A380 - VH-OQA Write Off.
Join Date: Nov 2004
Location: Perth - Western Australia
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Not a lot of people understand that the premiums involved in many types of insurance are mind-boggling. Many large companies self-insure where they calculate the premium is out of proportion to the risk involved.
As an example (but not specifically aviation-related), a friend owned a large hardware/clothing/mixed goods store in the country. Every once in a while, a gang would come through the small town, and indulge in break-in and theft.
After one such event, when he was cleaning up, I was talking to him and said... "Well, I guess your insurance will cover this, but it will put your premiums up?"
His answer? "I don't carry insurance on the stock. It's not worth it. The insurance company want too much, in relation to the value of the stock, for an annual premium.
I have $200,000 worth of stock here. I get broken into once every 2 or 3 years, and lose maybe $2000-3000 worth of goods. That amount is vastly less than the total of the premiums for the same period. It's a no-brainer".
As an example (but not specifically aviation-related), a friend owned a large hardware/clothing/mixed goods store in the country. Every once in a while, a gang would come through the small town, and indulge in break-in and theft.
After one such event, when he was cleaning up, I was talking to him and said... "Well, I guess your insurance will cover this, but it will put your premiums up?"
His answer? "I don't carry insurance on the stock. It's not worth it. The insurance company want too much, in relation to the value of the stock, for an annual premium.
I have $200,000 worth of stock here. I get broken into once every 2 or 3 years, and lose maybe $2000-3000 worth of goods. That amount is vastly less than the total of the premiums for the same period. It's a no-brainer".
How often will he have a total loss of all his stock by fire ? If the insurance premiums over a ten year period would pay for the stock and he has a total loss after eleven years then he's ahead, assuming he has invested the money he would have paid the insurer. Note if he's squandered the money instead he can kiss his business goodbye.
I prefer to insure against catastrophic losses and wear the occasional minor one. Eg with travel insurance I will be covered if I am run over by a car and need emergency evacuation totaling thousands. If I cut my hand and have a doctors bill for a couple of hundred dollars I'll pay it myself. Making small claims just isn't worth it as your premium will only go up the following year.
I prefer to insure against catastrophic losses and wear the occasional minor one. Eg with travel insurance I will be covered if I am run over by a car and need emergency evacuation totaling thousands. If I cut my hand and have a doctors bill for a couple of hundred dollars I'll pay it myself. Making small claims just isn't worth it as your premium will only go up the following year.
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The gent in question had comprehensive insurance against fire... he just didn't have insurance against theft. Lots of people just carry basic 3rd-party insurance on older vehicles, rather than comprehensive insurance, when they calculate their risk of total loss is low.
When a vehicle insurance premium is $700 annually for comprehensive insurance and $200 annually for 3rd party, you are going to be well in front after a few years, with a low value vehicle, that you deem to be at low risk.
I came across an old farmer in the early 1980's, who had had his entire wheat crop devastated by a hailstorm, just as it was ready to harvest. He'd lost about $200,000 worth of crop (in 1980 values).
When I discussed with him, how he'd go with insurance, he just stated blandly... "It wasn't insured, and I haven't insured a crop since 1934! I'm well in front! - rather than giving vast sums of money to rogue insurance companies, that always make more money than I do!!"
When a vehicle insurance premium is $700 annually for comprehensive insurance and $200 annually for 3rd party, you are going to be well in front after a few years, with a low value vehicle, that you deem to be at low risk.
I came across an old farmer in the early 1980's, who had had his entire wheat crop devastated by a hailstorm, just as it was ready to harvest. He'd lost about $200,000 worth of crop (in 1980 values).
When I discussed with him, how he'd go with insurance, he just stated blandly... "It wasn't insured, and I haven't insured a crop since 1934! I'm well in front! - rather than giving vast sums of money to rogue insurance companies, that always make more money than I do!!"
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I came across an old farmer in the early 1980's, who had had his entire wheat crop devastated by a hailstorm, just as it was ready to harvest. He'd lost about $200,000 worth of crop (in 1980 values).
However, perhaps the story goes more like this -
Maybe it was a little Irish farmer who used to use the term 'crop' in an endearing manner to refer to his crop of underlings and managers who have been harvesting great rewards while bleeding the farm dry and providing sub-standard produce as a result. Eventually the Irish farmer would stand down some of his tractor mechanics who reported faulty equipment to the farmer for safety reasons. Even the new state of the art tractors had serviceability issues. Nonetheless, the Irish farmer arrogantly removed the mechanics which further eroded the farms reputation for providing a safe consumable product which was now becoming even more shunned by the consumer.
The CSIRO's position on the matter is yet to be played out fully and the end of the story is yet to be written....
Back to my Jack Daniels.
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That's quite a clever farming/aviation parallel scenario you've drawn up there, Cactusjack. Have you been eavesdropping on certain management meetings? Are you in the employ of one Julian Assange, by any chance?
Let me ask this one last important question. Do you value your job in the aviation industry? You might want to rewrite that scenario, if you do.
Let me ask this one last important question. Do you value your job in the aviation industry? You might want to rewrite that scenario, if you do.
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That's quite a clever farming/aviation parallel scenario you've drawn up there, Cactusjack. Have you been eavesdropping on certain management meetings? Are you in the employ of one Julian Assange, by any chance?
As for poor Jules, that too is a negative and I don't work for that mischievous funster. However you never know if he may have a secret stash of 'intel' obtained from the Mascot archives, time will tell. I do like his taste in Swedes however...
Actually they are self insured in the above areas.
They self-insure Workers Compensation only.
Just the stamp duty alone on the aviation risk premium was around $5.14 million four or so years ago.
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heard about a week ago from a source over there,that Airbus are struggling to come up with repair schemes,17 holes alone in the fuel tanks.$20 k a day alone just to park up the aircraft in the singapore hangar.Looking very close to a write off.looks like i was wrong.
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If this goes on too much longer, I would imagine the insurer will start looking at a commercial write off, if only to limit their liability.
Now, how to get it out of WSSS ?????
Now, how to get it out of WSSS ?????
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Qantas does not self-insure its aircraft hulls. For a start it doesn't own all of them. Many are leased and I can assure you that lessors require 'real' insurance.
Self-insurance might be possible for wholly-owned aircraft, but if there is any financing of them I'm sure the financiers would not allow it.
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Originally Posted by Kangaroo Court
Believe it or not..it's probably going to be the best one they own after they're finished with it; can you imagine them doing anything less than a perfect job with the whole world watching?
I wonder if the whole left wing will have to be replaced?
I wonder if the whole left wing will have to be replaced?
Haha, that's gold Romulus!
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Qantas does not self-insure its aircraft hulls.
(OJH is the one they "parked" on the golf course in Bangkok)
Millet Fanger is correct. One insurer for $100K to $1 Million (in the case of the A380) and a group of insurers for amounts above that. First $100K is the Qantas excess.
A lot of misinformation on this thread.
MF, I think I went to Tech with you back in the early eighties. A little known aircraft called a "Millet Fangar" that would be periodically discussed?
A lot of misinformation on this thread.
MF, I think I went to Tech with you back in the early eighties. A little known aircraft called a "Millet Fangar" that would be periodically discussed?
Join Date: Feb 2006
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Quote from Romulus
"Now there's a job for Mark Arbib!!"
Obviously not a job for John Holland.
Well hello Romulus, long time no hear.
Please, pray tell us how would John Holland go about organising the repair job on the big bird had they been successful in getting the 380 maintenance gig.
I'm sick and tired of being sick and tired.
"Now there's a job for Mark Arbib!!"
Obviously not a job for John Holland.
Well hello Romulus, long time no hear.
Please, pray tell us how would John Holland go about organising the repair job on the big bird had they been successful in getting the 380 maintenance gig.
I'm sick and tired of being sick and tired.