Have you renewed your aircraft insurance recently? Did the rate increase even though you’ve had no recent claims? If so, you’re not alone.
Thanks to a variety of factors, rates on aircraft insurance are rising anywhere from 5 to 15 percent for most customers, according to Dale Barnard of Gallagher, Twin Commander Aircraft’s insurance partner. There are numerous factors impacting the rates, including loss history, pilot experience, and underwriters leaving the market.
Both Barnard and Greg Reba, an independent broker with extensive Twin Commander experience, said that about 18 months ago the underwriters told brokers that rates would be increasing across the board. Because they had been steadily declining for years, there was a feeling among underwriters that it was time to recoup losses and readjust the market. Barnard said the Twin Commander fleet has a very low loss history but less experienced pilots are moving into the fleet, among other factors.
Combine those factors with a few high-profile underwriters simply refusing to offer new business to owner-operators, and you have an insurance market that is becoming more and more difficult.
Aircraft insurance underwriting isn’t like automobiles. In the auto market millions of drivers and automobiles means that a detailed statistical analysis that enables an underwriter to predict risk based on demographics, geography, type of car, and more is easy to come by. In aviation the relatively few number of aircraft means an underwriter works off personal aspects of the pilot, the operation, and his or her feelings on the market. That can lead a company to exit a market or refuse to write to a potential customer based as much on gut feeling or personal comfort as any sort of statistical risk. Both Reba and Barnard said part of what is driving up rates and leading to a number of underwriters declining to insure new owners is that experienced underwriters are retiring and their replacements are either unaware of the risk or unwilling to assume it.
So what can you do about it? First, expect an increase and don’t immediately jump companies if you receive one. Second, if you’re having trouble finding coverage or want to do some shopping, go to a broker who knows Twin Commanders and who you’re certain will be an advocate for you. Brokers talk to the underwriters and are in the best position to find the coverage you need.
You can reach Gallagher’s Dale Barnard at [email protected]
