Primarily for general aviation discussion, but other aviation topics are also welcome.
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By PeteSpencer
#1816790
4535jacks wrote:Glad I found this thread. I have just had a quote from Visicover who we have been with for the past 2 years and our premium has gone up from £1330 to £1850. So I will try the LAA insurance and FlyCovered.


Also try Traffords, who have been our insurers for 15+ years until this year but even after offering a discount still couldn't match Flycovered.

They (Traffords) are a great company full of real people and have a proven track record having fixed us up with a £34k pay out 11 years ago.
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By PeterMa
#1816846
Insurance has gone up as despite everyone being an expert as 'there can't have been many claims' etc etc..... aviation insurers haven't actually made any money for years now. Insurers make money by reinsurance and by investing premium left-over. Reinsurance rates are up 40 to 60%.....investment returns are poor.... so...the price has to go up.

Each line of an insurers business is now being forced to be self sufficient. Lots of insurers have come out of the market as they were never going to compete on cost with visicover.

This leaves a few left charging higher premiums ( as they to have an actual business trying to make a profit) and I feel visicover quickly catching up..... be keen to see Bob's view of this.....
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By Miscellaneous
#1816849
Interesting post @PeterMa. I understand what you say, however I'm struggling to rationalise it.

As I posted elswhere on the forum, I have recent experience of an aircraft renewal being significantly more expensive than the same cover for the new owner. The only two differences being the new owner himself and the new location. Neither of those factors I would have thought justifies several hundered difference. That causes me to question your position.

It also seems we have been hearing the same story for the last few years, (I'm not suggesting the premiums have caught up), I was surprised at my own increase earlier this year. Am I likely to face a similar increase in the next few months at renewal? :(

Another way of looking at it from a pilot's point of view is that insurance, particualry this year, is running at a higher hourly rate, for many, than the cost of running the aeroplane. Take the £1800 quote above, at 36hrs in the year that's £50 an hour. :shock: I'd guess there will probably be more closer to 18hrs flight during 2020. Can you shed any light on how the premiums are calculated from a business perspective? I'd be really interested in how somewhere between £50 & £100 ph can be seen as risk related. Is it mostly about admin costs? Thanks. :thumright:
By PeterMa
#1816963
There is no magic formula for premium rates between types . I tend to only deal at the higher value stuff now ( So £600k aircraft value upwards) .

Type is important - a 'routine' SEP type with easy to source parts & a known engine is always cheaper than a rare type - not only easier to get parts , but on a rare type if parts are expensive then its more likely ( for the same hull value ) it may be written off. = increased risk.

Make & model hours - there have been a rash of accidents where high hours ( ATPL types) have claims due to unfamiliarity on type ( example I was flying with a Virgin 747 Capt in a Cub once - but he kept rounding out at a few hundred feet as his mental picture told him that's what to do - instead of keep flying for another 150 ft !) Equally a ex Reds pilot who openly admitted flying a C42 was an entire new challenge to fast jets or phantoms onto a carrier ! It dates the conversation to a few years ago - but I'm sure you can see what I mean)

In your example comparing pilots is always a tough call - ages , hours on M&M and even which insurer you deal with all have an impact .

Lastly in simple terms - the cost - of every £100 you spend - maybe 10-25% goes to a broker ( if you use one) . Then the insurer has their costs ( staff / admin/ regulation etc ) , then they pay to 'reinsure' the risk - so at the end of the day the actual ' profit' is much smaller than most think .

After all this you have a claim . A 'simple' prop strike ( common claim) in an SEP is a headline cost of maybe 25K ( give or take complexity - engine out , shock load test' prop , re-install ) - but on top of that there is always a loss adjuster dealing with ( Mclarens are common & known & very good at it ) who charge a fee - so if a 'simple' properly damage claim is maybe to up £30k now - and what about the damaged runway - throw in a few K for that - so now maybe £35k …….

This is a simple claim - no one injured , no expensive aircraft written off , no fuel contaminating the soil etc . If our simple claim is a £1000 a year PA28 - then that's at least 35 other aircraft premium wiped out - in fact more than that as of the £1000 - £200 went to a broker ( like me ) - another £200 for insurer costs - so now its £600 left over - so in fact £35k is 58 other aircraft paying £1000 a year all used up .

How many aircraft are at your base ? - Possibly NOT 58 ? But a 'simple' & 'cheap' claim has wiped out your entire fields aircraft premium - maybe your & 2 other fields ……… so when a cirrus goes for a swim & its a £250k hull - how many aircraft is that ! ?

A look through the AAIB reports quickly adds up to a HUGE amount in cost every year for several years ( and they are just the reported ones - lots more go unpublished ) ……

Throw in a fatality or two ( of which there were several years of a bad run - one year I had 12 people die in aircraft just I looked after ) - and that's a few more million in legal costs and payments ….. and the numbers get even worse …. :(

So in summary yes its got to go up - insurers seemed to get themselves to a point in the last few years where they charged as little as they could get away with to get the business - knowing if a claim came in if they charged £1500 or £1000 it is the same result - a substantial loss :( .

The hours flown view is interesting as your aircraft is insured 24 hours a day , 365 days a year - if it flies or doesn't its insured. Insurers have a 'minimum premium' they can charge to allow for this & cover their fixed costs - so flying less hours can be cheaper to a point - but.... we all know if you don't fly things corrode... pilots skills fade & judgement isn't as good . Pilots push their limits as they want stay current etc - so less hours flown can actually be MORE risk for the hours that are flown .

All this in routine flying - get into anything 'interesting' ( read higher risk) and its hard times in paying .
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By Miscellaneous
#1817018
@PeterMa thanks for the comprehensive repsonse. There's not a lot to disagree with, nevertheless I remain a little cynical. There are still a few niggles.

Clearly an aerolpane remains on ground cover whether flown or not, however the associated risk does not neccessarily reflect the premium. Clearly too few hours flying is not good for pilot or aeroplane, however I find it difficut to comprehend how somone flying , say 50hrs, is a comparable risk with someone flying 300hrs. Whilst I dislike comparisons with the motor industry they seem to ackowledge the more time driving the greater the liklihood of an incident. Seems to me the people ar Flycovered are recognising that fact? :D

Regarding my example. Same actual aeroplane, same insurer, 2 pilots, one existing plus new compared to two existing, hours and ages of existing and new owner comparable. Premium for new owner, who is also new to the insurer £5nn, renewal premium for the same cover for existing policy, £9nn. I'm afraid that sort of difference leaves many questions unanswered. :wink:

Thanks again. :thumright:
By GAFlyer4Fun
#1817125
Miscellaneous wrote:..
Another way of looking at it from a pilot's point of view is that insurance, particualry this year, is running at a higher hourly rate, for many, than the cost of running the aeroplane.


A lot of motorists have done a lot less driving this year due to covid restrictions and could make a similar analogy where the insurance renewal premiums have not changed much or have gone up.
I doubt many motorists can be bothered to work out there total motoring costs per mile though.

If due to unexpected circumstances an aircraft does not fly for a full year, its insurance costs need to be covered by the monthly income to the owner/syndicate. Therefore changes to insurance have no impact on the hourly rate if the owner/syndicate properly splits costs between monthly and hourly fees! :wink:
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By PeteSpencer
#1817138
flybymike wrote:
A lot of motorists have done a lot less driving this year due to covid restrictions and could make a similar analogy where the insurance renewal premiums have not changed much or have gone up.


Admiral did actually give me a refund this year :wink:

https://www.admiral.com/about-us/stay-at-home-refund


I’ve signed up to a similar scheme with Direct Line -refund comes at next renewal We’ll see......,,,,,,,,,,,,,,,,, :wink:
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By Miscellaneous
#1817154
TheFarmer wrote:@Iceman has it spot on in his second post on the previous page.

If that is indeed the case it would suggest the industry prefers the higher flying premiums along with the claims, to ground cover without the claims. :wink: Thinking through the broker %age spread and implications of ground cover versus flying cover with associated claims. I'm beginning to wonder how much of the increase is broker margin versus insurance company increase? It's certainly the feel I have from my two experiences this year. Always happy to learn, however at 75% of the premium to take on the insurance risk versus a potential 25% 'admin fee' cut for the broker. :wink:

GAFlyer4Fun wrote:If due to unexpected circumstances an aircraft does not fly for a full year, its insurance costs need to be covered by the monthly income to the owner/syndicate. Therefore changes to insurance have no impact on the hourly rate if the owner/syndicate properly splits costs between monthly and hourly fees! :wink:

I think we may have our wires crossed here? My previous posts did not rleate to an hourly rental rate. :wink:
By ROG
#1817163
I"ve had a refund from Direct Line on both cars. They volunteered a refund--£15 and £10 --not much --but a surprise gesture--good PR.
I have stayed with our current aircraft insurer--mainly because terms are clear and straightforward.
I did try a couple of other insurers --but the amount of info, that they wanted was unbelievable--almost to what colour socks do you wear.
We"ve made one claim in the last 20 years on our aicraft --since I deal with admin--quite a big claim--a lot of detail on accident--but sorted finally without a big increase in premiums.
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By TheFarmer
#1817166
My farm insurance went from £4,600 in 2017, to £6,300 in 2018, to £8,900 in 2019.

I challenged the reasons for this based on the fact I’d made no claims, and my broker just said it was ‘industry norm’.

I have a new insurance broker now and the quote (that I accepted) was £5.200. I’m pretty sure it’ll go up by 25% next year, when I’ll go back to the first broker (or another different one) for a fresh start quote

It rarely seems to pay to be loyal to these people these days.
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By PeterMa
#1817213
Any comparison with vehicle insurance is pointless as its incomparable numbers ….. There are millions of cars on the road - all of which its known how long it talks to change a body part ( thanks to the industry paying for this up front via Thatcham etc ) and whose parts are easily orderable from any number ( hundreds !) of nationwide dealers & places to fit them .

Everyone has their own choice to make - but rest assured brokerage income has NOT increased at all . A brokers roles is NOT as most think it is - to find the cheapest cover - its to broker a deal that is acceptable to all parties - taking into account cost , cover , service, quality of insurer etc …… . If life was all about being cheap - no one would fly EVER.