Liability-only insurance for those over 70 comes available

[Rick Junkin]

Here’s a step forward on insurance to allow our senior brethern and sisters who can afford to self-insure for hull to get the liability coverage required for other supporting parts of our aviation hobby. 
 

https://www.aopa.org/news-and-media/all-news/2024/august/14/new-liability-only-insurance-for-senior-pilots?utm_source=epilot&utm_medium=email

[GeeBee]

It always has been available. There is no requirement to take hull unless you have a loan on your airplane and your loan covenants requires it.

 

[N201MKTurbo]

I just got my quote. Liability was $350 and hull was $1800. It's all about the landing gear.... Put er down!

[midlifeflyer]

New? I flew a 172S back in 2005 which was insured for liability only.

 

[Rick Junkin]

3 hours ago, GeeBee said:

It always has been available. There is no requirement to take hull unless you have a loan on your airplane and your loan covenants requires it.

 

 

2 hours ago, midlifeflyer said:

New? I flew a 172S back in 2005 which was insured for liability only.

 

Interesting. The AOPA article makes it sound like this is something that just came about after years of them encouraging underwriters to do it. If it's always been available, was it maybe not available to folks in the over-70 demographic? Is there something specific that wasn't available before that is available now? Hey Parker, care to weigh in? @Parker_Woodruff

EDIT: Maybe this is the part that's new or different?

"This solution would provide senior pilots the opportunity to obtain liability insurance without many of the restrictions being imposed by some underwriters—e.g. requiring a third class medical as opposed to BasicMed, co-pilot requirements, requiring an annual checkride, or other constraints."

[Parker_Woodruff]

I've been able to quote liability only through Global for my entire agent career but I suspect they might be allowing a greater age range than previously indicated.

I'll check with an underwriter there.

Global has been a consistent underwriting company as long as the pilots are "in" before a certain age.

Global is my most common carrier when an aircraft owner wants liability only.

[DXB]

I’m thinking of switching to ground only + liability next time around - it seems like a sensible way to save a few bucks, given constantly rising premiums.  I think a ground loss is much more likely than in flight, other than gear up, and one can try to be committed to putting the gear down.   Also many in flight hull losses are relevant only to one’s estate, which is not a major consideration for me.

[M20F]

On 8/16/2024 at 11:49 AM, GeeBee said:

It always has been available. There is no requirement to take hull unless you have a loan on your airplane and your loan covenants requires it.

 

There is no requirement to take any insurance  aside from loan requirements or an airport looking for named insured.  
 

Think we can both agree that there is a lot of folks with no insurance, annual, biannual, or even a certificate flying around the skies.  When I was flying a lot in OK it was anyone with a CB was suspect, most folks had CB’s. 

[GeeBee]

Wonder what the full story is here. 

https://www.yahoo.com/news/santa-fe-family-struggles-insurance-040500421.html

[MikeOH]

3 hours ago, GeeBee said:

Wonder what the full story is here. 

https://www.yahoo.com/news/santa-fe-family-struggles-insurance-040500421.html

I'll take a stab at it:  Unless there is some total fraud here I'm going to assume the FACT that a plane crashed into this family's house, through ABSOLUTELY no fault of their own is 100% true.  It is pretty clear the family has NOT 'been made whole'.  Sadly, that is typical of most homeowner polices: they do NOT cover making you 100% whole again if your house is destroyed; you are not going to get your house rebuilt and all furnishings/contents replaced.  Mostly, the policy is there to provide coverage for all of your mortgage to protect the bank's interest, not your own.  My suspicion, based on the comment that AIG offered 'a small percentage' is that AIG is treating something that is 100% their insured's (the pilot) fault as if it was a 'homeowner's policy'. They are holding fast to NOT making the family whole, but claiming their liability is no greater than that of a typical 'homeowner's' policy.  The sad reality is that even after this family drags AIG to court and hopefully gets a just award, AIG will appeal it and drag out payment for many more years.

[M20F]

God I hate old people, they ruin it for everyone.  

[Pinecone]

31 minutes ago, MikeOH said:

I'll take a stab at it:  Unless there is some total fraud here I'm going to assume the FACT that a plane crashed into this family's house, through ABSOLUTELY no fault of their own is 100% true.  It is pretty clear the family has NOT 'been made whole'.  Sadly, that is typical of most homeowner polices: they do NOT cover making you 100% whole again if your house is destroyed; you are not going to get your house rebuilt and all furnishings/contents replaced.  Mostly, the policy is there to provide coverage for all of your mortgage to protect the bank's interest, not your own.  My suspicion, based on the comment that AIG offered 'a small percentage' is that AIG is treating something that is 100% their insured's (the pilot) fault as if it was a 'homeowner's policy'. They are holding fast to NOT making the family whole, but claiming their liability is no greater than that of a typical 'homeowner's' policy.  The sad reality is that even after this family drags AIG to court and hopefully gets a just award, AIG will appeal it and drag out payment for many more years.

AIG probably wrote a typical $1 million liability with $100 k sub limits.  So they will pay out $100,000.  As per the policy.

I am sure that is a small fraction of the cost of the house and the contents.

FYI my homeowners policy is written to cover expected replacement cost, with a separate number for the contents (as a percentage of the house replacement cost).  They automatically adjust the replacement costs yearly.  But I probably should call and talk to them about what it should be now with the rise in materials and labor costs.

[MikeOH]

3 minutes ago, Pinecone said:

AIG probably wrote a typical $1 million liability with $100 k sub limits.  So they will pay out $100,000.  As per the policy.

I am sure that is a small fraction of the cost of the house and the contents.

FYI my homeowners policy is written to cover expected replacement cost, with a separate number for the contents (as a percentage of the house replacement cost).  They automatically adjust the replacement costs yearly.  But I probably should call and talk to them about what it should be now with the rise in materials and labor costs.

Normally, the $100K sublimit applies only to passengers, NOT those on the ground (although AVEMCO may also limit ground to $100K) so the full $1 million should be available to the family (unless you have knowledge that AIG also limits ground damage.)

And, yeah, be careful with what "extended replacement cost" really means; it is usually a percent above the stated policy coverage limit but not necessarily sufficient to make you whole.  Good idea to talk with your agent/broker.

[Pinecone]

20 hours ago, MikeOH said:

Normally, the $100K sublimit applies only to passengers, NOT those on the ground (although AVEMCO may also limit ground to $100K) so the full $1 million should be available to the family (unless you have knowledge that AIG also limits ground damage.)

And, yeah, be careful with what "extended replacement cost" really means; it is usually a percent above the stated policy coverage limit but not necessarily sufficient to make you whole.  Good idea to talk with your agent/broker.

True.

It depends on the insurance company.  I am with USAA and they insure to a stated amount, and that amount is automatically raised every year based on some algorithm.

[Parker_Woodruff]

It's doesn't matter if this was pilot error or not.  What matters was if the policyholder was in compliance of the terms of the policy (and AIG's policy doesn't really have a bunch of pitfalls) for it to be a valid liability claim.

Whatever the homeowner's policy says (if the homeowner has one) doesn't matter at all as to whether coverage is established for the policyholder.  And a homeowner's policy doesn't determine how much AIG should pay out if there is a valid claim.

[MikeOH]

4 hours ago, Parker_Woodruff said:

It's doesn't matter if this was pilot error or not.  What matters was if the policyholder was in compliance of the terms of the policy (and AIG's policy doesn't really have a bunch of pitfalls) for it to be a valid liability claim.

Whatever the homeowner's policy says (if the homeowner has one) doesn't matter at all as to whether coverage is established for the policyholder.  And a homeowner's policy doesn't determine how much AIG should pay out if there is a valid claim.

@Parker_Woodruff

The article indicated that AIG had offered the family something and my reasoning was the policyholder must have been in compliance or they wouldn't have been obligated at all.

And, yes, I realize that the homeowner's policy, whether it even exists, has no LEGAL bearing.  My thought was that AIG used a rough estimate of what a typical homeowner policy's limits are to make their lowball offer.  Since, as we know, it's not too uncommon for a homeowners policy to fall short of what it really takes to make you 'whole' again after your house is destroyed.

[Parker_Woodruff]

32 minutes ago, MikeOH said:

@Parker_Woodruff

The article indicated that AIG had offered the family something and my reasoning was the policyholder must have been in compliance or they wouldn't have been obligated at all.

And, yes, I realize that the homeowner's policy, whether it even exists, has no LEGAL bearing.  My thought was that AIG used a rough estimate of what a typical homeowner policy's limits are to make their lowball offer.  Since, as we know, it's not too uncommon for a homeowners policy to fall short of what it really takes to make you 'whole' again after your house is destroyed.

It looks like they're also going after a product liability judgment.

I wonder how much is a fishing expedition.

https://www.yahoo.com/news/family-sues-plane-company-fatal-035501952.html

 

[MikeOH]

3 minutes ago, Parker_Woodruff said:

It looks like they're also going after a product liability judgment.

I wonder how much is a fishing expedition.

https://www.yahoo.com/news/family-sues-plane-company-fatal-035501952.html

 

Hmm, that sounds entirely possible.  Looks like a mobile home and a car wiped out with no one home.  My opinion could change based on how much AIG offered...if they offered up enough to buy a new mobile home, belongings, and car, plus some for displacement costs (hotel, food, etc) that would seem fair.  Start talking PL, and 'pain and suffering' when you weren't even there and my sympathy is gone.  I detest lawyer 'fishing expeditions'.

[1980Mooney]

14 hours ago, MikeOH said:

Hmm, that sounds entirely possible.  Looks like a mobile home and a car wiped out with no one home.  My opinion could change based on how much AIG offered...if they offered up enough to buy a new mobile home, belongings, and car, plus some for displacement costs (hotel, food, etc) that would seem fair.  Start talking PL, and 'pain and suffering' when you weren't even there and my sympathy is gone.  I detest lawyer 'fishing expeditions'.

I bet  if they had "offered up enough to buy a new mobile home, etc" that this would have been solved a year ago without a lawyer ever getting involved by the homeowner. The accident was tragic and luckily no-one was at home or they would have likely perished also.  But look at what appears to be happening - how it looks to the home-owner and also the community

• The estate of the late good doctor, (who was a wealthy "renowned plastic surgeon in Los Angeles", his FAA address is a spectacular Beverly Hills home that recently sold for $16 million) is hiding behind a mysterious plane co-owner named "Biplane Co" (which may turn out to be owned by the estate of the late doctor)
• The supposed "co-owner" is hiding behind AIG.
• AIG is hiding behind lawyers
• The home-owner is not getting replacement value after a year of dickering.
• She has hired a local attorney now.

Remember this is New Mexico.  I grew up there and have passed the vicinity of the crash site many times over the decades.  A lot of residents just scrape by.  In this case the homeowner is a 37 year old single mother of 2 kids.  Apparently she works at local New Mexico based Century Bank.  Her co-workers set up a GoFundMe page.

https://www.gofundme.com/f/miquella-benavidez-and-children

She owns an incredibly modest home on perpetually barren land southwest of the Santa Fe horse-track and not far from noisy Interstate 25. (only a couple hundred feet from the frontage road).   Her home is (was) a double-wide mobile (manufactured) home on land adjacent to her parents.  The Santa Fe County values her home at a whopping $132,000 on land valued at $102,000.  You can see that the crash burned up her pickup truck also.

She may not have carried much insurance on the mobile home or truck.  But she did not destroy them.   The pilot/owner of N5251C trespassed on her property and destroyed them. The amount of money that could come from AIG and/or the doctor's estate to make this right would not be large.  I bet $200k could have fixed everything up if they had been reasonable and forthcoming early on. Yet it does not seem to be happening.

If AIG will not make her whole, then she has no recourse except to sue.

This gives aircraft owners and pilots a bad name.  We certainly look like a bunch of wealthy entitled greedy bastards that are not responsible for our actions.  And everyone wonders why community support for GA is declining.  It is crap like this.

As @Parker_Woodruff said above, maybe this is a fishing expedition by a less aviation experienced local attorney.  But as it gets more visibility it may invite more aggressive and knowledgeable legal talent.  That is how these crazy lawsuits and wild settlements get started.  Remember that there will be no sympathy by local residents for the California doctor or AIG.  Local long-time residents, like the homeowner and her parents, generally blame outsiders, like all the "beautiful people" that come to Santa Fe, for driving up living costs making it impossible to live close to the city center instead on these dirt lots that they can barely afford.

And if AIG had made a reasonable settlement all this would never have gotten this far and would be over.

 

 

 

 

Edited August 27 by 1980Mooney

[Pinecone]

We don't know how much was offered.  She may have been offered $200K or even more, but felt she could get a lot more.

Too many people today think a mishap like this is the ticket to riches.

[1980Mooney]

1 hour ago, Pinecone said:

We don't know how much was offered.  She may have been offered $200K or even more, but felt she could get a lot more.

Too many people today think a mishap like this is the ticket to riches.

Her previous comments were not for pain and suffering nor punitive.  She just wanted what she had replaced.  That is when the insurance company should have made her replacement whole.  Her home loses, although total, were extremely modest in absolute numbers compared to most that are able to own a plane.  There are probably members here that have spent more on a hangar.

So as pilots we wish to flip the narrative. It is not the wealthy estate, nor the insurance companies, lawyers or shareholders (private equity) that are greedy.  It is the victims. 

It is like a fire - use whatever it takes immediately to put it out fully before it is a raging inferno.  This is why these things blow up into ridiculous lawsuits and settlements. 

 

[MikeOH]

@1980Mooney

I agree with all of your points.  But the fact remains, as @Pinecone pointed out, that we do NOT know what AIG offered up.  I reserve my judgement on who is taking advantage of whom until I know what the dollar figure was.  You seem to assume AIG 'lowballed' their offer when we really don't know that.

[Ron McBride]

The responsible pilot, party’s or estate may want to contact an attorney that specializes in insurance to protect their interests.   I had to do this once, it was amazing what the insurance company was doing.   The $5,000.00 was well spent.  

[Aviator]

On 8/16/2024 at 6:08 PM, Parker_Woodruff said:

I've been able to quote liability only through Global for my entire agent career but I suspect they might be allowing a greater age range than previously indicated.

I'll check with an underwriter there.

Global has been a consistent underwriting company as long as the pilots are "in" before a certain age.

Global is my most common carrier when an aircraft owner wants liability only.

Any response from the Global underwriters?

Thanks 

[Parker_Woodruff]

4 hours ago, Aviator said:

Any response from the Global underwriters?

Thanks 

Yes, more to come.