Insurance
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Insurance
Hi All. Sorry I haven't posted for a long time- been getting my A Levels & job sorted!
Glad to see PPRune is as good as ever- especially like the Flying Videos thread.
What I wanted to ask you people (far more knowledgeable than myself!) was about insurance for general aviation aircraft. How does it work? Is it just the same as other insurance things, e.g. car insurance?
What sort of costs are involved? Is it a thousands of pounds a year type affair, or just a few hundred quid?
Thanks,
Louis
Glad to see PPRune is as good as ever- especially like the Flying Videos thread.
What I wanted to ask you people (far more knowledgeable than myself!) was about insurance for general aviation aircraft. How does it work? Is it just the same as other insurance things, e.g. car insurance?
What sort of costs are involved? Is it a thousands of pounds a year type affair, or just a few hundred quid?
Thanks,
Louis
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Whilst waiting for the learned community to provide chapter and verse, I'll jump in with a short answer.
Yes, it's a bit like car insurance. One can insure 'fully comp' or not, although the or not version tends to be 'ground risks only' which rather defeats the object of aircraft ownership (useful when refurbishing though, for example).
What you pay depends on your experience, what you intend to do in your machine, where you wish to do it and who might also be doing it as PIC - all pretty much like the car insurance you're familiar with.
I can't give you any idea about costs other than my own but if it helps, for a 1946 Champ, insured for two named and (allegedly) experienced pilots, the last premium was £758. This gives £1,500,000 legal liability to passengers and third parties & Crown Indemnity of £7,500,000, both of any one accident.
Permitted use: business and pleasure. Geographical limits: Europe, basically, but I could quote all six lines of countries listed, including the bit about North Africa 'North of 30 degrees North, West of 30 degrees East (excluding Libya)'.
Whilst one can shop around for quotations, the number of underwriters is very small.
Oh yes, some isurance policies insist on 'ten hours on type' beforehand, which I encountered when getting cover to fly my partner's Rans.
My own insurance company acknowledges total time, but oddly, perhaps, cares not one whit if it's tailwheel time.
I'm sure better answers will follow, but this might give you a starting point.
Yes, it's a bit like car insurance. One can insure 'fully comp' or not, although the or not version tends to be 'ground risks only' which rather defeats the object of aircraft ownership (useful when refurbishing though, for example).
What you pay depends on your experience, what you intend to do in your machine, where you wish to do it and who might also be doing it as PIC - all pretty much like the car insurance you're familiar with.
I can't give you any idea about costs other than my own but if it helps, for a 1946 Champ, insured for two named and (allegedly) experienced pilots, the last premium was £758. This gives £1,500,000 legal liability to passengers and third parties & Crown Indemnity of £7,500,000, both of any one accident.
Permitted use: business and pleasure. Geographical limits: Europe, basically, but I could quote all six lines of countries listed, including the bit about North Africa 'North of 30 degrees North, West of 30 degrees East (excluding Libya)'.
Whilst one can shop around for quotations, the number of underwriters is very small.
Oh yes, some isurance policies insist on 'ten hours on type' beforehand, which I encountered when getting cover to fly my partner's Rans.
My own insurance company acknowledges total time, but oddly, perhaps, cares not one whit if it's tailwheel time.
I'm sure better answers will follow, but this might give you a starting point.
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ChampChump you've upset me now .... that's £200 less than my recent renewal premium 
, for an identical aeroplane, on which I'm sole pilot ....
Woulds't be so kind as to e-mail me your insurers name, for next time ?????
Thanks and regards
Slip
, for an identical aeroplane, on which I'm sole pilot ....Woulds't be so kind as to e-mail me your insurers name, for next time ?????
Thanks and regards
Slip
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ChampChump thanks for the info there- very useful! The reason I ask about insurance is that I am considering starting up an insurance company for GA aircraft, flying clubs etc, and was wondering what sort of service they offer, and the levels of insurance that are available.
A bit of both worlds I think- I can be my own boss and be involved in aviation!
Only an idea at this stage, but all good stuff!
Many thanks,
Louis
A bit of both worlds I think- I can be my own boss and be involved in aviation!
Only an idea at this stage, but all good stuff!
Many thanks,
Louis
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This is meant kindly, Louis, honestly, but may well read otherwise owing to my lack of tact.
If you are thinking of starting a business, even an aviation related business, is this a good place for basic information? I hope you are rummaging elsewhere more appropriate to the business end of your plans as well!
I am all for encouraging enterprise, but you have two major things against you as far as I can tell: age and experience. True, there are exceptions to the first and you may have the art of a young Branson, but can you persuade the hard-nosed wrinklies who control finances that you have what it takes?
Experience: do you have any work experience in the insurance business? Would you consider serving some time to gain it? Many of those in the business are there as a result of branching out on their own after considerable time working for others. Would you have the contacts and credibility of your more experienced competition with their decades of dealing?
If you can produce all the business plans to give positives to those sort of questions, you still need to put yourself in the worn-out shoes of the impoverished customer. I can just about afford to fly an aeroplane which is the only one thing in my life that is almost irreplaceable - and because of the 'almost' I insure it, not just because it's now compulsory. (The other few things I value can't be replaced so insurance is n/a). I might be tempted to approach another company but it's not just about the premium.
I want a good deal, of course, but I also value reputation, experience and service. Loyalty also plays a part in ones dealings. Which means that there's an element of luck involved too: if I find a company I like, I'll probably stick with them.
It's a bit of a vicious circle, I know, but you are up against this sort of thinking. I can't possibly speak for others who own any sort of aircraft and have probably presumed too much, for which I apologise.
It's to your credit that you have enthusiasm and ideas, both of which may well prove my doubts unworthy. I don't want to pour gallons of cold water on your ideas, but state what is probably already blinkin' obvious, just in case it isn't.
Good luck.
CC
If you are thinking of starting a business, even an aviation related business, is this a good place for basic information? I hope you are rummaging elsewhere more appropriate to the business end of your plans as well!
I am all for encouraging enterprise, but you have two major things against you as far as I can tell: age and experience. True, there are exceptions to the first and you may have the art of a young Branson, but can you persuade the hard-nosed wrinklies who control finances that you have what it takes?
Experience: do you have any work experience in the insurance business? Would you consider serving some time to gain it? Many of those in the business are there as a result of branching out on their own after considerable time working for others. Would you have the contacts and credibility of your more experienced competition with their decades of dealing?
If you can produce all the business plans to give positives to those sort of questions, you still need to put yourself in the worn-out shoes of the impoverished customer. I can just about afford to fly an aeroplane which is the only one thing in my life that is almost irreplaceable - and because of the 'almost' I insure it, not just because it's now compulsory. (The other few things I value can't be replaced so insurance is n/a). I might be tempted to approach another company but it's not just about the premium.
I want a good deal, of course, but I also value reputation, experience and service. Loyalty also plays a part in ones dealings. Which means that there's an element of luck involved too: if I find a company I like, I'll probably stick with them.
It's a bit of a vicious circle, I know, but you are up against this sort of thinking. I can't possibly speak for others who own any sort of aircraft and have probably presumed too much, for which I apologise.
It's to your credit that you have enthusiasm and ideas, both of which may well prove my doubts unworthy. I don't want to pour gallons of cold water on your ideas, but state what is probably already blinkin' obvious, just in case it isn't.
Good luck.
CC
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Thanks again for the reply, ChampChump. I realise the risks involved, and as I said, it is merely an idea at this stage- not an actual business.
I appreciate what you are saying re: loyalty to one company, and I am sure that goes for the entire industry.
Should I go ahead with the idea, a lot of research and time would be needed!
Once again, thank you for the reply, it is much appreciated!
Regards
I appreciate what you are saying re: loyalty to one company, and I am sure that goes for the entire industry.
Should I go ahead with the idea, a lot of research and time would be needed!
Once again, thank you for the reply, it is much appreciated!
Regards
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I think your posts do you credit (despite the Coke can image) and your approach should serve you in good stead - whatever you do.
CC
(whose image of yoof has now been restored)
CC
(whose image of yoof has now been restored)
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Coke611
Suggest you go to www.cii.co.uk and look at getting chartered status before trying to set up your own organisation.
Suggest you go to www.cii.co.uk and look at getting chartered status before trying to set up your own organisation.
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Hi Louis!
Nice idea, but I think you'll find UK GA is much too small an arena to try to plant the seed of a new insurance business and grow it without tears. Far too incestuous, far too few actual ultimate risk carriers, and a bit like Ryanair, it's extremely difficult to see how anyone makes a profit.
Remember that the entire UK register of aircraft is less than 20,000 I think, including everything from microlights, balloons and self build helicopters right up to the big stuff owned by BA. Only some of it is GA and as you can't actually become a licensed risk carrier (insurer) unless you have several millions in reserve capital, you'll be relying on the willingness of few there already to pay you part of the usual 20% commission, and even then you have to be licensed as an insurance seller in some way with the FSA.
But if you can spawn something global that hasn't been done before, then that might be a goer!
As for what else you are up against, I once heard (dunno if it is true!) the insurance market was in some years so competitive that one year it cost Lord King more to insure his Roller than it did to insure one of his Jumbos!
While your options are still wide open, and instead of insuring a bunch of hedge-hoppers
, why not set up a hedge fund instead?
- I heard that's where the smart money is
LD
Nice idea, but I think you'll find UK GA is much too small an arena to try to plant the seed of a new insurance business and grow it without tears. Far too incestuous, far too few actual ultimate risk carriers, and a bit like Ryanair, it's extremely difficult to see how anyone makes a profit.
Remember that the entire UK register of aircraft is less than 20,000 I think, including everything from microlights, balloons and self build helicopters right up to the big stuff owned by BA. Only some of it is GA and as you can't actually become a licensed risk carrier (insurer) unless you have several millions in reserve capital, you'll be relying on the willingness of few there already to pay you part of the usual 20% commission, and even then you have to be licensed as an insurance seller in some way with the FSA.
But if you can spawn something global that hasn't been done before, then that might be a goer!
As for what else you are up against, I once heard (dunno if it is true!) the insurance market was in some years so competitive that one year it cost Lord King more to insure his Roller than it did to insure one of his Jumbos!
While your options are still wide open, and instead of insuring a bunch of hedge-hoppers
, why not set up a hedge fund instead? - I heard that's where the smart money is LD
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Don't get too hung up with the Chartered Insurance Institute bit, Louis. Sure you can learn about insurance with them, but it's the FSA requirements you'll need to satisfy to start an insurance business. You can't really compare chartered status in insurance with chartered status in accountancy for example. One is mandatory to practice, and is also much harder to achieve.
Consequently I think you'll find that relatively few insurance people actually bother to sit all the exams and wait for the necessary time to pass in order to qualify for chartered status. I heard many just sit the bare minimum like the simple (half hour?) Lloyd's Test to get their 'ticket' (via a suitable employer) to enter the Lloyd's and other city buildings and do business. I am not condoning the minimalist approach of course, but 'fleet of foot' seems the key in most businesses thesedays.
Don't overlook perhaps the biggest barrier to you starting tomorrow on your own business is the FSA requirement to have professional indemnity (PI) liability insurance that provides a safety net of sorts for your customers should you make a horrendous mistake like advise them they are covered for something when they are not, and then it happens.
If you decide to work first for an established player then you probably still need to be registered with the FSA but at least you won't have to buy the PI insurance that (hopefully) protects your customers a bit from your errors.
There are big (£) numbers in aviation mistakes so PI policies ain't cheap. So if that's number 1 or number 2 cost in your business plan for the first year, you won't get very fat for a while
Consequently I think you'll find that relatively few insurance people actually bother to sit all the exams and wait for the necessary time to pass in order to qualify for chartered status. I heard many just sit the bare minimum like the simple (half hour?) Lloyd's Test to get their 'ticket' (via a suitable employer) to enter the Lloyd's and other city buildings and do business. I am not condoning the minimalist approach of course, but 'fleet of foot' seems the key in most businesses thesedays.
Don't overlook perhaps the biggest barrier to you starting tomorrow on your own business is the FSA requirement to have professional indemnity (PI) liability insurance that provides a safety net of sorts for your customers should you make a horrendous mistake like advise them they are covered for something when they are not, and then it happens.
If you decide to work first for an established player then you probably still need to be registered with the FSA but at least you won't have to buy the PI insurance that (hopefully) protects your customers a bit from your errors.
There are big (£) numbers in aviation mistakes so PI policies ain't cheap. So if that's number 1 or number 2 cost in your business plan for the first year, you won't get very fat for a while
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GA insurance is a much smaller market, comprising of only about 5 underwriters, and they don't like pilots that shop around, so if you ask 20 brokers for a quote (like you might do for a car) you will get one or two quotes and an angry response from the rest.
The premium depends a lot on the hull cover; this is similar to a fully comp car cover. But there are differences: with car insce you never get a payout of more than the lesser of the insured value and the market value (and the payout is adjusted downwards anyway if the MV is more than the insured value, so they have you by the g00lies) whereas with aircraft insce you can get an "agreed value" cover where the insce co. will pay out the actual agreed value.
Obviously the cost of insuring a £300k plane, for the full hull value of £300k, will be a lot more than insuring a £20k plane.
As a rough indication, a 50 year old sole pilot with a PPL and with 500hrs might pay £1000-1500/year, plus the cost of the hull cover which runs very roughly around 1% of hull value so a £200k plane will be an additional £2000. In practice he will pay some £4000 initially for the £200k plane.
Unlike the USA, the premium is not much affected by pilot ratings and hours, although there are indications this is changing and a CPL and an IR do help, as might 500-1000hrs.
The NCD system also works differently from cars.
Personally I would just go direct to Haywards. Their premiums are similar to anything else one is going to get, as far as I have been able to see.
The premium depends a lot on the hull cover; this is similar to a fully comp car cover. But there are differences: with car insce you never get a payout of more than the lesser of the insured value and the market value (and the payout is adjusted downwards anyway if the MV is more than the insured value, so they have you by the g00lies) whereas with aircraft insce you can get an "agreed value" cover where the insce co. will pay out the actual agreed value.
Obviously the cost of insuring a £300k plane, for the full hull value of £300k, will be a lot more than insuring a £20k plane.
As a rough indication, a 50 year old sole pilot with a PPL and with 500hrs might pay £1000-1500/year, plus the cost of the hull cover which runs very roughly around 1% of hull value so a £200k plane will be an additional £2000. In practice he will pay some £4000 initially for the £200k plane.
Unlike the USA, the premium is not much affected by pilot ratings and hours, although there are indications this is changing and a CPL and an IR do help, as might 500-1000hrs.
The NCD system also works differently from cars.
Personally I would just go direct to Haywards. Their premiums are similar to anything else one is going to get, as far as I have been able to see.
