Flying Without Insurance?

[PMcClure]

On average, insurers come out ahead. That is the nature of their business. We pay a little to mitigate substantial risks, they make a lot by taking a little from many. The decision to buy hull insurance matters on your financial situation and the % of the plane relative to your total assists. If you have a $75k plane and have $5mm in assets, then maybe. But if your plane is your only substantial investment outside your home, they you may have a different view.

 

Look at term life insurance. $1mm policy for a middle aged healthy pilots might cost about $1000/yr for 10 or 20 years. You pay $20,000 over 20 years and if you don't die, it was a waste. But if you do die, the quick liquidity to pay off your home mortgage and finance your kids college and needs is invaluable. The insurance company is betting you don't die and basing it on statistics. You hope you don't die but are mitigating the risk to your family if you do. 

 

For hull insurance its the same way.  If you have a $200,000 airplane that you plan on keeping 5 years with a total premium of  $2000 a year total insurance, about which half is hull insurance (?), You are paying $5,000 to cover a $200,000 bet. Not too bad a deal in my opinion. My first plane was an F model worth about $50k. Hull insurance was about $500 a year or less. I was in it for 3 years. $1500 to cover $50k in assets? Still not bad. And everything else rides on, passenger coverage, liability coverage, assistance in a gear up or prop strike. Not such a bad deal in my opinion.

 

A warning to others, I also have a umbrella policy, both as a rider on my home owners and business policy. They do not cover liability from aviation activity. I learned this just a few weeks ago after flying for 7 years thinking I had extra coverage. Just a caution to make sure you understand your coverages and limitations. 

[marks]

Actually, I do not have liability insurance for passengers and except for my own family I do not fly with passengers.  I do think most everyone else who takes passengers in underinsured.  I gave the example of two people injured so badly (at Falmouth Airpark) that they could not be interviewed about the accident when the instructor was killed and after the injuries they were both badly burned.  I wonder how much insurance would be needed to compensate the couple for lifetime medical care, loss of income, pain, suffering and disfigurement.  Just because I don't buy hull insurance doesn't mean I am exposed as much as pilot/owners who fly with a couple of passengers.  BTW, after my 2004 accident with a fire on board, hard IFR and no vacuum, my flying days were over in the Beech Sierra and I bought the J because it would glide so much farther if need be.

[Smiles201]

A little off topic....I agree completely with the premise of self insurance. One of the best ways to save money is with long term care insurance. Depending on your situation, most will benefit from setting aside enough for two years of care, the average time needed. The bigger risk for most is living so long that you run out of money.

[rocketman]

Would an umbrella policy cover an airplane accident (or car) if you no insurance in the first place on that vehicle?

[Marauder]

Would an umbrella policy cover an airplane accident (or car) if you no insurance in the first place on that vehicle?

That is a great question. I have an umbrella but also auto/home riding below that. One thing I do know... Read the fine print. Most insurances go beyond the "Act of God" disclaimers and have one about private airplane usage, (flying commercially is covered). But if I want to get on a Ducatti, I'm covered... Sent from my iPad using Tapatalk

[N601RX]

My umbrella required me to take the higher limits on all my vehicles and homeowners policy.  My umbrella then picks up where the vehicle and homeowners insurance leaves off and fills in any cracks and loopholes of the regular insurance. My agent told me this is why Umbrella policies are cheap.  Most normal events are covered by your other policies and only occasionally will a umbrella policy have to pay out and when it does the payout cost is covered by all the other umbrella policies that will never have a payout.

[Parker_Woodruff]

Would an umbrella policy cover an airplane accident (or car) if you no insurance in the first place on that vehicle?

Generally not. Some umbrella policies also exclude aviation, no matter how much coverage the primary aviation policy has.

[fantom]

Generally not.

 

Does Falcon really have an 'over-and-above' MAPA discount, Parker? If so, I should get it for about 15 years in arrears. Please let Cliff know my insurance this year is free.

 

BTW, the WX here has been rain, wind and cold (by FL standards) since you left. Did you get over 2,500 ft on the way back to TX?

[Bob_Belville]

It's been a long time since I talked to my insurance agent but my recollection is that umbrella policies pretty much assume specific policies "under the umbrella" and are never the primary coverage. BICBM

[Parker_Woodruff]

Does Falcon really have an 'over-and-above' MAPA discount, Parker? If so, I should get it for about 15 years in arrears. Please let Cliff know my insurance this year is free.

BTW, the WX here has been rain, wind and cold (by FL standards) since you left. Did you get over 2,500 ft on the way back to TX?

4500 feet with bright blue skies the whole way.

Today it's OVC003 with 1SM vis