Insurance pain for everyone.

[Mooneymite]

https://www.ainonline.com/aviation-news/business-aviation/2023-11-01/inflation-latest-issue-difficult-insurance-market?_hsmi=281141661&_hsenc=p2ANqtz-9OcrbwkbhGCuWKzSyHzapeuoSMC2k9tVBdL0zSdlypvNP9El1y2b2-FvCQU5IK9Qqb2l4wdQcprRfhxxmxQptekFjZ-w

 

************

Inflation Latest Issue in Difficult Insurance Market

Aviation brokers and underwriters have a new villain to blame for the continued increases in insurance premiums since 2019: inflation. Aircraft owners, pilots, operators, and supporting aviation businesses have reportedly seen insurance premiums increase up to 30 percent year-over-year since 2019.

In addition, certain pilot and operator segments are finding it increasingly difficult to even obtain insurance. Brokers are resorting to complex quota share and vertical placement agreements previously used mainly in the airline segment to cover risks that no single carrier wants to cover on its own.

Read more

[0TreeLemur]

Here's my 2-cents about VREF.  As someone with a professional background in estimating, I find VREF largely inadequate for valuing Mooneys.  It lacks many Mooney specific cost factors that if done, add a lot of value, and if not, can cost a lot of money if needed (think tank re-seal, puck replacement).  Also, its web interface for feature selection (e.g. avionics) can be really cumbersome for certain avionics makes/models, many of which seem to be missing.

Better off using Jimmy Garrison's value guide, with adjustment of unit costs based on recent reported costs here on MS for expensive maintenance items.

[dominikos]

I will be contrarian on this one. My plane insurance actually went down this year, even with a hull value increase. Kept flying, taking training. I was told that some companies started to get back into the market…

On the flip side, house and car insurance is going through the roof, rates went up almost 20%. No major event, no fault on my end. More uninsured drivers on the road and cost to rebuilt house went up significantly.

I start to think that insurance is a drag on the economy, for those who pay it… I’m seriously considering to postpone car upgrade because the car insurance cost for year will be 10% of car value.

Edited November 5, 2023 by dominikos

[ragedracer1977]

2 hours ago, dominikos said:

I will be contrarian on this one. My plane insurance actually went down this year, even with a hull value increase. Kept flying, taking training. I was told that some companies started to get back into the market…

On the flip side, house and car insurance is going through the roof, rates went up almost 20%. No major event, no fault on my end. More uninsured drivers on the road and cost to rebuilt house went up significantly.

I start to think that insurance is a drag on the economy, for those who pay it… I’m seriously considering to postpone car upgrade because the car insurance cost for year will be 10% of car value.

Same here.  Insurance went down 10%, hull value went up 20%.

[tls pilot]

On 11/4/2023 at 10:11 AM, Mooneymite said:

https://www.ainonline.com/aviation-news/business-aviation/2023-11-01/inflation-latest-issue-difficult-insurance-market?_hsmi=281141661&_hsenc=p2ANqtz-9OcrbwkbhGCuWKzSyHzapeuoSMC2k9tVBdL0zSdlypvNP9El1y2b2-FvCQU5IK9Qqb2l4wdQcprRfhxxmxQptekFjZ-w

 

************

Inflation Latest Issue in Difficult Insurance Market

Aviation brokers and underwriters have a new villain to blame for the continued increases in insurance premiums since 2019: inflation. Aircraft owners, pilots, operators, and supporting aviation businesses have reportedly seen insurance premiums increase up to 30 percent year-over-year since 2019.

In addition, certain pilot and operator segments are finding it increasingly difficult to even obtain insurance. Brokers are resorting to complex quota share and vertical placement agreements previously used mainly in the airline segment to cover risks that no single carrier wants to cover on its own.

Read more

exact same article previously posted

[A64Pilot]

On 11/5/2023 at 5:15 PM, ragedracer1977 said:

Same here.  Insurance went down 10%, hull value went up 20%.

I think your probably a younger less experienced pilot, those of us that are Commercial / instrument or higher rated for decades don’t see any of that, even with decades of no accidents / incidents.

In the beginning insurence has always gone down with experience, no claims and higher Certifications, but it didn’t on average increase in cost like it has in recent years. That’s new.

I just bought a Motorhome and was surprised to find that it’s insurance if based on hull value was more expensive than my Mooney insurance, additionally as others have posted my house insurance has increased greatly since 2020 or so. Go look at your Auto insurence I bet if you run the numbers on the value of the car you may find the aircraft insurence is cheaper. Of course you can’t really compare the two because collision claims between aircraft are rare while they may be the norm for auto’s.

In my opinion what the cause of these increased prices in everything is inflation.

It’s a fantasy to believe we only experienced 8% inflation for one year or that it’s “transitory”. As long as the price of everything is increasing I think inflation is in play, that is the definition of inflation isn’t it?

If I add up the cost of insurence I pay yearly, it’s phenomenal. Based on all the crooked Lawyer ads I carry a 2 Mil umbrella coverage that I’m sure exempts Aviation, but I think I pay monthly as much for insurence as a house payment.

So yes for me it’s definitely a drag on my finances, if the Mooney wasn’t a retract I’d go “naked” insurence wise

[N201MKTurbo]

Every year I ask my insurance guy if there is anything I can do to reduce my insurance cost. He always says no, with your experience, you are already as cheap as it gets. 

[Sue Bon]

Mind if I ask approximately how much you guys pay for insurance? I think I remember someone saying around $1200 per year or so. 

[N201MKTurbo]

12 minutes ago, Sue Bon said:

Mind if I ask approximately how much you guys pay for insurance? I think I remember someone saying around $1200 per year or so. 

I would have to look it up. My wife pays the bills. But that number sounds about right. It was always less than $1000 for years, but I bumped the hull value up and the inflation thing of course.

[EricJ]

14 minutes ago, Sue Bon said:

Mind if I ask approximately how much you guys pay for insurance? I think I remember someone saying around $1200 per year or so. 

It's going to depend a lot on how much coverage there is on the hull.   Mine was $1800 last year with a hull of $105k.     This year I increased the hull to $145k and it was $2200.

[Sue Bon]

Mine is CHF 5500.- for a hull coverage of 150k.

Economies of Scale would explain it. But no matter what you're paying, if you're used to X and suddenly you have to pay X+20%, it hurts.

[N201MKTurbo]

2 minutes ago, Sue Bon said:

Mine is CHF 5500.- for a hull coverage of 150k.

Economies of Scale would explain it. But no matter what you're paying, if you're used to X and suddenly you have to pay X+20%, it hurts.

Wow! that's $6907 USD!

[Sue Bon]

2 minutes ago, N201MKTurbo said:

Wow! that's $6907 USD!

Yeah. Welcome to Switzerland. It's all part of the "it costs 2-3 times as much to own a Mooney over here" thing.

[N201MKTurbo]

3 minutes ago, Sue Bon said:

Yeah. Welcome to Switzerland. It's all part of the "it costs 2-3 times as much to own a Mooney over here" thing.

OK, we don't get to bitch about insurance any more....

[EricJ]

1 minute ago, N201MKTurbo said:

OK, we don't get to bitch about insurance any more....

Or fuel prices... 

[Sue Bon]

2 minutes ago, N201MKTurbo said:

OK, we don't get to bitch about insurance any more....

 

Just now, EricJ said:

Or fuel prices... 

You have no idea what it takes for me to hold myself back when these topics come up! But, like I said, it's all relative and increasing costs always hurt.

On the good side, I increased my hull coverage from 100k to 150k and my premium only went up by CHF 45.-

[KLRDMD]

My insurance renewal was six weeks ago. I paid $2,574 for a $175k hull. That's down from $3,088 for $160k hull the previous year. A 17% decrease in premium with a 9% increase in hull value. But that's an M35 Bonanza.

[ragedracer1977]

14 hours ago, A64Pilot said:

I think your probably a younger less experienced pilot, those of us that are Commercial / instrument or higher rated for decades don’t see any of that, even with decades of no accidents / incidents.

In the beginning insurence has always gone down with experience, no claims and higher Certifications, but it didn’t on average increase in cost like it has in recent years. That’s new.

I just bought a Motorhome and was surprised to find that it’s insurance if based on hull value was more expensive than my Mooney insurance, additionally as others have posted my house insurance has increased greatly since 2020 or so. Go look at your Auto insurence I bet if you run the numbers on the value of the car you may find the aircraft insurence is cheaper. Of course you can’t really compare the two because collision claims between aircraft are rare while they may be the norm for auto’s.

In my opinion what the cause of these increased prices in everything is inflation.

It’s a fantasy to believe we only experienced 8% inflation for one year or that it’s “transitory”. As long as the price of everything is increasing I think inflation is in play, that is the definition of inflation isn’t it?

If I add up the cost of insurence I pay yearly, it’s phenomenal. Based on all the crooked Lawyer ads I carry a 2 Mil umbrella coverage that I’m sure exempts Aviation, but I think I pay monthly as much for insurence as a house payment.

So yes for me it’s definitely a drag on my finances, if the Mooney wasn’t a retract I’d go “naked” insurence wise

True enough.  I only have 1300 ish hours.  No cpl.  just IR and multi.  I have about 80 hours in 172s, 20 hours in random singles, 700 or so in mooneys and almost 500 in my 310.
 

my broker said he didn’t think I’d see much of a decrease getting my cpl, so I haven’t really bothered.  

I’m just surprised to see a decrease at all. My experience really didn’t change much.  

[kerry]

11 hours ago, KLRDMD said:

My insurance renewal was six weeks ago. I paid $2,574 for a $175k hull. That's down from $3,088 for $160k hull the previous year. A 17% decrease in premium with a 9% increase in hull value. But that's an M35 Bonanza.

My renewal did about the same thing this year.  They gave me the option of keeping the same hull coverage for a significant lower premium or increase my hull value with the premium going down a few hundred dollars.  

[Pinecone]

Mine dropped about 10% for over 100 hours make and model.  There was a slight decrease before I pointed out I was over 100 hours.

The original price was based on Commercial, Instrument, about 2000 total hours, over 700 retract hours.

 

[JayMatt]

On 11/8/2023 at 12:57 AM, Pinecone said:

Mine dropped about 10% for over 100 hours make and model. 

 

The FAA screwed me on my medical so I couldn't fly a couple months and I'm not at the 100 hour mark. Mine just went up to 4200 a year. (noob pilot) 

 I came to revive this thread so I could bit@h about the increases. I've been looking at Mooney prices and if anything they are going down again aren't they? Inflation is really starting to hurt to be honest and it's so bloody expensive to do anything. 

[1980Mooney]

7 hours ago, JayMatt said:

The FAA screwed me on my medical so I couldn't fly a couple months and I'm not at the 100 hour mark. Mine just went up to 4200 a year. (noob pilot) 

 I came to revive this thread so I could bit@h about the increases. I've been looking at Mooney prices and if anything they are going down again aren't they? Inflation is really starting to hurt to be honest and it's so bloody expensive to do anything. 

On Beechtalk, there have been comments in the last month that the inventory of Citation jets (a lot are older) is higher than it has been in a long time.  Additionally they are seeing the inventory increase in November which is a time that it historically does not increase.  They said "asking" prices are staying high but they expect them to drop with the rising inventory.

Also the collector car market is a lot like our nearly antique fleet of Mooney's.  Per Hagerty's at the end of September:

"The Hagerty Market Rating (HMR) dropped 1.2 points this month to 68.33—its lowest value in two years. Although this is not the first time that the Market Rating has decreased for 13 months out of a 15-month timeframe, the current downturn includes the steepest decline in Market Rating history. In the past year, the Market Rating has dropped 9.6 points. Before 2023, the largest single-year drop was only 6.9 points.

While still in the “expanding market” range of the spectrum, it’s very likely that the Market Rating will continue to decline as prices soften across the market. The pandemic boom has clearly come to an end."

"This month was the first time since August 2017 in which every single metric used to calculate the Hagerty Market Rating dropped."

"Despite more than $403 million in sales at the Monterey auctions this month, the Median Sale Price metric decreased two points to its lowest score in over a decade. ... The median sale price at Monterey this year was 13 percent lower than a year ago."

Prices will defy gravity only for so long.

Yesterday @Steve Dawson posted in "Mooney Market":

"Controller gives a pretty good idea of the market. Before Covid there were approximately 90-100 Mooneys for sale, then during Covid the demand increased and the number for sale decreased from 40-50 and the prices went up substantially for everything. This morning there's 95 for sale so the demand is lower and the prices should be going down soon. There's a few ad's showing that the plane has been listed for two years so they're probably overpriced and/or have something wrong with them. "

[A64Pilot]

The boom is over and people are borrowed to the hilt etc. to maintain lifestyle as spending power dwindled.

https://www.lendingtree.com/credit-cards/credit-card-debt-statistics/

Many who are still working have had their income increase quite possibly wiping out the increased costs of everything, while those of us who are Retired living off of investments and a retirement income are taking it in the shorts.

Point being is Luxury items like aircraft, vacation homes, RV’s, boats whatever have in the past been among the first things that get difficult to sell in tight times when most would be buyers can’t afford them.

I’m just surprised it took this long, the writing has been on the wall for quite some time. I bought when prices were high, but not at the peak. Best thing I think we can do is ride it out, RV’s, boats, airplanes have never been a good investment anyway.

[hubcap]

The market value of your plane only matters when you get ready to sell. Since I plan to fly another 15 years, I won’t need to worry about the value of it for 14 years.

As far as insurance goes, I will let you know. @Parker_Woodruff is working on my renewal at this time.

[Justin Schmidt]

5 hours ago, A64Pilot said:

The boom is over and people are borrowed to the hilt etc. to maintain lifestyle as spending power dwindled.

https://www.lendingtree.com/credit-cards/credit-card-debt-statistics/

Many who are still working have had their income increase quite possibly wiping out the increased costs of everything, while those of us who are Retired living off of investments and a retirement income are taking it in the shorts.

Point being is Luxury items like aircraft, vacation homes, RV’s, boats whatever have in the past been among the first things that get difficult to sell in tight times when most would be buyers can’t afford them.

I’m just surprised it took this long, the writing has been on the wall for quite some time. I bought when prices were high, but not at the peak. Best thing I think we can do is ride it out, RV’s, boats, airplanes have never been a good investment anyway.

As far as I know none of us working stiffs have received 8%+ raises over the last few years, I am sad to say.