Sport Pilot Talk

Got my renewal in today. I am under AOPA/Assured Partners as an agent for AIG Aerospace.

Renter's Policy:
$500,000/$100,000 Liability
$80,000 Hull
$5,000 Deductible

$817.00/year

Not horrible, I hold just a private certificate and I'm working on the instrument rating. I rate shopped AVEMCO, which was $100.00 higher per year. Overall my rate would have gone up by 10%, but I dropped the hull back. I am in an interesting position: the FBO I rent from is also a vendor of my company, so I can see their insurance policy and what they have their aircraft insured for and their coverage. I just matched their hull coverage amount and figured if that's what they think the planes are worth, I'm not going to argue.

I really don't think you need to match the amount of their hull value. Renters insurance and what the FBO is trying to cover are two entirely different things. They need to protect the value of the aircraft, their's or the banks investment. You are trying to protect yourself from the insurance company trying to recoup the loss if they have to pay. As a renter you basically have to cover the cost of repairs if the airplane is not totaled, or the difference between the hull value that the insurance company pays out and the salvage value of the airplane.

The rule of thumb I recommend for my students is to carry renters insurance with a hull limit of half the value of the aircraft. My rationale is that, in the event of a loss, my insurance will cover the whole loss, but may then try subrogation against the renter. If that happens, my insurer will generally be satisfied to get half of their losses covered, so will be uninclined to sue my customers.

I was thinking the same thing, you are overpaying for renters insurance but if you're happy then I'm happy. There are owners paying nearly the same amount you as a renter are paying, does that seem right to anyone? I suggest you read your rental policy that you signed to see what you are liable for. Maybe ask the flight school/FBO (whoever you rent from) or read their policy and see what you are liable for in the way of hull value, their deductible and loss of use. Do they have a "waiver of subrogation" on their policy? It's rare but some do. Do they have a "non-owned aircraft liability endorsement" on their policy? This gives you partial coverage.

Subrogation by the owners insurance company can only occur if you are at fault for the damage to the aircraft. Meaning if it's an "act of god" that damaged the airplane while you rented it then the owners policy will should pay. If it's a mechanical issue that caused the accident then the owner's policy should cover it. Your policy will kick in only if you are negligent for the damage.

But again, if you are happy paying this amount who are we to say otherwise?

Also note, we are talking about insurance companies and they are in the business of NOT PAYING.

Well, another year, and things aren't getting any better. In January 2020, my acft insurance policy renewed at a 24% premium increase. (That was following a 10% increase the previous year.) Reluctantly, I was forced to raise my rental and instructional rates accordingly.

I just received a quote for my upcoming January 2021 renewal, and it's up an additional 15%. With compounding, that comes to a 57% premium increase in three years. I'm going to have to raise my prices again, but this is not sustainable. Insurance is now my largest single expense item. There's a very real possibility that insurance prices will put my flight school out of business.

drseti wrote:Well, another year, and things aren't getting any better. In January 2020, my acft insurance policy renewed at a 24% premium increase. (That was following a 10% increase the previous year.) Reluctantly, I was forced to raise my rental and instructional rates accordingly.

I just received a quote for my upcoming January 2021 renewal, and it's up an additional 15%. With compounding, that comes to a 57% premium increase in three years. I'm going to have to raise my prices again, but this is not sustainable. Insurance is now my largest single expense item. There's a very real possibility that insurance prices will put my flight school out of business.

Rate increases always happen for a reason ...

- increased losses ( large natural disasters, forced by local ordinances to provide insurance at a loss ie... California )
- inflation
- lower than expected return on investments ( very low rates )

Obviously things are not moving in the right direction as far as insurance companies are concerned ( and,frankly, as far as everybody is concerned ) so I don’t expect this trend to reverse anytime soon ...

At this point, I think that ALL of us are paying for the underwriters' losses from the Boeing 737 Max fiasco, as well as the incredible number of storms that caused significant aviation-related losses over the past couple of years. It sucks, but the best we can hope for is that losses will reduce, the insurance industry will recover somewhat, and rates will come down in a few years.

I offer this as just another point of reference on insurance costs...

My sister was an OB-GYN in a rural area of the country, significantly under-served by the medical profession. She was in a partnership with two other doctors. At the time, she was absolutely the only OB in the area that was qualified and skilled enough to perform some of the higher-risk surgeries (in-utero corrections, etc.) and the practice was thriving. But OBs tend to be subject to more lawsuits than other doctors, and the practice's insurance rates began to climb. By the time she'd been in the partnership for 6 years -- without a single judgement rendered against her in court, or even a single out-of-court settlement -- the liability insurance coverage for the OB-GYN part of the practice was costing them $375,000 a year. Yes, you read that correctly.

My sister, who never took home more than $50,000 a year from being an OB-GYN surgeon (with $435,000 in student loan debt upon graduation), was forced to leave the practice of medicine behind because her insurance rates to remain in business were almost 2.5 times the total revenue that she brought into the practice, working 60+ hours a week. The other partners literally paid her to quit practicing so that they could afford to stay in business!

Now several years have passed, and there are exactly zero (0) OB-GYNs practicing in that area of the country. And the insurance rates of those GPs and "Family Medicine" practitioners willing to take OB-GYN type cases are finding their insurance rates skyrocketing as well. There's now only one (1) surgeon willing to take on OB-type cases other than routine cesareans. And you'd better be RICH, because she doesn't take insurance, because the insurance companies won't pay her enough to compensate for the insurance she has to maintain... Can't afford to pay her rates out of your own pocket? You're gonna have to travel at least 200 miles to find another OB surgeon (and hope whatever was requiring the surgery allows you to tolerate the trip...).

Just got a quote for 2021 from Greg Ellsworth.

We are pleased to present the attached quotation of $1,790 from your current carrier. Other quotes came in at $2,015 to $5,624.

I am at 360 hours and still about 15-20 years away from retirement so age is not an issue here ... went up by about $50 ... is that reasonable ?

We just renewed one of our policies and the rate went from $878 to $975. It is for an old taildragger with a declared value of $20,000. In the last year my son almost doubled his total flight time, with a large portion being in make and model. The agent was shocked at the price increase all things considered.

The $50 and $100 premium increases seen by Tom and Warmi are nothing. Some of us with commercial policies are seeing increases in the thousands! Between my two LSAs (one for flight training, the other for my personal use) I'm paying over $10,000 a year.

I know what you mean on the commercial policies. My Piper Warrior went from $4800 to $5800 at the last renewal.

Warmi wrote: ↑Sat May 22, 2021 7:08 am Just got a quote for 2021 from Greg Ellsworth.

We are pleased to present the attached quotation of $1,790 from your current carrier. Other quotes came in at $2,015 to $5,624.

I am at 360 hours and still about 15-20 years away from retirement so age is not an issue here ... went up by about $50 ... is that reasonable ?

Gregg is my agent too. The quote for my current carrier came in at $1720, up almost $500 from last year. He also sent me a quote from Global that was a couple hundred more. Global has no deductibles but it only covers named pilots. Occasionally I let my former instructor borrow my plane. I'm going to find out if I add him to the policy with Global if it will cost more. Gregg told me my current carrier is going to go up to at least $2500 next year. Going to stay with my current carrier for now and then see what things look like next year.

I gotta say that my Microsoft Flight Sim 2020 with its aftermarket controls and such is sure sounding better and better. lol And of course NO ONE has ever said that flying is for the faint of wallet. I keep hoping one day to win the lottery and pursue my aviation passion for real. Until that totally unlikely event happens........

From the original post in 2019:

FastEddieB wrote: ↑Mon Sep 09, 2019 12:05 pm I just got a renewal quote for my Sky Arrow’s insurance. After 12 years without a claim, I had hoped for, if anything, a small reduction in premium.

No such luck - it went from $961 last year to $1,218, a 26% increase. Along with the comment: “We are seeing steep premium increases due to the current market”.

Well, 2 years later its now up to $1,399. It's now 14 years without a claim. When I saw the renewal email I was holding my breath, but with almost everything being up now, I'm kinda relieved its not even more.

chicagorandy wrote: ↑Tue Jul 06, 2021 7:45 am I gotta say that my Microsoft Flight Sim 2020 with its aftermarket controls and such is sure sounding better and better. lol And of course NO ONE has ever said that flying is for the faint of wallet. I keep hoping one day to win the lottery and pursue my aviation passion for real. Until that totally unlikely event happens........

Video games and flight sims are fun but nothing beats flying a real airplane. Also if you are on a serious budget you can fly ultralights which can be very inexpensive.