AOPA Turbine Pilot Magazine - April 2020 - 105

insurers simply are not interested in such
trades; others may show some premium
breaks for enough increases in deductibles,
especially of turbine aircraft. Deductibles
of $25,000 to as high as $100,000 are not
considered unrealistic by some turbine aircraft owners, who may want to trade their
ability to sustain a hull loss of that size
for the need to have high liability limits-
which have become very expensive-and an
aircraft owner chooses to limit their insurance spend accordingly. This is a strategy
that could be employed for two to three
years and modified when the market begins
to improve. Remember this, however: Hull
deductibles apply to foreign object damage
as well, so increasing deductibles for turbine-engine aircraft places more risk upon
the aircraft owner for those uncontrollable birds, rocks, et cetera, which can cause
costly damage to turbine engines.
The insurance industry seems to place
a lot of emphasis on the importance of
simulator-based training. However, with

so many aftermarket avionics solutions
now available, often the simulators don't
reflect the panels that pilots are flying
behind, particularly in legacy airplanes,
including turbines. Is there any movement toward placing greater value on
in-airplane recurrency flights?
Unfortunately, underwriters today are much
less skilled aviators [and more] gamers.
Honestly, the percentage of pilot underwriters who are making decisions for your
membership may be at an all-time low, which
is problematic as...they've been told, "sim
training is good." That is not to say sim training is not good. We strongly believe [in] and
support it. However, your point is well taken,
especially given the myriad avionics packages
out there that populate aircraft, especially legacy aircraft, and that makes this a very, very
challenging matter. Take into consideration
the scenario where an insurer who historically has covered a member's aircraft and now
says they want 30 percent more and only want
50 percent of the risk and will not agree to the
$10 million limit but will agree to offer only

a $5 million limit. That renewal, which consumed five to eight hours of a broker's time
last year, just went to about 30 to 40 hours
to thoroughly serve just that one client. The
broker must approach a dozen other insurers now to find that other 50 percent-some
of which may have already rejected it at 100
percent. Then, after submitting to the dozen
insurers, phone calls discussing the aircraft,
loss history, avionics packages, training history-and oh, by the way, we don't want to use
SimCom because our panel is different than
what SimCom has in their Meridian-and one
by one, by one, the dozen insurers drop to one
or two and the price keeps going up. I think
you get the picture. In the melee of the process of a renewal right now, the first year of
the market turning hard, these insurers just
don't want to hear it. This will be something
which, in 2021 and 2022, brokers can use to
help loosen the grip insurers have upon us all
to bring reason and common sense back into
the market, hopefully.
AOPA
EMAIL thomas.haines@aopa.org

(307) 317-5550
AVIATAIRCRAFT.COM/2020

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AOPA Turbine Pilot Magazine - April 2020

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