Insurance renewal shock

[LANCECASPER]

19 hours ago, moontownMooney said:

As a point of reference... We just went through our third renewal with this plane. Our
rates went up ~40% despite the last of our named pilots getting his IFR and all of us getting good time in this year. We are hangared, have four named pilots, all IFR, all over 250 hrs total, over 100 RG, all under 40, all over 30 hrs make and model. Our premium for $65k hull value is $3750. Apparently our biggest issue is that we are based at a short-ish grass strip.

Sent from my LM-V405 using Tapatalk
 

When you think of the exposure the insurance company has with 4 separate pilots on a short-ish grass strip that premium seems in line. That's $937.50 per pilot.

[Vance Harral]

18 hours ago, LANCECASPER said:

When you think of the exposure the insurance company has with 4 separate pilots

Right.  One thing that's happening in this thread is people mixing quotes for individual policies with one named insured, with partnership policies that name multiple insured pilots.  I posted my data point because moontownMooney posted a premium for his four-person partnership that was considerably more expensive than our four-person partnership.  KLRDMD says his premium for a twin is close to ours and he's happy with it, but I presume that a personal policy that covers only him.

[MIm20c]

The partnership premiums are IMO way under what they should be. Four pilots flying 200 hrs total should be double the price of a single pilot flying that same number of hours. 

[Vance Harral]

2 hours ago, MIm20c said:

Four pilots flying 200 hrs total should be double the price of a single pilot flying that same number of hours.

Based on anecdotal reports from individual owners with a single pilot on the policy, I think that's about what the market is actually charging.  Our partnership premiums have always been substantially more expensive than what sole owners with only one named insured on the policy are paying.

My understanding is that when you move beyond 4 pilots, the insurance companies switch from treating you as a "partnership" to treating you as a "flying club", with another substantial jump in premiums.

[MikeOH]

Hypothetical for all the insurance company lovers out there:  Four pilots, all with equal ratings, hours, etc. pay twice what one of them, by themselves, would pay for a policy.  Only ONE pilot can fly the plane at a time.  Please explain why it's reasonable for the insurance company to DOUBLE the premium if the TOTAL hours is the same, either way?

[N231BN]

Hypothetical for all the insurance company lovers out there:  Four pilots, all with equal ratings, hours, etc. pay twice what one of them, by themselves, would pay for a policy.  Only ONE pilot can fly the plane at a time.  Please explain why it's reasonable for the insurance company to DOUBLE the premium if the TOTAL hours is the same, either way?

Hypothetical answer, let's say one in every four Mooney pilots has an incident. That airplane now has a much higher chance of getting damaged.

[MIm20c]

1 hour ago, MikeOH said:

Hypothetical for all the insurance company lovers out there:  Four pilots, all with equal ratings, hours, etc. pay twice what one of them, by themselves, would pay for a policy.  Only ONE pilot can fly the plane at a time.  Please explain why it's reasonable for the insurance company to DOUBLE the premium if the TOTAL hours is the same, either way?

Using an example of 50hrs flown by each pilot per year that’s only 4 ish hours per month.  That would leave plenty of available time for the other three members to do the same. To me that seems like 4x the risk factor for the plane. Double the price seems fair to me but I have a feeling it’s much lower. I added two named pilots to my policy in the past and it didn’t increase my premium by one penny. In my case I was a higher risk factor than the other two and I understand and appreciate the ability to do so.  However, the underwriters are beating up on the older pilots, I feel they should spread the abuse to other areas…

[MikeOH]

1 hour ago, N231BN said:

2 hours ago, MikeOH said:

Hypothetical for all the insurance company lovers out there:  Four pilots, all with equal ratings, hours, etc. pay twice what one of them, by themselves, would pay for a policy.  Only ONE pilot can fly the plane at a time.  Please explain why it's reasonable for the insurance company to DOUBLE the premium if the TOTAL hours is the same, either way?

Hypothetical answer, let's say one in every four Mooney pilots has an incident. That airplane now has a much higher chance of getting damaged.

HUH?  My hypo was that the TOTAL hours remain the same.  If they all have the same experience, etc. their individual risk per hour is identical.  So, what difference does it make if ONE pilot flys 200 hours, or FOUR pilots fly 50 hours each?

[MikeOH]

35 minutes ago, MIm20c said:

Using an example of 50hrs flown by each pilot per year that’s only 4 ish hours per month.  That would leave plenty of available time for the other three members to do the same. To me that seems like 4x the risk factor for the plane. Double the price seems fair to me but I have a feeling it’s much lower. I added two named pilots to my policy in the past and it didn’t increase my premium by one penny. In my case I was a higher risk factor than the other two and I understand and appreciate the ability to do so.  However, the underwriters are beating up on the older pilots, I feel they should spread the abuse to other areas…

And, again, how is the insurance company's risk exposure higher if four pilots fly 50 hours each, or one pilot flys 200 hours?  Remember the premise in my hypo that EACH pilot is equally experienced, etc and, therefore, presents the same risk profile per hour of flight.  One can even assume the rate is based on the worst pilot, still doesn't justify 2X unless that's what he'd get charged as the sole pilot on a policy.

[N231BN]

It doesn't have anything to do with hours, the more pilots that fly an airplane the higher the chance that one of them makes a mistake. Remember, half of us are below average. Hypothetically.

[Vance Harral]

If we're going to speculate, I can think of several reasons why four pilots of identical experience flying 50 hours apiece might be riskier than one pilot flying 200 hours.

An obvious reason is the potential for miscommunication about the state of the airplane: fuel, squawks, required inspections, etc.  Sure, these risks are mitigated by careful pre-flight inspections by each pilot, but we're talking about humans, not robots.  All partnerships have at least some minor inefficiencies in communication, and some partnerships are quite sketchy in this respect.

Next, since no pilot operates an aircraft exactly the same as another, the likelihood of an incident involving some gizmo being set to an unfamiliar mode by another pilot increases, especially in an airplane with fancy modern displays and navigators.  Fuel totalizer again comes to mind, but could also be that one pilot de-selects the weather layer on a moving map, leading the next pilot to think the weather ahead is clear.

Next, having a partnership airplane means a change in one pilot's plans due to weather, illness, etc, can adversely affect the plans of another partner - probably one they like and respect.  That can increase get-there-itis pressure to negative ends.

Finally, since we're dealing with humans, there are going to be cases where one partner commits some personal mistake they try to hide: minor overtemp or overboost of the engine, extending the gear or flaps above their limit speeds, etc..  At least some of those folks might have taken the airplane to the shop immediately as sole owner, but are inclined to let it ride to the next annual in a partnership.

These are all reasons why some people would never consider being in a partnership.  I don't think any of these risks are large, and I'm not saying they justify any particular increase in premium.  But it's not unreasonable to think a multi-pilot partnership has an elevated risk profile vs. a single named insured, even when the average experience and total hours flown in the partnership is identical to that of the single owner.

[carusoam]

Nice list Vance!

Things to watch for,  if you share a plane….  

Best regards,

-a-

[yvesg]

Got my renewal quote today. 9% increase. Will just check the box and say fine... not worth getting other quotes.

Yves

[MIm20c]

10 hours ago, MikeOH said:

And, again, how is the insurance company's risk exposure higher if four pilots fly 50 hours each, or one pilot flys 200 hours?  Remember the premise in my hypo that EACH pilot is equally experienced, etc and, therefore, presents the same risk profile per hour of flight.  One can even assume the rate is based on the worst pilot, still doesn't justify 2X unless that's what he'd get charged as the sole pilot on a policy.

I agree with everything Vance said. I was implying (with my last post) that the sole owner and the partnership participants were each flying 50 hours to keep thing even. Or you could have all the pilots fly 150 hrs per year. My point is/was that if you insured all the pilots in the partnership individually it would probably total a lot more (2-3x) what they are currently paying as a partnership. 

[Chris Briley]

Quick Update - I connected with Parker at airspeedinsurance.com.  He delivered!  My premium decreased by ~13% while I increased my hull coverage by ~25%.  The process was super easy and fast.  If you don’t like your current broker, give Parker a call! 

[carusoam]

Great pirep for Parker and airspeed Insurance!

Way to go Parker!

Thanks for sharing the pirep Chris!

Best regards,

-a-

[MikeOH]

20 hours ago, Vance Harral said:

If we're going to speculate, I can think of several reasons why four pilots of identical experience flying 50 hours apiece might be riskier than one pilot flying 200 hours.

An obvious reason is the potential for miscommunication about the state of the airplane: fuel, squawks, required inspections, etc.  Sure, these risks are mitigated by careful pre-flight inspections by each pilot, but we're talking about humans, not robots.  All partnerships have at least some minor inefficiencies in communication, and some partnerships are quite sketchy in this respect.

Next, since no pilot operates an aircraft exactly the same as another, the likelihood of an incident involving some gizmo being set to an unfamiliar mode by another pilot increases, especially in an airplane with fancy modern displays and navigators.  Fuel totalizer again comes to mind, but could also be that one pilot de-selects the weather layer on a moving map, leading the next pilot to think the weather ahead is clear.

Next, having a partnership airplane means a change in one pilot's plans due to weather, illness, etc, can adversely affect the plans of another partner - probably one they like and respect.  That can increase get-there-itis pressure to negative ends.

Finally, since we're dealing with humans, there are going to be cases where one partner commits some personal mistake they try to hide: minor overtemp or overboost of the engine, extending the gear or flaps above their limit speeds, etc..  At least some of those folks might have taken the airplane to the shop immediately as sole owner, but are inclined to let it ride to the next annual in a partnership.

These are all reasons why some people would never consider being in a partnership.  I don't think any of these risks are large, and I'm not saying they justify any particular increase in premium.  But it's not unreasonable to think a multi-pilot partnership has an elevated risk profile vs. a single named insured, even when the average experience and total hours flown in the partnership is identical to that of the single owner.

Good analysis.  Can't say I disagree with any of those effects.

I also don't believe that those risks justify the 2X increase

[MikeOH]

12 hours ago, MIm20c said:

My point is/was that if you insured all the pilots in the partnership individually it would probably total a lot more (2-3x) what they are currently paying as a partnership. 

I agree with that 100%.  And, that is EXACTLY what I think is going on here: The insurance company would make a lot more money if four pilots insured four airplanes, rather than sharing one (equal hours).  Not taking into account Vance's valid points, their risk exposure is the same, yet the premium is double!  They'd like to get away with 4X (equal premium to four individual aircraft), but know they can't.  Their not-in-motion risk goes down as well; by a factor of 4.

[59Moonster]

Just heard from Avemco. Rates going down 10% because I've been with them for  a year. And will go down another 9% after another 75 hours. This appears to be my first real break in insurance since I I've owned my Mooney. 

[Parker_Woodruff]

On 6/15/2021 at 8:49 PM, MikeOH said:

Hypothetical for all the insurance company lovers out there:  Four pilots, all with equal ratings, hours, etc. pay twice what one of them, by themselves, would pay for a policy.  Only ONE pilot can fly the plane at a time.  Please explain why it's reasonable for the insurance company to DOUBLE the premium if the TOTAL hours is the same, either way?

It's normally about 25-50% surcharge when you hit 4 equally experienced pilots.

[Parker_Woodruff]

18 hours ago, Chris Briley said:

Quick Update - I connected with Parker at airspeedinsurance.com.  He delivered!  My premium decreased by ~13% while I increased my hull coverage by ~25%.  The process was super easy and fast.  If you don’t like your current broker, give Parker a call! 

Thanks, Chris!  Now go hit 500 total time and you'll be looking good for next year.

[Shadrach]

On 6/14/2021 at 4:33 PM, M20Doc said:

My daughter's $7000 cars costs almost as much to insure as my other daughter's $45,000 C150.

If the car is written off I'd be lucky to get a few thousand back.

 

Clarence

Even with the exchange rate that’s top of market. Must be a damn nice C150!

[Shadrach]

13 minutes ago, 59Moonster said:

Just heard from Avemco. Rates going down 10% because I've been with them for  a year. And will go down another 9% after another 75 hours. This appears to be my first real break in insurance since I I've owned my Mooney. 

That’s good news. On the other hand I have found Avemco to be 25% to 40% higher than the other carriers (and the best in the event of an accident). Perhaps the carriers are just correcting to where they should be.

[Guest]

20 minutes ago, Shadrach said:

Even with the exchange rate that’s top of market. Must be a damn nice C150!

The issue at the moment is the supply is so very small, so prices are up.

Clarence

[Shadrach]

On 6/15/2021 at 4:50 PM, Vance Harral said:

Based on anecdotal reports from individual owners with a single pilot on the policy, I think that's about what the market is actually charging.  Our partnership premiums have always been substantially more expensive than what sole owners with only one named insured on the policy are paying.

My understanding is that when you move beyond 4 pilots, the insurance companies switch from treating you as a "partnership" to treating you as a "flying club", with another substantial jump in premiums.

I asked for a quote to add a third partner to our two person partnership. New guy is 305TT with 165HP/COMP. It raised our renewal rate (up 40% from previous year) from $1855 to $2091. So the per pilot expense went $927 a piece to $697. I thought for sure it would be way more expensive. Both current partners have over 1000 hours and type in one of us is an ATP.