What’s Your Comfort Zone in Regards to Insurance Coverage?

[V1VRV2]

What insurance policy limits are you comfortable with? The minimum or higher?

Liability / Per Passenger Limit

Medical per seat

I’d Just like to see what everyone’s opinions are as I’m considering my coverages for next years policy.

 

[exM20K]

Do you fly with people whose survivors will sue your estate if you lawn dart, or do you fly mostly with family who won't?  If mostly family, I'd lean towards sublimits.

-dan

[toto]

7 minutes ago, exM20K said:

Do you fly with people whose survivors will sue your estate if you lawn dart, or do you fly mostly with family who won't?  If mostly family, I'd lean towards sublimits.

-dan

In the current insurance environment, are underwriters less likely to offer smooth policies? (Asking because I have no idea.)

[carusoam]

I balanced who I bring along, and how much I have to pay…

If you take a lot of guests flying… make sure your coverage meets your needs…

If your guests include the mother and father of several children….   Go to the max…

PP thoughts about what to ask your guests come to mind…. How much does your wife weigh, and do your kids expect to go to college…? 

PP thoughts only… probably want to ask Parker his thoughts too… he will probably be by soon.

Best regards,

-a-

 

[RobertGary1]

20 hours ago, exM20K said:

Do you fly with people whose survivors will sue your estate if you lawn dart, or do you fly mostly with family who won't?  If mostly family, I'd lean towards sublimits.

-dan

I don't consider that much. Liability isn't where the premiums are its hull coverage. You can get a million dollar liability coverage with no hull for not that expensive.

[Hank]

21 hours ago, exM20K said:

Do you fly with people whose survivors will sue your estate if you lawn dart, or do you fly mostly with family who won't?  If mostly family, I'd lean towards sublimits.

-dan

Who do you allow in your car? I let the same into my plane.

[MikeOH]

1 hour ago, RobertGary1 said:

I don't consider that much. Liability isn't where the premiums are its hull coverage. You can get a million dollar liability coverage with no hull for not that expensive.

Read your policy carefully, oftentimes that $1 million liability is ONLY for those on the ground; per seat in the plane may only be $100K.  A smooth policy for $1 mill is going to be more.

[MikeOH]

1 hour ago, Hank said:

Who do you allow in your car? I let the same into my plane.

Respectfully, I think that is a poor analogy.  The jury is NOT going to view an aircraft accident (painted as a RICH aircraft owner) in no where near the same way that they view an auto accident.  And, with my umbrella policy I'm covered for way more than my aircraft.  (Note well that umbrella polices specifically EXCLUDE any liability for GA accidents).

I do NOT fly anyone but family members on trips and pleasure flights... my wife and I have worked too long and hard to put our net worth at risk for a HOBBY.  I looked at a smooth policy and the squeeze wasn't worth the juice of taking friends for rides.  The old 'life is too short to worry about such things' just doesn't cut it with me.

YMMV

[hammdo]

Family only for me - outside CFI's.

Right now I have liability only with no hull - insurance is hard to get if you have any incidents...

-Don

[MikeOH]

Another thing to consider is that even if passengers sign some kind of 'iron clad' waiver (yeah, no such thing anyway), that does NOT stop their spouse/family from suing you!

[jetdriven]

To top it all off the insurance companies are massively raising rates of smooth policies if you can get one at all. We had one for a year but then the renewal was more than double. 

[GeeBee]

Your coverage should be in line with your financial net worth and how much liability you can produce in terms of damage. 

I once flew for a guy that had 100 million liability. That was because he had a large business that was a sole proprietorship. Yeah it was expensive, but it was worth it to him not to deal with corporate issues.

 

 

 

[ArtVandelay]

Another thing to consider is that even if passengers sign some kind of 'iron clad' waiver (yeah, no such thing anyway), that does NOT stop their spouse/family from suing you!

Not to mention the people on the ground.

And LLCs don’t protect you from yourself.

[MikeOH]

4 hours ago, jetdriven said:

To top it all off the insurance companies are massively raising rates of smooth policies if you can get one at all. We had one for a year but then the renewal was more than double. 

Back when I asked it wasn't double; about 50% more, as I recall.  I wasn't going to pay that just to fly friends!

[MikeOH]

2 hours ago, ArtVandelay said:

Not to mention the people on the ground.

Very true, and troubling as it is really an uncovered risk above the $1 million policy limit.

But, if you are going to fly at all, that is a risk that you have to accept or find higher limits.  While it happens, it is pretty rare for a small GA plane accident to injure those on the ground.  The low price of liability only policies is my evidence for the low level or risk.

[MIm20c]

3 hours ago, ArtVandelay said:

Not to mention the people on the ground.

And LLCs don’t protect you from yourself.

Agree, however I think the 100k limit per person is only for passengers…not that 1m is going to go very far…

[RobertGary1]

Im going to look at a part 103 PPC this weekend. I won’t put any insurance on it. You can assign some liability to insurance companies but in the end not all anyway. Choose your tolerance. 

[frcabot]

On 8/26/2021 at 5:05 PM, RobertGary1 said:

I don't consider that much. Liability isn't where the premiums are its hull coverage. You can get a million dollar liability coverage with no hull for not that expensive.

The $1,000,000 policies usually come with only $100,000 per pax (at least all of mine have) so they are pretty useless. A much better policy has a $1,000,000 Combined Single Limit, with no per passenger caps.

I need a high liability limit as I have significant assets ($5+M) and am having a hard time finding an insurer to give me over $1M without exorbitant rates. Obviously, umbrella insurance doesn't cover aviation-related accidents. Even if you don't have PAX, you could crash into someone's house or land on the freeway in an emergency and kill a car driver or something like that. In general, you should have enough insurance to at least equal your assets that aren't protected in bankruptcy (e.g., total net worth minus retirement accounts minus house exemption, usually). This varies per person so there is no one answer for everyone. If you have more assets, you need more coverage. If you are judgment-proof, then getting the bare minimum is OK. If you don't care what happens to your estate if/when you die (e.g., if you bite the bullet in an aviation accident and have no heirs), then I guess it also doesn't matter as much -- but you'd better hope you die, because otherwise you might live the rest of your days as a pauper.

Edited August 28, 2021 by frcabot

[MikeOH]

34 minutes ago, frcabot said:

The $1,000,000 policies usually come with only $100,000 per pax (at least all of mine have) so they are pretty useless. A much better policy has a $1,000,000 Combined Single Limit, with no per passenger caps.

I need a high liability limit as I have significant assets ($5+M) and am having a hard time finding an insurer to give me over $1M without exorbitant rates. Obviously, umbrella insurance doesn't cover aviation-related accidents. Even if you don't have PAX, you could crash into someone's house or land on the freeway in an emergency and kill a car driver or something like that. In general, you should have enough insurance to at least equal your assets that aren't protected in bankruptcy (e.g., total net worth minus retirement accounts minus house exemption, usually). This varies per person so there is no one answer for everyone. If you have more assets, you need more coverage. If you are judgment-proof, then getting the bare minimum is OK. If you don't care what happens to your estate if/when you die (e.g., if you bite the bullet in an aviation accident and have no heirs), then I guess it also doesn't matter as much -- but you'd better hope you die, because otherwise you might live the rest of your days as a pauper.

Maybe it varies state by state, but I was under the impression that the court CAN come after your retirement accounts and home.  Maybe not take it all but, in effect, garnish your retirement income and force you to move to a smaller home (i.e. you live in a $10 million McMansion...I didn't think the court would let you continue to live there.). IOW, you can't bankruptcy your way out of it.  Maybe I'm wrong... I hope so!

[ArtVandelay]

Maybe it varies state by state, but I was under the impression that the court CAN come after your retirement accounts and home.  Maybe not take it all but, in effect, garnish your retirement income and force you to move to a smaller home (i.e. you live in a $10 million McMansion...I didn't think the court would let you continue to live there.). IOW, you can't bankruptcy your way out of it.  Maybe I'm wrong... I hope so!

Florida protects primary home and retirement…even if you’re OJ Simpson, despite losing the lawsuit he has only paid a fraction of it.

[MikeOH]

1 minute ago, ArtVandelay said:

Florida protects primary home and retirement…even if you’re OJ Simpson, despite losing the lawsuit he has only paid a fraction of it.

Ah, yes, you are correct.  I suspect California may be a bit different than Florida!  (I'd move but can't stand the humidity)

[ArtVandelay]

Ah, yes, you are correct.  I suspect California may be a bit different than Florida!  (I'd move but can't stand the humidity)

CA has limits on IRAs, whatever the court deems necessary for you to live on, and some accounts are protected by federal law (401k) so it doesn’t matter what state you’re in.

[RobertGary1]

Just now, ArtVandelay said:

CA has limits on IRAs, whatever the court deems necessary for you to live on, and some accounts are protected by federal law (401k) so it doesn’t matter what state you’re in.

Ah. Maybe a reason not to roll your 401k into an ira?

[MikeOH]

2 hours ago, ArtVandelay said:

CA has limits on IRAs, whatever the court deems necessary for you to live on, and some accounts are protected by federal law (401k) so it doesn’t matter what state you’re in.

But are 401ks FULLY protected?  As in, can the courts order some of what you withdraw to be garnished even if they can't directly raid the 401k itself to satisfy a judgement?

[frcabot]

4 hours ago, MikeOH said:

Maybe it varies state by state, but I was under the impression that the court CAN come after your retirement accounts and home.  Maybe not take it all but, in effect, garnish your retirement income and force you to move to a smaller home (i.e. you live in a $10 million McMansion...I didn't think the court would let you continue to live there.). IOW, you can't bankruptcy your way out of it.  Maybe I'm wrong... I hope so!

No, all retirement assets are protected in bankruptcy by federal law. Exceptions to bankruptcy are essentially only when you commit a purposeful willful tort. A plane crash is usually negligence, not intentional (with the exceptions of incidents like Germanwings etc.)