Wings, Wheels and Water

Expanding our specialty lines.

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We are working on expanding the special lines side of our insurance business. Not that aviation is not a special lines of insurance, but I am personally involved in more than just that. I have always been involved with cars, boats, planes and motorcycles….why stop at aviation.

We are able to quote and insure:
Custom and stock motorcycles
Custom and modified cars and trucks
Recreational vehicles
All types of boats (power, fishing, sailing)
Personal watercraft

Call or send me a note to see if we can save you money on your insurance. We use a couple of top rated companies that specialize in just the special lines insurance market.

Good time to buy?

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It is definitely a buyers market. Yes, the market is slow, but if you have cash or credit, you have some tremendous buying opportunities.

I think that many of the aircraft advertised are over priced. I would assume that many of the sellers purchased their aircraft over the past few years when we were having tremendous growth in the market (aviation and stock) and now that both markets have stopped growing, the sellers are reluctant to lower their prices for a sale and risk losing money.

The Vref base value takes into account the average number of hours that the aircraft should have on the airframe and engine at the time of sale. The base price also includes a standard radio package for the model and an average condition. That is probably representative of over 75 percent of the aircraft on the market. So the base price is probably representative of over 75 percent of the aircraft for sale. Sure, you can add for low engine time and low airframe, but it all seems to balance back towards the base price. A plane with a low total time, say 1,500 hours, will get an increase in value for the hours. But if the engine has 1,500 hours on it also (and a 2,000 TBO) the book will reduce the value for the engine hours over the halfway point of 1,000 hours. Typically, the value of the engine per hour is higher than the airframe per hours.

Of course, if you have an aircraft that is loaded with all kinds of fancy modifications or avionics, the price will probably not be close to the base book values. But on the average, basic book values are pretty close.

Pressurized twins, no instrument, liability only and more.

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I had a great question from a customer and thought it would be good to share the response. The customer is interested in buying a pressurized twin engine aircraft but is not instrument rated.

Just buying liability alone does not change the requirements for the instrument rating. The insurance underwriters are at risk of a claim anytime you strap into the pilot seat. The reasoning that a liability policy has less risk is not accurate. There is as much or more risk for the insurance company than the cost of the aircraft. At least if you crash the aircraft they have a set dollar amount they would pay out to your estate. If you insure the plane for $100,000 that’s the maximum they will pay (minus any deductibles).

But with liability, if there is a liability issue such as a non-instrument pilot getting caught in bad weather or at night and crashing, that pilot then becomes labile for any property damage or bodily injury that results. That could end up in court and the settlement could be more than the policy limits. That affects the pilots estate and the insurance company and it doesn’t matter what the pilot promised or planned on doing, the risk for the insurance company is still there.

Also, the concept behind a pressurized aircraft is to provide more comfort at higher altitudes. Even if you do not plan on flying at night or in clouds the risk of a pressurized aircraft and going cross country could put you in a situation where you may need the instrument. Most accidents are still pilot error and often VFR flight into IMC….

Now, all that said, I am a perfect example of what not to do. I have been a pilot since high school, married into an aircraft family and I am single and multi rated….but not instrument. Been in it, don’t like it, wouldn’t stay proficient enough. Not being instrument rated helped to push me out of aircraft brokerage and sales. Most of my brokerage aircraft were Skymasters. I couldn’t get named on some of the policies because of the IFR issue. So I know where you are coming from.

We have and still do get insurance for non instrument pilots in twins and pressurized aircraft. Sometimes it is based on your location and the typical weather and traffic situations, Dense air traffic areas often require an instrument. Places as the LA area or say NY. While in my case here in Central Iowa it might not be as important. Or say Florida, while having lots of air traffic also has lots of sunshine.

And the weird thing is that even if you have the instrument, it doesn’t mean you will use it. The only way the insurance companies try to manage that is they require factory approved training and Instrument proficiency checks in the make and model.