Price vs. Value
By Bob Mackey, Vice President, Falcon Insurance Agency, Inc.
Aircraft insurance is certainly a significant part of the cost in owning an airplane. However I believe there are many important values you receive when you buy insurance. Unless you're an aviation insurance person you may not know that much about your insurance coverages and the "fine print." You need insurance, at least liability insurance if you want to go without hull (physical damage) insurance, however how much do you know about the coverages and whether or not you're getting value?
From my experience it seems many airplane owners focus on the price of their insurance and don't pay as much attention to its value. Because aviation insurance companies have varying insurance policies, you'll never know for sure what your insurance policy covers unless you take the time to read the entire policy. (I know, reading an insurance policy can be a very boring undertaking, however it is critical.)
When you buy insurance, you count on your agent to make sure you're getting the right insurance for your type of flying. Unfortunately some insurance agents will not go into all the details. This can also be true if you are buying from a direct underwriter and not an independent insurance agent. If you have questions or discover the insurance coverage isn't exactly what you need, call your insurance agent and work out the details.
For example, I recently asked an EAA member if his insurance covered other pilots flying his airplane. He answered, "I think so," so to be sure I explained the "open pilot warranty," which typically allows other pilots to fly one's airplane provided they met certain minimum time and type qualifications.
My next question was whether he knew if his liability insurance had a "per person" or "per passenger" sub-limit. Again, he didn't know for sure so we talked about the differences in these terms. The fact is you can sometimes buy less expensive insurance that has major shortfalls in coverages and you'll never know this unless you read your insurance policy … or until you have a loss and find out the hard way.
A skilled and knowledgeable independent insurance agent can point out the differences in insurance policies. Independent agents have access to a variety of aviation insurance companies so they can arrange aircraft insurance for almost any client. Of course, there are times that we can't find insurance for a really difficult situation, however, with very few exceptions, nobody can do what an independent agent does when it comes to arranging the right insurance at the best price.
EAA INSURANCE TIPS is a special EAA Member benefit. If you have an insurance related topic you’d like to see addressed or if you have any comments, please email Bob Mackey. If you need an insurance quotation call 866-647-4EAA (4322) or go online and submit the online quote request form.