Frequently Asked Questions about Aviation Insurance and the Aviation Insurance marketplace...
Why insurance companies will only release one quote to one broker.
The reasons why most insurance companies will only release one quote to which ever agent you choose to represent you is first and foremost to save on overhead costs. To quote the same risk to five different agents means they have to review/underwrite and ask questions to five different agents. If an insurance company weren’t automated then this would require many more employees to process.
A second reason is for double quoting. A lot of aviation policies are still quoted by individual underwriters who use their judgment, experience and a rating manual to determine the rates charged on your account. If five different agents approached different underwriters at the same company there is a very likely possibility that the quotes received would be different.
What does this mean for you?
It means you should choose an agent that will represent you in the best way possible as calling five or six different agents will not result in the insurance companies offering multiple quotes at different premiums. This is not car insurance when there are hundreds of insurance companies fighting for marketshare. There are only nine companies left and they will only work with one agent as respects your aviation insurance needs. .
What are sublimits and what are combined single limits?
When you purchase liability there are a number of different limits that can be available to you but there are two types that are most commonly used. They are Combined Single Limit (CSL) and Combined Single Limit with a per passenger or per person sub limit.
The Combined Single Limit type is the broadest coverage you can purchase. The limit of liability (usually offered in increments of 1 million dollars for piston aircraft and varying increments for turbine aircraft) is not divided into smaller limits based on a per passenger or a per person basis.
**** An example would be if you purchased a one million dollar liability policy for your protection in the use of your aircraft and your engine failed which resulted in an off airport landing that was not very successful. Your passenger was injured in the landing attempt and needs medical treatment. With a Combined Single Limit policy without a sub limit the entire one million dollars could be made available to your passenger for indemnification.****
The second common type of liability limit is the Combined Single Limit (CSL) with a sub limit. These policies will limit the CSL to a smaller amount on a per passenger or a per person basis. The sub limits for piston aircraft are usually limited to $100,000, $250,000 and sometimes $500,000 per passenger or per person, for turbine aircraft they can start at $100,000 per passenger and go up into the multiple millions of dollars on a per passenger basis.
**** An example would be if you purchased that same one million dollar liability policy in the example above but decided to purchase the liability with a sub limit of $100,000 per passenger than the maximum amount that could be available to your passenger for their indemnification would be $100,000. The other $900,000 would only be available to other passengers that might have been injured ($100,000 maximum for each injured passenger) or to property damage or bodily injury to someone or something on the ground.****
What is the difference between per passenger and per person sublimits?
The difference between the two is that a per passenger sub limit on your liability limit will only pertain to passengers as respects your aircraft. The per person sub limit pertains to anyone you may have a legal obligation to. To simplify, if you injured someone on the ground with your aircraft and you purchased a per passenger sub limit then your entire liability limit could be made available to that injured party on the ground.
****That same example used above with a per person sub limit than the injured party on the ground would only be indemnified up to the sub limit you purchased. Anything above and beyond that limit would be your financial responsibility.****
How can I lower my premium?
This question is one that is not easily answered without knowing what we are starting with but this can be generally answered by:
1. Accumulate more accident free hours
2. Get your instrument rating
3. Get advanced ratings and certificates
4. Do yearly recurrent training and make sure the insurance company knows about it.
All the above relate to pilot qualifications. Additional items that can help lowering your premium:
1. Hangar your aircraft
2. Make sure you are insuring the aircraft for the proper value. Your aircraft may have depreciated or appreciated.
Why can't I insure my aircraft only for the amount that I owe on it?
There are a couple of reasons why most insurance companies do not like to underinsure aircraft. First and foremost you do not want to underinsure your aircraft because aircraft policies are written on an agreed value basis. If your aircraft was damaged and you turned in a loss the insurance company would use your agreed value in determining if it is a total loss. This is an important point. If you own an aircraft worth $100,000 and you insure it for $40,000. and the gear collapse on rollout. The insurance company would get estimates and if the estimates were high enough then they have the option of totaling your aircraft, paying your $40,000. agreed value and then take possession of your aircraft and reselling it. Under this scenario you would not be indemnified for the full $100,000. value of the aircraft but only the $40,000 that you bought coverage for. You are in essence self insuring the other $60,000. Total loss is not based on market value but on agreed value and is defined in every policy.
One last issue with underinsuring your aircraft is that some policies do not give you the first right of recovery.
A second reason is that the insurance company will not be getting the premium volume they need in order to cover partial losses. Most claims do not involve a totaled aircraft but they do require the premium dollars to fix the partially damaged aircraft back to like, kind and quality before the damage occurred. .
| 
