Peter wrote:
I don’t understand why insurance companies in GA don’t usually work internationally.
Some of them simply hesitate to involve in country with uncertain legislation. Some of them are clueless about their business. I have example from Croatia where major local insurance company doesn’t want to insure EASA-reg aircraft registered in other country than Croatia, regardless the fact that owner is a Croatian company. Their decision doesn’t have any grounds in any law – they simply don’t want. Being aware of that, their competitors increased their prices for 50% or more. Then I switched to international insurer and got the same price I had before this price increase. This year I got additional discount because I signed contract for 2 years and I got guaranteed price in EUR for next year.
Not that many years ago I worked in a large aviation insurance office (who will remain nameless!). They provide GA insurance for light (piston), “normal” bizjets and BIG bizjets (think 777 biz jet!). Each of these segments had their own issues. On the light piston side, they provid(ed?) cover into the UK market through third parties and consistently lost money. I don’t know whether this was due to high costs or otherwise, I wasn’t that closely involved. One of the issues on international light GA is insurance regulation. Even if the insured is in the EU (say France) then another EU insurer (say Germany) will have to meet French (and Dutch, Croatian, etc.) regulations for consumer insurance. This is a real PITA for an insurance company as there are Complain Procedures, policy language requirements and local legal issues. All of this is to protect an uninformed insurance buyer (think motor insurance) from big, bad insurance companies. So insurance companies, certainly within the EU, CAN issue policies across borders it is just a lot of effort, and sometimes its just not worth it.
As said, this was a few years ago and I was only loosely connected with it so don’t take this as gospel but more of a flavor as to what the issues are.
fuel 15k, maintenance 7k, insurance 6k, hangar 4k
Similar for me, but maintenance more like 3-4k (not using a company → 2x saving, for same or better work done), insurance ~2k.
That said, my 195k hull cover would not cover the replacement of the plane. I get a feeling my TB20 is now worth 250k-300k € !!!!! I always regarded it as worth 150k, for most of the 20 years.
But, as the old saying goes, you should never insure something you can afford to replace, because, to argue otherwise, is arguing that insurers lose money, which is nonsense. So if you really cannot cover a shortfall between say 250k and 195k, then you need to insure for 250k, but then your flying career will end with the first significant incident… In a syndicate you must insure for the full current hull value otherwise the other members will crucify the one who had the incident 
But, as the old saying goes, you should never insure something you can afford to replace, because, to argue otherwise, is arguing that insurers lose money, which is nonsense
With that in mind I bought an inexpensive plane that isn’t understood by the market, keep about four times the amount I paid for my plane in cash reserve, and do not buy more insurance than I can justify. It’s a relief to me to avoid buying insurance when I can. At the moment I’m spending about $600 monthly on various kinds of insurance regardless, have been for years, and it’s been almost 100% lost to me. I hate doing it and dislike supporting the insurance industry, which is filled with low grade people doing low value work at a huge markup.
My concern with losing the plane would not be the financial aspect, it would be the time and effort required to find a replacement and sort out all the issues with a new-to-me plane.
Silvaire wrote:
My concern with losing the plane would not be the financial aspect, it would be the time and effort required to find a replacement and sort out all the issues with a new-to-me plane.
Mine too. I suspect it would take months of searching to find a satisfactory replacement – unless I did something like build a Eurofox, which would just trade that for months of building instead.
I work in insurance and I always recommend not buying insurance IF you can afford the loss. In general, and this does vary a lot, insurers typically pay out 60% (in the range 25 – 110%) of premium in claims, so in the long run you will not get back in claims what you pay in premiums. The big kicker are the costs. I have seen brokerage & taxes & fees amounting to 45% of premium. Generally the lower the premium the higher the percentage costs. So guess how much of the $2.50 premium on your latest gadget flows back as claims!
Ibra wrote:
Any reason why one should insure their aircraft to the actual market value? if one is sole outright owner and sole pilot flying, they should be happy to take some of the loss and could insure less, say 70% of hull-value?
Very true, and one could argue that a total-loss is not that likely, and even argue that a total-loss may also mean a total-loss of one’s body, so who cares.. But the risk of damage not being a total-loss is bigger and AIUI the insurer will only pay out the amount of the damage proportional to the ‘agreed value vs actual value’.
We have done this bit before but I think “UK type agreed value cover” is not available in most/all other countries.
Here, I would get 195k paid out on a total loss, regardless of market value. You cannot get this type of cover on most stuff because it obviously encourages fraud.
However, with agreed value cover, there is an incentive, in case of a partial loss, for the insurer to behave disreputably and spend an unlimited amount of time getting the plane repaired. According to people in the insurance business, this has happened. So you can get grounded for a year while they are waiting for parts/etc, and you get no payout, ever.
“I don’t understand why insurance companies in GA don’t usually work internationally.”
I think the insurance companies do work internationally, but through national brokers.
Neil_F wrote:
I work in insurance and I always recommend not buying insurance
True but I think there are exceptions. The insurance companies seem to be bad at really getting the risk profile right or they simply do not care for better marketing. Secondary rental car insurance seems to cost the same no matter where the car is rented. But I assume some locations due to horrible roads etc. probably have a 10x higher probability of having claims. I never get such car insurance in northern countries but did in the south and that worked out quite well. The same for car break down insurance. Over here they charge you a fixed amount no matter what car you have and for vintage car owners it seems to be the best deal ever ;-)
For aviation I feel about 1% of hull value is rather fair. If I think about how many expensive claims I have seen and heard about I am not sure they make a huge profit on this.
