Picking Amount of Hull Insurance

[mooneyflyer]

I have no idea what to insure my 1999 M20S for? I don’t really know what it would sell for? What are the pros/cons if I under and if I over insure the hull?

[Coachella Bravo]

Here's a CON for under insuring hull value.  I was extremely upset upon turning the magic age of 70 to find my insurance had skyrocketed.  Having flown 38 yrs w/o and incident,including 20 exclusively Mooney, I figured what the heck and reduced my hull to approx 1/2 actual value.  Well, 2+ yrs ago I did a gear up, and after all was said and done, I ended up contributing a very substantial amount to its reconstruction.  So . . . under insure with a great deal of caution.

 wishing CAVU to all

[McMooney]

this day and age, they'll take your plane and write you a check if you under insure, i'd just find a few on trade-a-plane and pick an avg price for your model

[Parker_Woodruff]

What would it cost for you to replace it with one of like kind and quality, including sales tax?

[Hank]

1 hour ago, mooneyflyer said:

I have no idea what to insure my 1999 M20S for? I don’t really know what it would sell for? What are the pros/cons if I under and if I over insure the hull?

Talk to your broker, there may be steps in value that incur significant increases in premiums. Then you'll just need to decide to stay below that value, or go over it at higher rates. @Parker_Woodruff was able to raise my hull value last year due to rising valuations for no change in premium. Thanks, Parker!

[IvanP]

One potential drawback of overinsuring, aside from high premium, may be that in the event of a mishap you may essentially be forced to repair plane that you may no longer want to keep. If you insure your Eagle for 1 mil (assuming someone would write such policy) and have a mishap that is not bad enough for the plane to be scrapped, the insurance will probably not total it and give you 1MM check. They will likely tell you to get it fixed which may take very long time in the curent world of part shortages, etc.  

On the other hand, slightly underinsured craft may be totalled by the insurance and you can go buy another plane. Granted, you will have to add some money, but you will not have to deal with the repairs and frustration of hunting down parts, etc.

[AJ88V]

It appears AOPA is no longer making Vref for free, but might still be worth checking into

https://vref.com/aircraft-appraisals

[PT20J]

Talk to Jimmy Garrison at GMax. He can tell you what it’s worth. Insure for what @Parker_Woodruff said.

[Pinecone]

There are two values.

1)  What you could sell it for today.

2)  What it would cost for you replace it as it sits (engine time, avionics, paint, interior).  

They are likely not the same.

[A64Pilot]

I witnessed an older guy that insured his Maule for what he had paid for it years ago and just kept renewing the insurance. One day he ground looped or something collapsing a gear. No expensive damage and Maule had the parts in stock, and Maule parts are cheap. Easy fix, so he turned it into insurance expecting them of course to pay for it to be fixed, that is why he had been paying for it all those years.

Insurance wrote him a check and sold his airplane for more than they wrote the check for, I know because I know who bought it, who repaired it and the original owner bought it from him, after of course having to put quite a lot of his own money into the amount insurance gave him. He isn’t insured now.

My advice is to insure it for what you could live with getting for it, forget what somebody says it’s worth, because that number is variable based of course on current market, that by the way I believe is softer than it was just a few years ago

Edited September 14, 2024 by A64Pilot

[A64Pilot]

I insured my airplane for what I paid for it, just as the Pandemic was winding down, within about a year I was underinsured, now I think I may be a little over insured, but probably not when you factor in the 20% of so of transitory inflation.