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Insurance Liability Question


MikeOH

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@Parker_Woodruff

Regarding ONLY liability coverage, I am curious how often the typical $1 million limit is actually paid out, AND, more importantly, how often a judgement EXCEEDS policy limits and the owner has to pay out of pocket.

Are these things tracked, or is it all secret 'sealed document' information?

Curious in California:D

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7 hours ago, MikeOH said:

@Parker_Woodruff

Regarding ONLY liability coverage, I am curious how often the typical $1 million limit is actually paid out, AND, more importantly, how often a judgement EXCEEDS policy limits and the owner has to pay out of pocket.

Are these things tracked, or is it all secret 'sealed document' information?

Curious in California:D

All data would probably be anecdotal - aviation doesn’t have the large numbers to aggregate all this stuff.
 

When I was an underwriter it was a bunch of pilots trying to run an insurance company. Contrary to popular belief, we did not have an actuary on staff.

Regarding your first question about how often $1MM (or a full limit)is paid out, I don’t know but I can tell you what it’s like to show up at work and be the luckily winner of my initials next to a claim with reserves at $1,000,000.:ph34r:

After the initial frustration, reality sets in on how many good accounts you have to write to fill that hole. 

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The problem for the carrier is not having to pay out the policy limits, it is having to defend the claim against the pilot. The carrier cannot simply offer the policy limits to settle its liability and then walk away. For the pilot who thinks about running bare, the problem is likewise having to pay the cost of defending against claims. 

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 Just read somewhere, perhaps the WSJ, a trial lawyer said in 30 years he’d never seen a payment over limits.  And an Avemco underwriter told me they find claims usually settle for limits at the most.  But some do go over.  A local guy paid $300 k out of pocket, and there was a young CFI that got hit with a $1.5M award.  I think this is the most dangerous part of GA.

 

 

 

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2 hours ago, Lance Link said:

 Just read somewhere, perhaps the WSJ, a trial lawyer said in 30 years he’d never seen a payment over limits.  And an Avemco underwriter told me they find claims usually settle for limits at the most.  But some do go over.  A local guy paid $300 k out of pocket, and there was a young CFI that got hit with a $1.5M award.  I think this is the most dangerous part of GA.

 

 

 

Not trying to be cute here, but the most dangerous part of GA is that our planes move fast enough that they can kill humans that are inside of them and, less often, humans that are not inside of them.

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You are right 1980 Mooney.  We had an 83 year old guy crash a Malibu I believe on the freeway just short of the runway here at KCCR a few years back.  Killed the better part of two families. Eight major lawsuits resulted.  I cannot imagine he has sufficient limits.  But I think the question is how often awards exceed limits.  What are our chances of having to pay out of pocket?  It depends of course.  Personally, I only put one potential plaintiff in my plane at a time.  That’s part of my risk management.

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Anyone involved in being a defendant in a major law suit should hire an attorney that specializes in insurance claims. This attorney will be there to protect you from your insurance company.  
I had an insurance company ask me to participate in the settlement after paying for insurance for over 30 years.  
they eventually settled for about 55% of policy limits.

Insurance Company attorneys are not there for you.

 

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21 hours ago, Flash said:

Not trying to be cute here, but the most dangerous part of GA is that our planes move fast enough that they can kill humans that are inside of them and, less often, humans that are not inside of them.

The same is unfortunately true of our cars and trucks . . . .

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