pay me about $1,000 a year. Not going to happen.

On 11-Jul-2003, "Dave Stadt" wrote:

To return the cost if an instrument rating in 3 years the insurance
company
would have to pay me about $1,000 a year. Not going to happen.


Well, I do know that when my partners got their IR (both in the same year)
the tab for insurance the following year went down by about $800. And this
was a few years ago, before the current craziness in the insurance biz.

The cost of getting the rating IN ONE'S OWN AIRPLANE may be a bit more than
$2400, but not that much more. I figure on around 45 hours of training, of
which 35 involves the use of a paid instructor. (The other 10 being
practice with a licensed safety pilot who is not being paid).

45 hours @ $40/hr marginal cost for airplane* = $1800
35 hours @ $40/hr for instructor = 1400

TOTAL = $3200

*Marginal cost is the cost for "additional" hours of use, and thus does not
include any fixed expenses. Basically, it's the hourly cost of fuel and
oil, plus reserve for overhaul. $40 is what I figure is about right for a
C-172 or similar airplane.

This suggests that a few years ago the payback in reduced insurance premiums
was around 4 years. In the current insurance situation, it is therefore
quite believable that payback could be quicker.

It also suggests that if you are not instrument rated you might ask your
broker how much you could save if you were. (Note that significant savings
will often require changing insurance carriers.) That just might provide
the impetus for you to finally get to work on your instrument ticket.

wrote:

This suggests that a few years ago the payback in reduced insurance premiums
was around 4 years. In the current insurance situation, it is therefore
quite believable that payback could be quicker.

What current situation? The insurance on my 182 keeps getting cheaper.
I called my broker and asked him what the difference was between an
instrument and non instrument rated pilot with my 900 hours in my plane.
No difference. Not only did the premium go down $170 this year, I
changed from USAIG to Global, they rasied the hull value from $65K to
$70K without me asking them to do it. My insurance has gone down in
each of the six years I have insured it for. If this insurance
situation gets much worse I may have to buy another plane.

wrote in message
...

On 11-Jul-2003, "Dave Stadt" wrote:

To return the cost if an instrument rating in 3 years the insurance
company
would have to pay me about $1,000 a year. Not going to happen.


Well, I do know that when my partners got their IR (both in the same year)
the tab for insurance the following year went down by about $800. And
this
was a few years ago, before the current craziness in the insurance biz.

The cost of getting the rating IN ONE'S OWN AIRPLANE may be a bit more
than
$2400, but not that much more. I figure on around 45 hours of training,
of
which 35 involves the use of a paid instructor. (The other 10 being
practice with a licensed safety pilot who is not being paid).

45 hours @ $40/hr marginal cost for airplane* = $1800
35 hours @ $40/hr for instructor = 1400

TOTAL = $3200

*Marginal cost is the cost for "additional" hours of use, and thus does
not
include any fixed expenses. Basically, it's the hourly cost of fuel and
oil, plus reserve for overhaul. $40 is what I figure is about right for a
C-172 or similar airplane.

This suggests that a few years ago the payback in reduced insurance
premiums
was around 4 years. In the current insurance situation, it is therefore
quite believable that payback could be quicker.

It also suggests that if you are not instrument rated you might ask your
broker how much you could save if you were. (Note that significant
savings
will often require changing insurance carriers.) That just might provide
the impetus for you to finally get to work on your instrument ticket.

You make a few wrong assumptions. First, not all planes are capable of
being instrument trainers. I myself would not want an IFR capable airplane.
Second, you mention some craziness and insurance situation alluding to
increasing premiums. My premiums have not gone up in years. For my
airplane and the flying I do an instrument rating would be less than
useless. I don't believe an instrument rating is guaranteed to lower
premiums no matter how many times you change carriers.

"misha" wrote in message ...
How many of you would dare to own a new a/c without having a full hull
value coverage?

I hope the discussion is coverage vs. not coverage, and not full value versus
not full value. If you're going to insure it, not insuring it for the full value is a
bad idea.


After being hit with a $15K premium with a $10K deductable

On what value hull or what value aircraft? I'm only paying $1500 and have no
deductable.

After all, my personal
experience with car insurance is that money-wise, it does not make sense
over any 10yr period.

If you're talking collision, I might be inclined to agree. The question is can
you afford the loss. On cars it's common for many to drop the collision (hull)
coverage once the value of the car drops (and the loan is paid off).

If we get out of mentality 'everybody does it, so should I', maybe the
insurance industry will wake up (again) to a sharp drop in revenue and
stop the rip-off. In the meanwhile many of us would save some money.

We saw a steep jump in our premium last year but it dropped back down to
what it's been all the prior years this year.

I hope the discussion is coverage vs. not coverage, and not full value versus
not full value.

Right.

On what value hull or what value aircraft? I'm only paying $1500 and have no
deductable.

See prev. post.

If you're talking collision, I might be inclined to agree. The question is can
you afford the loss.

I though that chances of survival are pretty slim in a total loss event
in flight - I hope to make it to Eden and not to be too worried about
the money part. Hull insurance on the ground (not in motion) is cheap,
and we're not talking about it.

"misha" wrote in message ...

If you're talking collision, I might be inclined to agree. The question is can
you afford the loss.

I though that chances of survival are pretty slim in a total loss event
in flight - I hope to make it to Eden and not to be too worried about
the money part.

You can do a lot of damage to the aircraft and still survive. If you have a loan
secured by the aircraft, they will almost certianly want insurance to protect
their interests by the way.