Can’t get Insurance

[Parker_Woodruff]

There are so many unknowns in the scenarios presented:

• One loss is normally not a reason to non-renew a policy
  • Exceptions to the above statement (but not always the case even under the below circumstances):
    • There is one company that was new to light aircraft (big turbine powerhouse ins co).  In recent history, they were non-renewing after one claim.  This puts the Insured in a bind since other companies like the claim to be closed and in the rearview mirror by a year.
    • A pilot is older (70+ for single engine aircraft, sometimes 75+)
    • The loss was due to exceptionally bad decision making
    • The loss was under questionable circumstances or there were false statements presented by the client in the claim investigation (moral hazard).

13 hours ago, PT20J said:

@Parker_Woodruff, to expand on that: Do other factors come into play such as total experience, recent experience, certificates and ratings, time in type? In other words, consider two pilots:

Pilot #1 has an ATP 10,000 hours, 2,000 hours in a Mooney and lands gear up due to a mechanical failure.

Pilot #2 has a Private, 200 hrs, 50 hours in Mooneys and forgets to put the gear down.

In today's climate, would each be treated equally for renewal?

Thanks,

Skip

Yes, experience does come into play.  The nature of the loss comes into play as well (stupid pilot tricks or did someone just happen to find a pothole on the apron?).

12 hours ago, MikeOH said:

Hmm, I think the more interesting question would be, given the same two hypothetical pilots but both land gear-up due to simply forgetting the gear.  Would they both be treated to policy cancellation?  Or, just the low time guy?

"It depends".

 

The situation in aviation insurance is very fluid right now.

11 hours ago, MikeOH said:

The more I ruminate on this new policy, the more concerned I am becoming.  This policy could cause the GA death spiral to rapidly worsen.  We are already paying higher premiums due to a decline in the active GA pilot population.  Add to that big claims payments in other areas of aviation insurance driving up our premiums...

So, what happens when a GA pilot is denied insurance for a year?  In all likelihood he is going to stop flying, and may NEVER return even after his excommunication has ended.

I hope insurance companies have carefully thought thru this draconian approach.  Prices will spiral upward as the market shrinks and that may lead to such high premiums for the remaining pilots that many may just throw in the towel.  At some point the market will be too small for insurance companies to serve.  YIKES!!

Remember, rates have been going down for the last 15 years.  A 20% increase in premium this year still doesn't get us to the pricing found when I started in this business in 2010.

The cost of settling claims has gone up over that 15 year period even as premiums have decreased.  Most shops and attorneys raise rates every January 1 or at least every few years.

I've recently seen a few Mooney owners paying 10-20% less than 2010 rates in some select cases.

Rates on the commercial side are getting back to those levels, but not yet on the light aircraft side.

[Parker_Woodruff]

8 minutes ago, Yetti said:

I think it will go like the medical market.   Prices will get really high to insure.   people on mooneyspace create a private pool that everyone pays into  Clubs self insure with a part of the dues to cover losses.   Insurance companies realize there is money to be made and lower their rates.    Start the process over.

A bunch of maintenance shops recently participated in a risk retention group and the deal tanked.  If three aviation insurance carriers recently left the market in a 15 month period, rates must have been too low.  They don't leave if they are making money.

[Parker_Woodruff]

In summary, the overall message I'd give MS is this:

• Hard Markets (shrinking capacity, rate increases) are a lot shorter than soft markets.  This whole deal shakeup should be over by middle/end of 2021.
  • The general mentality at insurance carriers is "Get the increases while you can".
  • What normally happens when rates go up is you get a lot non-aviation carrier interest and startup underwriting companies writing on that new paper.
    • These companies have to buy up a book somehow, so they come in cheaper.  Every other company has to decrease rates to hold onto market share.

[kommers]

5 hours ago, Frank B. said:

You should call Joe Cacho at 877-247-7767. While I always insure with him I also always shop his price. I have never been able to beat his price and he searches hard for what you need. Always same day reply and gives you his cell # on the first call, which he always answers. 

 

Agreed! I was using Joe for a few years by now. He got me my first  Mooney insurance and I still get my Mooney insurance through him because I did shop around and nobody could beat his prices

[kommers]

1 hour ago, Parker_Woodruff said:

There are so many unknowns in the scenarios presented:

• One loss is normally not a reason to non-renew a policy
  • Exceptions to the above statement (but not always the case even under the below circumstances):
    • There is one company that was new to light aircraft (big turbine powerhouse ins co).  In recent history, they were non-renewing after one claim.  This puts the Insured in a bind since other companies like the claim to be closed and in the rearview mirror by a year.
    • A pilot is older (70+ for single engine aircraft, sometimes 75+)
    • The loss was due to exceptionally bad decision making
    • The loss was under questionable circumstances or there were false statements presented by the client in the claim investigation (moral hazard).

Yes, experience does come into play.  The nature of the loss comes into play as well (stupid pilot tricks or did someone just happen to find a pothole on the apron?).

"It depends".

 

The situation in aviation insurance is very fluid right now.

Remember, rates have been going down for the last 15 years.  A 20% increase in premium this year still doesn't get us to the pricing found when I started in this business in 2010.

The cost of settling claims has gone up over that 15 year period even as premiums have decreased.  Most shops and attorneys raise rates every January 1 or at least every few years.

I've recently seen a few Mooney owners paying 10-20% less than 2010 rates in some select cases.

Rates on the commercial side are getting back to those levels, but not yet on the light aircraft side.

Well, this is a bit debatable... In July 2015 the gear of my 20C folded after the landing. I wasn't aboard the plane at that moment. Investigation named freshly installed Johnson bar's lock a culprit, thus leaving the pilot free of blame. The airplane was insured for 27K and insurance company wrote it off. Two months later, I bought 20J. This time, only myself and another pilot, were on the policy, neither of us was responsible for that accident. The insurance policy was issued by the same company that previously insured my 20C. A year later, I received a letter frommy  insurance company that stated that policy is not to be renewed due to "past incident". For a record, I am not even close to 70, the incident occurred because of equipment malfunction, I wasn't there when it happened. Insurance company was in light aircraft business for a few years, I had a total of 3 years with them.. and yet, they declined to continue coverage.

[David_H]

10 minutes ago, kommers said:

Well, this is a bit debatable... In July 2015 the gear of my 20C folded after the landing. I wasn't aboard the plane at that moment. Investigation named freshly installed Johnson bar's lock a culprit, thus leaving the pilot free of blame. The airplane was insured for 27K and insurance company wrote it off. Two months later, I bought 20J. This time, only myself and another pilot, were on the policy, neither of us was responsible for that accident. The insurance policy was issued by the same company that previously insured my 20C. A year later, I received a letter for insurance company that stated that policy is not to be renewed due to "past incident". For a record, I am not even close to 70, the incident occurred because of equipment malfunction, I wasn't there when it happened. Insurance company was in light aircraft business for a few years, I had a total of 3 years with them.. and yet, they declined to continue coverage.

This seems to go against the idea of "how the claim happened matters".

[MooneyMitch]

As unfriendly as this may sound, insurance companies (of any sort ) are in the business of making, and keeping that money.  

Keeping that money is their main financial concern. I understand that completely .

With an insurance policy,  you’re betting you will, and they’re betting you won’t ( make a claim that is ).

 

[Parker_Woodruff]

37 minutes ago, kommers said:

Well, this is a bit debatable... In July 2015 the gear of my 20C folded after the landing. I wasn't aboard the plane at that moment. Investigation named freshly installed Johnson bar's lock a culprit, thus leaving the pilot free of blame. The airplane was insured for 27K and insurance company wrote it off. Two months later, I bought 20J. This time, only myself and another pilot, were on the policy, neither of us was responsible for that accident. The insurance policy was issued by the same company that previously insured my 20C. A year later, I received a letter frommy  insurance company that stated that policy is not to be renewed due to "past incident". For a record, I am not even close to 70, the incident occurred because of equipment malfunction, I wasn't there when it happened. Insurance company was in light aircraft business for a few years, I had a total of 3 years with them.. and yet, they declined to continue coverage.

Two losses here - my post was aimed at those with 1 loss in the last 5 years.

[smwash02]

I'll add my personal datapoint here.

Around year 3 of my ownership of my 150, I'd flown to a grass strip (Reklaw) for a big flying event and a massive storm came through and caused a bunch of damage. (Ground not moving)

I sustained a bunch of cosmetic damage (dented / scratched leading edge, ailerons, flaps, prop, wingtips, etc). Insurance offered to total it or pay to fix. I took the pay to fix which was about 70% of the insured value (5 figures). My insurance went up about $50 the next year and I dutifully listed the incident in the 'any incidents in the past 5 years' box and it never changed more than $20.

With the incident still on my past 5 years, I bought my M20C and it didn't really seem to impact the quote much if at all.

Some context - I was a ~300-400 hour pilot, got my IFR shortly after, and was around 26-28. All insurance purchased through AIG/Chartis through AOPA.

[David_H]

7 hours ago, Parker_Woodruff said:

Two losses here - my post was aimed at those with 1 loss in the last 5 years.

I read it as @kommers having only 1 loss with the C when he was with a previous partner.

I could of misunderstood that though.

[MikeOH]

7 hours ago, Parker_Woodruff said:

Two losses here - my post was aimed at those with 1 loss in the last 5 years.

Uh, I'm missing where there are TWO losses???

Please clarify.

[PT20J]

4 minutes ago, MikeOH said:

Uh, I'm missing where there are TWO losses???

Please clarify.

Well, now I'm confused. Sounds to me like @kommers was a named insured on two airplanes that suffered losses.

1st loss was the M20C

2nd loss was the M20J

I'd be interested in Parker's @Parker_Woodruff take, but the insurance company is probably thinking in terms of the risk of continuing to insure the named insured regardless of who was PIC.

Skip

[MikeOH]

53 minutes ago, PT20J said:

Well, now I'm confused. Sounds to me like @kommers was a named insured on two airplanes that suffered losses.

1st loss was the M20C

2nd loss was the M20J

I'd be interested in Parker's @Parker_Woodruff take, but the insurance company is probably thinking in terms of the risk of continuing to insure the named insured regardless of who was PIC.

Skip

I didn't see anywhere the M20J was involved in ANY accident.  What did I miss in Kommers post???

[PT20J]

 

11 minutes ago, MikeOH said:

I didn't see anywhere the M20J was involved in ANY accident.  What did I miss in Kommers post???

Here, unless I misunderstood

9 hours ago, kommers said:

Two months later, I bought 20J. This time, only myself and another pilot, were on the policy, neither of us was responsible for that accident. The insurance policy was issued by the same company that previously insured my 20C.

Skip

[LANCECASPER]

 

1 hour ago, MikeOH said:

Uh, I'm missing where there are TWO losses???

Please clarify.

9 hours ago, kommers said:

Well, this is a bit debatable... Loss #1 In July 2015 the gear of my 20C folded after the landing. I wasn't aboard the plane at that moment. Investigation named freshly installed Johnson bar's lock a culprit, thus leaving the pilot free of blame. The airplane was insured for 27K and insurance company wrote it off. Loss #2 Two months later, I bought 20J. This time, only myself and another pilot, were on the policy, neither of us was responsible for that accident. The insurance policy was issued by the same company that previously insured my 20C. A year later, I received a letter from my  insurance company that stated that policy is not to be renewed due to "past incident". For a record, I am not even close to 70, the incident occurred because of equipment malfunction, I wasn't there when it happened. Insurance company was in light aircraft business for a few years, I had a total of 3 years with them.. and yet, they declined to continue coverage.

[MikeOH]

Just now, PT20J said:

 

Here, unless I misunderstood

Skip

I took "That accident" to be referring to the one in the M20C which neither kommer nor his new partner was responsible for.

[MikeOH]

Just now, LANCECASPER said:

 

Mentioning "that accident" without ever describing it, leads me to the conclusion that kommer was referring to the original one in the M20C.  He could have been clearer and I hope he returns to confirm/clarify.

[LANCECASPER]

Just now, MikeOH said:

Mentioning "that accident" without ever describing it, leads me to the conclusion that kommer was referring to the original one in the M20C.  He could have been clearer and I hope he returns to confirm/clarify.

Good point - I could be reading it wrong also.

[Bravoman]

I think what he was referring to was the accident with the C (being the one and only accident).

[kommers]

55 minutes ago, MikeOH said:

Mentioning "that accident" without ever describing it, leads me to the conclusion that kommer was referring to the original one in the M20C.  He could have been clearer and I hope he returns to confirm/clarify.

I thought I was clear. The ONLY incident that I reported to the insurance company was with Mooney 20C, and it was a gear collapse after the landing  and rolling down the runway.  As to 20J, I never had any incidents or accidents in this plane. Policy for 20C listed 4 pilots, that is  myself,  my mechanic/CFI,  my wife's CFI and my wife. Gear collapse occurred when my wife and her CFI were flying. After the incident, I bought Mooney 20J  and obtained a policy for her with the same insurer.  To my surprise, the new policy for 20J was only slightly more expensive than my previous one for 20C although insured value was more than 3 times higher. My explanation to this was simple: new policy didn't have the people who were flying 20C when incident occurred. I must admit  I was even  cocky enough to request a separate quote for 20J with my wife and her CFI added back, but the  quoted premium made the effect of a powerful laxative on me..  So,  leaving my wife and her CFI out of the deal and with myself and my mechanic remaining,  that insurance company gave me the brand new policy for 20J and I enjoyed it for a year, then I received a letter from them stating that due to the past incident (with 20C), my policy is not to be renewed. I had to find another insurance company, my premium effectively doubled since I had to report that 2015 incident regardless of the fact that I wasn't on board. Next year, I switched to Allianz  and  the premium came down again to remain relatively low for another 2-3 years. Then comes year 2019, Allianz informs me that they no longer insure GA and with yet another new company, that I had to find, premium skyrocketed again and guess what? They keep mentioning that 2015 incident with 20C as a reason for high premiums. I will cross 5 year post-incident mark in July 2020 with hope that since I no longer have to report the events of 2015, insurance companies will show some mercy.. 

[MikeOH]

Just now, kommers said:

I thought I was clear. The ONLY incident that I reported to the insurance company was with Mooney 20C, and it was a gear collapse after the landing  and rolling down the runway.  As to 20J, I never had any incidents or accidents with this plane. Policy for 20C listed 4 pilots, that is  myself, 2 CFI's and my wife. Gear collapse occurred when my wife and her CFI were flying. After the incident, I bought Mooney 20J and this time, only my CFI and myself were on the new policy (to clarify further, neither my wife or her CFI were on the new policy). Both policies were obtained through the same insurer. In fact, new policy for 20J was only slightly more expensive than my previous one for 20C although insured amount was more that 3 times higher. Like I said, that insurance company gave me the policy for 20J and I enjoyed it for a year, then I received a letter from them stating that due to the past incident (with 20C), my policy is not to be renewed.

That's the way I originally read it...then others that thought there were TWO incidents made me begin to wonder.

Anyway, that is ABSURD that the insurance company declined to renew over something you had NOTHING to do with.

Maybe @Parker_Woodruff can explain their "logic" because I have no clue!

[carusoam]

One thing we have learned is how difficult communications can be...

1) I read it as one accident...

2) then I was convinced there were two...  

3) It can take saying things in a different way, in a follow up... to be extra clear...

4) This can occur when people don’t know each other that well... or they come from far away from each other...

5) Often mix-ups in communication come from talking about less than familiar topics...

6) Now I know it was one accident.

Probably, nobody is immune to the goofiness involved with public speaking when the medium requires a lot of typing/writing...

PP thoughts only, not a communications guru... I had to re-learn how to write one day...

Best regards,

-a-

[kommers]

30 minutes ago, MikeOH said:

That's the way I originally read it...then others that thought there were TWO incidents made me begin to wonder.

Anyway, that is ABSURD that the insurance company declined to renew over something you had NOTHING to do with.

Maybe @Parker_Woodruff can explain their "logic" because I have no clue!

Hm... maybe, my English is at fault. After all, English is my second language although for the last 10-15  years, I was writing technical documentation  that was accepted for "production" without changes.

[Parker_Woodruff]

51 minutes ago, MikeOH said:

That's the way I originally read it...then others that thought there were TWO incidents made me begin to wonder.

Anyway, that is ABSURD that the insurance company declined to renew over something you had NOTHING to do with.

Maybe @Parker_Woodruff can explain their "logic" because I have no clue!

It sounds like @kommershad 1 occurrence as a pilot but on an account basis there were still 2 occurrences.  I'm not stating that he was or wasn't at fault in his decision-making of who he lets fly his aircraft, but the underwriter/insurance co sees the other pilot who was at fault in the second occurrence as "this is someone who our insured allows to operate his aircraft".  The Named Insured pilot could be just fine to them, but they're worried about who is flying in the background.

So into the mind of the underwriter we go:

When I was an underwriter at a major aviation carrier I had a client with 3 claims in about a year on one plane and only one was an operational fault of the pilot (and it was the cheap claim).  The other two were literally zero he could do anything about.  But the pilot still broke the airplane on those 2 other occasions through no fault of his own.  How many times could the company total that airplane and the Insured buy it back before everyone in the office is wondering why my initials keep showing up on the loss report next to that account?  That account was non-renewed.  I hated to do it.  The claims guy said he had nothing but good experiences with that client and there was absolutely nothing shady about what was going on.  That $100,000 airplane I think ended up costing the insurance co I worked for about $200,000 over the course of a year on the 3 claims.

No one wants to be an underwriter on a single aircraft account that's had occurrence after occurrence.

Again, I'm not saying this about @kommers, but underwriters can be some of the most skeptical people you'll ever meet because they've sadly been burned one too many times by many different scenarios:

• The loss-prone pilot who's not being reported by the aircraft owner and is regularly flying under the open pilot warranty.
• A Citation risk that's "pro-flown" (getting much cheaper pro-flown rates) and then a loss happens and there's an owner pilot flying in the background who was never disclosed to the ins. co.
• The guy who is running a flight school with his C172 but paying non-commercial rates hoping the insurance company doesn't find out.  I've been the agent saying "I can't help you man - I know what you're doing and I just can't lie to the insurance company."  It happens all the time.

Sometimes you lay awake at night thinking about the fact you work for a publicly traded company and they've given you a letter of authority to underwrite risks that very well may show up on the next morning's loss report to the tune of $29 Million.  Many have known sleepless nights of... "I insure that plane...I hope my file was in order because it just ran off the end of the runway..."

Again, underwriters can be skeptical people, but they are people who sometimes deal with this part of the aftermath of an aviation accident.

@kommersis the nice guy on this board, but he's possibly seen as loss-prone to an underwriter sitting behind a computer.  That's when a good broker will have to go to bat for him or anyone else in that scenario.

[kommers]

Just now, Parker_Woodruff said:

It sounds like @kommershad 1 occurrence as a pilot but on an account basis there were still 2 occurrences.  I'm not stating that he was or wasn't at fault in his decision-making of who he lets fly his aircraft, but the underwriter/insurance co sees the other pilot who was at fault in the second occurrence as "this is someone who our insured allows to operate his aircraft".  The Named Insured pilot could be just fine to them, but they're worried about who is flying in the background.

So into the mind of the underwriter we go:

When I was an underwriter at a major aviation carrier I had a client with 3 claims in about a year on one plane and only one was an operational fault of the pilot (and it was the cheap claim).  The other two were literally zero he could do anything about.  But the pilot still broke the airplane on those 2 other occasions through no fault of his own.  How many times could the company total that airplane and the Insured buy it back before everyone in the office is wondering why my initials keep showing up on the loss report next to that account?  That account was non-renewed.  I hated to do it.  The claims guy said he had nothing but good experiences with that client and there was absolutely nothing shady about what was going on.  That $100,000 airplane I think ended up costing the insurance co I worked for about $200,000 over the course of a year on the 3 claims.

No one wants to be an underwriter on a single aircraft account that's had occurrence after occurrence.

Again, I'm not saying this about @kommers, but underwriters can be some of the most skeptical people you'll ever meet because they've sadly been burned one too many times by many different scenarios:

• The loss-prone pilot who's not being reported by the aircraft owner and is regularly flying under the open pilot warranty.
• A Citation risk that's "pro-flown" (getting much cheaper pro-flown rates) and then a loss happens and there's an owner pilot flying in the background who was never disclosed to the ins. co.
• The guy who is running a flight school with his C172 but paying non-commercial rates hoping the insurance company doesn't find out.  I've been the agent saying "I can't help you man - I know what you're doing and I just can't lie to the insurance company."  It happens all the time.

Sometimes you lay awake at night thinking about the fact you work for a publicly traded company and they've given you a letter of authority to underwrite risks that very well may show up on the next morning's loss report to the tune of $29 Million.  How many sleepless nights of "I insure that plane...I hope my file was in order because it just ran off the end of the runway..."

Again, underwriters can be skeptical people, but they are people who sometimes deal with this part of the aftermath of an aviation accident.

@kommersis the nice guy on this board, but he's possibly seen as loss-prone to an underwriter sitting behind a computer.  That's when a good broker will have to go to bat for him or anyone else in that scenario.

Why would they see me as a loss-prone? Personally, I never caused any problem to the insurers... oh, I forgot, I once totalled my Camry in 2001, but that was on the ground and aviation insurers didn't know about it    When it comes to aviation, technically, there was 1 incident with the planes I owned through my life, and 0 incidents with me as a pilot. Basically, I am punished for the sins of others and that "other" is actually the company that made a faulty Johnson bar lock..