How to Choose the Right Aviation Insurance Broker
Navigating the current US aviation insurance market can be a real challenge for private aircraft owners. We’re here to help.
Insurance considerations are regularly overlooked until that unforeseen, unanticipated, and unlikely accident occurs. As a pilot, I assume I’ll never have an accident and that’s probably true as most people don’t have accidents in their aircraft. Yet as an aviation insurance brokerage, we deal with aviation accidents frequently. Each accident is different, from stolen aircraft, to minor runway excursions, or a CFI error during a BFR. Accidents are a rare but regular occurrence. As an owner of a private aircraft, insurance should be a critical consideration to ensure that you are protected in case of any unforeseen event. With the current state of the aviation insurance market in the USA, finding the right coverage at a reasonable price is easy. It’s finding a capable insurance broker that’s difficult. In this blog post, we'll take a closer look at what you should know when making a choice.
The state of the aviation insurance market.
The aviation insurance market in the USA is fluid in nature. Your premiums, limits of liability, training requirements, minimum flight experience, location, your age, destinations, the aircraft’s hull value, etc. all play into the underwriting process of providing you an insurance policy. And these factors are constantly in motion.
Working with an experienced insurance broker that understands aviation and is well respected within the aviation insurance ecosystem is essential in protecting yourself and your aircraft. A competent broker can help you understand what your options are so you can make an informed decision based on your personal tolerance for risk.
Because the cost of insurance is always a primary concern for most buyers, it’s important to understand that premiums are a function of two factors:
1) Capacity, or competition
2) The cost of claims
Competition for your business keeps premiums in check, as competition increases the insurance companies are under more pressure to price their products competitively. Unfortunately, the cost of claims continue to rise as inflation has driven the cost to repair aircraft up significantly and defense costs related to lawsuits continue to increase beyond standard rates of inflation. Currently, we have both factors in play and insurance companies are being forced to write business at a premium below a level they believe to be adequate or risk losing your business to a competitor.
Tips for finding the right aviation insurance.
If you're a private aircraft owner, finding the right insurance coverage is easy but finding a capable broker is difficult. Here are some tips to help you make the right choice:
Work with an experienced insurance broker: an experienced aviation insurance broker can help you navigate the market and find the right coverage at a reasonable price. They can also provide advice on what types of coverage are necessary for your specific needs.
Ask your broker what your options are. With the increasing competition in the aviation insurance market, it's more important than ever to see competitive quotes from multiple insurance providers. But don’t just use price alone as your deciding factor. At minimum, consider the carrier’s longevity in the marketplace, claims handling abilities, and policy wording along with price when making a decision.
Review your coverage and understand the policy’s exclusions. As your needs change (such as your net worth & your aircraft value), it's important to review your insurance coverage regularly to ensure that you are adequately protected. Know the market value of your aircraft and insure for that value - consider the amount necessary to replace the aircraft if totaled. Also consider the limits of liability you are purchasing, is that limit adequate to protect you in a worse case scenario? If not, be sure to ask your broker if higher limits are available or if an excess liability policy is worth considering.
Final thought.
The current aviation insurance market in the USA is complex and rapidly changing. As a private aircraft owner, it's important to stay informed about the latest trends and developments in the market. By working with an experienced insurance broker, you can feel confident about the coverage purchased to adequately protect you and your aircraft.