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Should I increase my stated value?


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I’ve been watching the market, and seeing that C models seem to be in the low 40’s to mid 50’s.  I have mine insured for 51, but looking at the market, I don’t think I could replace mine for anywhere close to that.  

The most recent sale of a C on controller I can see was listed at 52.5.  Old radios, 1980s interior, but really nice paint.  This seems to be the pattern of C models up for sale. 

I came up with 51k on my own, but I have used Jimmy Garrison’s formula and come up with nearly the same number, so I’m confused what to do.

i know if I put my plane up for sale at 51k, it would be gone before the day ends.  

So the question is, if I couldn’t buy a very close replacement at 51k, what do I insure my plane for? I can see adding 25 to 30k to any plane on the market to get it close to mine, but I’m not really sure of the ramifications of me stating my value at 70k+.

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I’ve been watching the market, and seeing that C models seem to be in the low 40’s to mid 50’s.  I have mine insured for 51, but looking at the market, I don’t think I could replace mine for anywhere close to that.  
The most recent sale of a C on controller I can see was listed at 52.5.  Old radios, 1980s interior, but really nice paint.  This seems to be the pattern of C models up for sale. 
I came up with 51k on my own, but I have used Jimmy Garrison’s formula and come up with nearly the same number, so I’m confused what to do.
i know if I put my plane up for sale at 51k, it would be gone before the day ends.  
So the question is, if I couldn’t buy a very close replacement at 51k, what do I insure my plane for? I can see adding 25 to 30k to any plane on the market to get it close to mine, but I’m not really sure of the ramifications of me stating my value at 70k+.


I put the hull value at what I have in it and close to a decent market price. You want to be able to insure with enough hull to avoid having them total it and you get pennies on the dollar of any upgrades you did.


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51 minutes ago, Marauder said:

 


I put the hull value at what I have in it and close to a decent market price. You want to be able to insure with enough hull to avoid having them total it and you get pennies on the dollar of any upgrades you did.


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That’s where I’m at.  A gear up would probably total it right now and that’s not ideal.  But I don’t want to insure it too high where they don’t total it for something I wish they did.

 

 

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I bought my '76 F in December 2017 for AUD$65K. At that time, I insured it for AUD$75K and the premium was AUD$3360.

She was consuming oil at a rate of 1qt/1hr, so I had a top end field overhaul performed and added a vertical card compass and LED landing light. Put 60 hours on her in the year but she was out of action for 6 weeks during the best part of our flying season due to the overhaul and annual.

No incidents/claims for the year. This past December, my premium went down to AUD$2950 and the insured value increased to AUD$85K.  My aircraft is stored outside on hardstand parking at a Class D airport. My deductible was the only thing to change. It went from $500 to $800. I can live with that.

Certainly suggest you call your broker (or insurer directly) to ask about increasing the hull value.

Edited by Sime
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Yes try to increase he hull value if you can.  You may need to change insurers to do that.  Go high and then negotiate with the carrier for the new agreed hull value it helps if you have just done some upgrades like new GPS, paint, interior or something of added value that you can negotiate with.

Anyone buying a plane go as high as reasonable on the hull value up front.  I know this is counter to the CB culture to save a few dollars on the insurance but it is easier to get higher hull value up front than to increase it later.

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Yes try to increase he hull value if you can.  You may need to change insurers to do that.  Go high and then negotiate with the carrier for the new agreed hull value it helps if you have just done some upgrades like new GPS, paint, interior or something of added value that you can negotiate with.
Anyone buying a plane go as high as reasonable on the hull value up front.  I know this is counter to the CB culture to save a few dollars on the insurance but it is easier to get higher hull value up front than to increase it later.


What helps with the negotiations (I didn’t need to negotiate) was to take pictures of what I upgraded with approximate value and asked if I needed to share them. They didn’t need to see them.


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How many hours on your engine? Because the insurance will factor that in when deciding to repair a gear up or to total the airplane. 

I believe an M20C has to be insured at a minimum of $60K to survive a gear up. And if I were in your shoes, I'd try to get it insured for $65K. I did this with my C just by sending the company a list of every single upgrade to the plane. Not just what I'd done, but everything that was an upgrade over a factory stock M20C. They didn't blink at the request.

The thing to remember is that there just aren't many top of the line M20C's available for purchase, and that number goes down every year. So even if your C could be purchased for $51K, you probably can't find one and upgrading a lesser one to your level will cost closer to $70K or more. So in other words, it can't be replaced for the purchase price.

I believe it's less important with newer and more valuable models but nevertheless, I've raised the hull value on my 252 every year at my insurance renewal.

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9 minutes ago, Jim Peace said:

I have an almost mid-time engine and a ton of new avionics and have the hull at 75k on a 64c....I would still be at a loss if they totaled it but at least I am close.  

That hull value would surely keep them from totaling it for a simple gear up. That's a good number on a C.

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We try to insure ours for what we have in it.  But the case could also be made to insure it for what it would cost to replace it.  I can't think of a good reason to insure it for what you think you could get for it on the market.  That would likely be the lowest of those and the insurance company may total it and you've lost money.  Of course, the insurance company might let you buy the hull back and then you could use the insurance money to pay for repairs.  Might have trouble insuring a plane that was totaled though.

Case for what insuring for what we have in it.  Easy.  We get all our money back.  Buy something else and start putting money into it.  It's as if I never owned a plane in the first place and I'm just starting.  Downside is insurance costs more.  A few hundred/year.

Case for what it would cost to replace.  Easy.  We have the money to replace it with something equivalent without needing to do upgrades.  Same as above, insurance costs more.

Case for what I could sell mine for.  Now I'm out the difference between what I get and what it costs me to get back to where I am.  That's money I can never get back.  Might be enough that I can't afford to start over and I no longer get to fly my own plane.

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28 minutes ago, Bob - S50 said:

Now I'm out the difference between what I get and what it costs me to get back to where I am.  That's money I can never get back.  Might be enough that I can't afford to start over and I no longer get to fly my own plane.

true

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Anyone buying a plane go as high as reasonable on the hull value up front.  I know this is counter to the CB culture to save a few dollars on the insurance but it is easier to get higher hull value up front than to increase it later.

I just updated mine for the 3rd time, twice for avionics upgrades and 3rd for engine and prop overhauls. All it took was a phone call.


Tom
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Three reasons not to overvalue your plane for insurance.

1. The insurance carrier  will not go for a GROSSLY evaluated number.

2. Insurance premium goes up some.   

But most important

3. Say you could somehow insure your $100,000 plane for $200,00. If you have an accident which would require $175,000 to repair, the carrier would pay the $175,000 and you wind up with a plane with significant damage history. You may wish you had $125,000 to replace it. 

These are exaggerated numbers, but the principle is the same. No right or wrong answer. Your decision.

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44 minutes ago, DonMuncy said:

Three reasons not to overvalue your plane for insurance.

1. The insurance carrier  will not go for a GROSSLY evaluated number.

2. Insurance premium goes up some.   

But most important

3. Say you could somehow insure your $100,000 plane for $200,00. If you have an accident which would require $175,000 to repair, the carrier would pay the $175,000 and you wind up with a plane with significant damage history. You may wish you had $125,000 to replace it. 

These are exaggerated numbers, but the principle is the same. No right or wrong answer. Your decision.

I'm in complete agreement here. 

But with Mooneys that are in the sub $50K range, it's too easy for a simple gear up, to total out the plane. So with good C's and E's becoming more and more rare, it's worth it to keep the good ones flying.

N6XM is the poster plane for this issue.

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The rule of thumb is to insure your aircraft for a value at which you could replace it with one of like kind and quality.

Discuss with an insurance agent who has owned planes and they'll help you fine-tune the agreed value to request.

 

BTW - Picking nits, but there is a big difference between stated value and agreed value.  Fortunately, Stated Value is typically not found in aviation insurance.

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This is something I learned from a friend who gear upped his 210 due to a mechanical failure. He got a good price and insured it for that amount.  

You insure for 75k and have an incident.  They find out what scrap value, and let's say that's 18-20k.  They subtract that from the insured value. So once your damage comes close to 50k, they total you.  Easy to total a vintage plane since prop and engine are so pricey. Add some sheet metal and labor, and you see where this goes.  

I'm not an insurance expert, and I just heard this second hand, so take it with a grain of salt.

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On the other hand, while I like my airplane, it isn't like a person.  It's a machine.  If I have enough insurance, and the plane gets totaled, I can buy another one that is just as nice.  And then I won't have one that I have to list as damaged/repaired when it comes time to sell it.

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1 hour ago, Bob - S50 said:

On the other hand, while I like my airplane, it isn't like a person.  It's a machine.  If I have enough insurance, and the plane gets totaled, I can buy another one that is just as nice.  And then I won't have one that I have to list as damaged/repaired when it comes time to sell it.

You can buy another nice J (at least for a few more years). 

But if you're flying a really nice C, it might be the only one in the country.

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