Premium Increases, still?
If you have been following the aviation insurance market (or received your recent aircraft insurance renewal) you probably noticed premium increases. We have been telling people 30 to 300 percent. That might sound steep, but we have seen some very big increases.
But don’t take it personal. It is an “across the board” increase. Even the Cessna 172’s and Cherokees are going up, just not as much as the experimental or retractable gear aircraft.
Reasons? I have heard everything from, repair parts availability, losses, hurricanes, fires, tornados, Boeing, age of pilots, the cost of automation, reinsurance and more. The list can go on depending on who you talk to. But the result is the same: premiums are going up; limits are going down and underwriting is becoming more stringent.
We have seen a large number of companies decline to quote new business based on; pilot age over 69 years, type of aircraft, age of the aircraft and more. Plus, there is one company out there that has been cancelling policies they don’t want anymore. Many are old pilots in higher performance aircraft which is putting those people in a spot. Now they are at an age and in an aircraft that the other companies will not quote.
It seems bad, but I have seen rates like this before. I’ve been in the business long enough to see the ups and downs in rates. There was a time when most companies had minimum premiums over $1,000. And yes rates are up, but today you can still get liability only for some aircraft for around $300.
Anyway, rates are still going up. But compared to most automotive policies the rates are low. If you compare the hull values (and they are agreed values not actual cost settlements) and the limit of liability (usually a $1 million limit) aviation is very competitive to automotive.
What can you do? Keep flying. Hours help. Fly a simple, fixed, tri-gear certified aircraft. They still have the best rates. If not expect to pay more. You can always lower the hull value, change to ground not in motion or eliminate the hull coverage all together and have liability only. There are a few options to discuss. Don’t let you current insurance expire, especially if you are over 69 years old or have an unusual or old complex aircraft. Once you expire, you become “new business” and they do not have to take you back.
And you can not compare your rates to anyone else. Depending when your friend bought their insurance, even with the increases they might pay less than you. And they would have to be identical to you with the same location, same age, same hours, same ratings etc…
One good thing is aviation underwriting does not use credit ratings to calculate rates like auto and homeowners. And they don’t check motor vehicle driver reports and use that as a factor in aviation insurance. At least not yet.