Flying Without Insurance?

[Mooneymite]

  On 12/29/2013 at 6:36 PM, ALP said:

He carries liability insurance to protect others he may harm, but chooses to not physically cover his asset (plane). .

Whew!

I guess the thread title fooled me.

Thanks!

[Mooneymite]

  On 12/29/2013 at 4:35 PM, marks said:

Remember, I have an umbrella policy that would cover me if I smashed into someone's house and/or hurt someone on the ground. 

When I inquired about my umbrella policy covering my airplanes, I was told aircraft were specifically excluded. Perhaps I need to look further?

[marks]

An umbrella policy that covers only damage you do to other persons or property (but not other airplanes or aviation related property) and does not cover passengers, isn't difficult to buy if the airplane is owned by your company.  I try to always get the best bang for the buck.  Why else would I own a Mooney? 

[Danb]

I just do not understand that insurance is a 'loss' even if we are lucky enough to never use it, a better term is a 'cost', which provide a benefit, which insurance does. It is up to the consumer to ascertain if there is a benefit to the cost whichever that may be, like vitamins eg. Therefore insurance is a cost (price of risk) many of my clients assume the risk by self insuring which Marks does in this instance.in this instance he determined in his instance the cost-benefit equation leashed towards to self insurance, at least we have something to do on a rainy Sunday after church

[marks]

Insurance always benefits someone.  When I sell insurance I sleep well at night.

[scottfromiowa]

O.K. The correct title is "Anyone else flying without HULL insurance"? Got it. Insurance is a contract. It is a service. It is there if you need it (under the provisions of the policy). I have no problem with others taking the risk...What me worry?

I DO have a problem with people living in a 100 or 500 year flood plain and then coming to government for a bail out WITHOUT getting any flood insurance...

I DO have a problem with people NOT getting health insurance and society coming to "HELP" when they become ill...

It is NOT a loss (paying for an insurnce policy). It is a risk management strategy.

Looking back at 30 years f marriage I wish to hell I would NOT have purchased health insurance. I wish I had paid out of pocket...but not knowing and doing it again I would do the same...

[BorealOne]

I've made the same choice in the past re: hull insurance on my floatplane--hull insurance for such aircraft is off the charts, given the risks of operating 'off road'. The loss of a plane would be a big hit, but its a risk that can be managed. 

 

Passenger liability insurance is something else entirely. If I didn't have it, I wouldn't take passengers, period. There's just too much risk to effectively self-insure, even in Canada where jury awards and private medical costs aren't factors that we have to consider. 

[DonMuncy]

All insurance is a money losing proposition. Otherwise the insurance companies would not make a profit. BUT, in some cases it is an absolute necessity. I look at it in the light of what I can afford to cover without ruining myself. I won't insure a $5000 item, as I can pay for the loss without too much more that being extremely upset. However, If I total a $100,000 plane, I would consider that a major calamity. If I was Donald Trump, I would probably not buy insurance on items under a million.  

[Bob_Belville]

While I can afford to self insure my old cars for collision, that's a very small portion of auto insurance. 

 

As for hull insurance, having $100,000 hull on my Mooney with my recent prop strike is going to pay for about 20 years of premiums. I'll be 90.

[flyboy0681]

The only time luck was on my side regarding carrying insurance was when my wife was dx with cancer and we had coverage in place. About six months before the diagnosis we were faced with buying an individual policy or going without (COBRA had just run out). In those six months we paid premiums totalling $15k. While certainly a lot of money, I was relieved that our out-of-pocket was only $2,500 for bills that totalled $140k.

 

You can run naked or buy insurance. 

[gregwatts]

Good luck! If your insurance is $2500 per year, you must be a low time pilot. You are obviously paying an insurance premium for you umbrella policy.....I hope you never hurt anybody else with that airplane......they might just end up owning your company!

[marks]

Greg, I don't know where you figured I was a low time pilot or that I'd pay $2,500.  I thought that since 1984 I might have saved $60,000, but maybe that's too much. I thought it might cost about $2,100 per year for hull insurance and I suspect that buying all-inclusive liability insurance that covers passengers of the airplane would be far more expensive than the route I took.  I now have over 4,000 hours and with my old daily commute I have accumulated over 10,000 landings.  I live on an island with no bridge and I commuted off-island to Cape Cod for 15 yrs and to Norwood (near Boston) for eleven years before that.  The J is my third airplane.  Of course I pay for a truly combined liability policy for my business that covers all sorts of liabilities including an enhanced liability policy, but I think buying a million smooth of aviation insurance is an expensive way to go. - My wife figures that if I crack up the plane and lose it (and don't buy another) that we'll save money by me not spending on the bird.  I ceainly hope I never hurt anyone and I hope the same for you.  

[aaronk25]

Mark,

Thanks for posting this thread. It's something different and there is some educational merit and entertainment value as well.

People overreacting and under reacting keeps it interesting.

Surprised Mike hasn't started a poll.

[jetdriven]

I came out ahead on our plane the 3rd monh we owned it. Hull premiums are a grand a year but that light, and I mean ailerons, elevators, and one flap hail claim amounted to 35k. So that pays my hull insurance for a long time. A buddy of mine has an E model and chose to run without hull insurance. The 5th year of this he missed the turn into the fuel pump at night and had a prop strike. 35 grand later it's fixed. He ate all of it.

And speaking of sickness my IAs wife got bone cancer at age 42. The first hospital visit was a quarter million. The rest totaled to around a smooth million and the life insurance paid him very well also. Of course he would like to have his wife but he's 67 now and he said insirance companies won't ever be even wih him.

I do carry only liability on cars under 8 grand and have a 2k deductible. Those are expenses I can absorb.

[marks]

One reason I like going light on insurance is that it helps me avoid super-strong gusty crosswinds and other risks because I don't want a prop strike or some other problem that might be costly.  In that way, going light on insurance may make me a safer pilot.  On the other hand, when it comes to health insurance, I think going light with high co-pays and expensive fees for medication can encourage people to avoid quality medical care and in the end cost them their health or even their life. It's a shame to face financial ruin and a very sick loved one all at the same time. -  When I read the insurance stories in the MAPA Log my blood begins to boil when the author goes through all the technicalities that can be used against the pilot to deny a claim or to explain how you might misunderstand how you're not covered. -  Nothing makes me happier than to read stories of other pilots who came out ahead on their insurance.  It always seems to me that insurance companies hate to pay no matter how long you pay in, and when it comes time to collect on a totalled car it seems that the payout is always far less than you think it will be.  But maybe I'm being unfair to those generous insurance companies out there.  

[phecksel]

  On 12/29/2013 at 4:20 PM, Hank said:

Or taxi a wingtip into an airport sign, building or composite aircraft (think Cirrus)? Or set it down somewhere like a golf course or subdivision without having an insured A&P ready to take the blame? What if your off-airport landing stops in someone's house, because you ran out of fuel, the vacuum pump died, you just blew the approach or the engine crapped out from a spalled camshaft?

Goodbye airplane, goodbye house, hello garnished wages. This is if no one on the ground is seriously injured; in that case, all bets are off!

Friend of mine lost his plane to a guy that hand propped his plane on the other side of the field... plane started the high speed taxi run across the field and prop took several large chunks out of the fuselage destroying his glassair.  Guy had no insurance and everything he owned was locked up in trusts, and he only had social security income.  Totally uncollectable.  Luckily his insurance paid out.

[marks]

Wow!!  I love that story.  Good for your friend - and here I am taking that risk.  I must admit, if someone hand props his plane and it runs through my rented hangar or if I'm taxiing and his plane hits me, I'm screwed.  All I would have is my deduction for uninsured losses and my saved premiums.  Your friend was certainly lucky.   

[jetdriven]

  On 12/30/2013 at 2:31 AM, marks said:

One reason I like going light on insurance is that it helps me avoid super-strong gusty crosswinds and other risks because I don't want a prop strike or some other problem that might be costly. In that way, going light on insurance may make me a safer pilot. On the other hand, when it comes to health insurance, I think going light with high co-pays and expensive fees for medication can encourage people to avoid quality medical care and in the end cost them their health or even their life. It's a shame to face financial ruin and a very sick loved one all at the same time. - When I read the insurance stories in the MAPA Log my blood begins to boil when the author goes through all the technicalities that can be used against the pilot to deny a claim or to explain how you might misunderstand how you're not covered. - Nothing makes me happier than to read stories of other pilots who came out ahead on their insurance. It always seems to me that insurance companies hate to pay no matter how long you pay in, and when it comes time to collect on a totalled car it seems that the payout is always far less than you think it will be. But maybe I'm being unfair to those generous insurance companies out there.

Aviation insurance is different. This board is full of, for lack of a better word, dumb mistakes which the insurer paid easily. Pilots running off the sides or ends of runways, gear collapses. Running out of gas and crashing into a field. it goes on and on. Heck, we had a large claim from hail, and we didnt even see the damage until we found out from the hailstorm from another MS member. We checked ours and sure enough, the ailerons, elevators, and one flap had the lightest damage you could see. But it was there. Airworthy and all, but a valuation adjustment, we wanted it repaired. Finally I got enough nerve to lay the estimate on them, and they paid it within 3 days. We also had a 25K auto claim and it took a month to finally wrangle them up to the cost to replace the car. Every argument in the book. But the airplane guys paid up like it wasnt a deal at all.

This happened to 8 or 10 airplanes last July in OKC for the MAPA clinic. Thats 300K easily.

You dent a spinner like my friend had from the hurricane on his Comanche 260C, that was 40 grand. Push the airplane into the hangar door after flying it, 20 grand. the elevators list for 7 grand each, the ailerons are 3500$ each as well. It doesnt take anything at all to amount to a huge repair bill. One guy taxied into his parked car and it totalled his M20J. Dents on the wing and a pprop strike. Another MS member had a 172, not chocked, roll into his 252, and it was 30 grand and that was one wing skin and a bent stringer and bent rib. It was still ferriable. A simple easy gear up will almost certainly total a M20C, and maybe newer ones than that. Insurance on our plane is 2300$ and I think its above market rate, but if you do the math, its still a good deal.

[jetdriven]

  On 12/30/2013 at 2:31 AM, marks said:

One reason I like going light on insurance is that it helps me avoid super-strong gusty crosswinds and other risks because I don't want a prop strike or some other problem that might be costly.  In that way, going light on insurance may make me a safer pilot.  On the other hand, when it comes to health insurance, I think going light with high co-pays and expensive fees for medication can encourage people to avoid quality medical care and in the end cost them their health or even their life. It's a shame to face financial ruin and a very sick loved one all at the same time. -  When I read the insurance stories in the MAPA Log my blood begins to boil when the author goes through all the technicalities that can be used against the pilot to deny a claim or to explain how you might misunderstand how you're not covered. -  Nothing makes me happier than to read stories of other pilots who came out ahead on their insurance.  It always seems to me that insurance companies hate to pay no matter how long you pay in, and when it comes time to collect on a totalled car it seems that the payout is always far less than you think it will be.  But maybe I'm being unfair to those generous insurance companies out there.  

 

I take the opposite. Ours is insured for value, and it gives me peace of mind to fly. I dont have to worry if the engine quits, I am going to land it in the best option, but I walk away and buy a better plane. For the gusty crosswinds and short fields, there is training and proficiency.  the best insurance you can buy.

[Parker_Woodruff]

Aviation insurance is the most cut and dry type of property & casualty insurance out there.

Today's aviation insurance rates are incredibly cheap, and I'd argue unsustainable in the long term. That might explain one or two aviation insurers leaving the market the past year or so.

[marks]

I suppose that at least half of my savings comes from the fact that my liability insurance does not cover passengers in the plane, nor damage to other planes.  I'd have to crash into a house or hit someone on a golf course to be covered.  I don't think for one minute that any of you are foolish for buying aviation insurance.  In my business I've seen many business people take all sorts of terrible risk.  I've seen guys buy businesses with huge amounts of borrowed money even though they know little about the business.  Sometimes it works, sometimes they go bust, and yet these same people will buy a car on time and pay the insurance company to protect the bank.  They'll buy a large screen TV and get the extended warrantee, they'll rent a car and buy the collision damage waiver even though their credit card covers them,  They'll even buy insurance at the post office for a box they're mailing.  I appreciate everyone's insight.  I totally agree that aviation insurance pays for many dumb claims and I hate to jump into that insurance pool, but if I'm ahead of the game now, perhaps now is the time to reconsider.

[marks]

BTW, I think we should all agree that there are many risks that shouldn't be taken and flight conditions that shouldn't be attempted.  Excellent training and proficency should stress this fact.  The old U-turn is often the best strategy.  Over-confidence can kill.  It's surely true that many mistakes are dumb. - Back in Aug. 2008 a pilot with a commercial pilot certificate with ratings for single and multi-engine aircraft with an instrument rating was acting as a pilot for Angel Flight and carried two passengers on a flight to Boston Logan.  It was instrument conditions and the pilot was corrected by ATC a few times during the instrument approach before he lost control and crashed in a parking lot.  All three were killed.  It turned out that the pilot was not IFR current.  I have wondered if the insurance company paid the claim as he made a very dumb mistake.  What a responsibility and risk he took!  -  Part of my plan has been to avoid insurance, but part of my plan has been to avoid excess risk too.  

[aviatoreb]

  On 12/29/2013 at 8:38 PM, DonMuncy said:

All insurance is a money losing proposition. Otherwise the insurance companies would not make a profit. BUT, in some cases it is an absolute necessity. I look at it in the light of what I can afford to cover without ruining myself. I won't insure a $5000 item, as I can pay for the loss without too much more that being extremely upset. However, If I total a $100,000 plane, I would consider that a major calamity. If I was Donald Trump, I would probably not buy insurance on items under a million.  

 

And the extreme end of this.  I laugh when I am at Radio Shack and as I check out they ask if I want to insure the item I am buying for a extra fee against product defects....will I pay $1.25 to insure a USB drive I am buying for $8 will be free of product defects for 2 years?  Ummmm.... no thanks.  I think I will live free and wild without insurance and take the wild risk that the USB drive will work for the next two years.  Heck I would loose the $1.25 insurance policy before I loose the USB drive both before 2 years.

[aviatoreb]

  On 12/30/2013 at 7:43 AM, Parker_Woodruff said:

Aviation insurance is the most cut and dry type of property & casualty insurance out there.

Today's aviation insurance rates are incredibly cheap, and I'd argue unsustainable in the long term. That might explain one or two aviation insurers leaving the market the past year or so.

 

If they are not charging what they need to charge to stay in business then why don't they?

[AndyFromCB]

  On 12/30/2013 at 1:29 PM, aviatoreb said:

And the extreme end of this.  I laugh when I am at Radio Shack and as I check out they ask if I want to insure the item I am buying for a extra fee against product defects....will I pay $1.25 to insure a USB drive I am buying for $8 will be free of product defects for 2 years?  Ummmm.... no thanks.  I think I will live free and wild without insurance and take the wild risk that the USB drive will work for the next two years.  Heck I would loose the $1.25 insurance policy before I loose the USB drive both before 2 years.

 

It's not insurance, it's a warranty ;-) I don't think RadioShack employees have P&C licenses. I wish the department of insurance would clamp down on this crap.

 

Just like Byron, I had a hail claim that I never noticed until 3 months later, after switching insurance companies and my old company and new company worked together to determine where it happen and which one would pay. The old one, Global, paid without any issue once it was determined it happend on their watch. Issued a check directly to me. 

 

Second of all, aircraft liability insurance is a pretty low price to pay for peace of mind and financial responsibility.