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Six Easy Steps in Buying the Right Airplane Insurance
By Bob Mackey, Vice President, Falcon Insurance Agency, Inc.
December 17, 2003 - Have you ever noticed there are a lot of "Monday Morning Quarterbacks", people who'll be more than happy to tell you what you did wrong or what you should have done instead? Sure, these folks have good intentions, sometimes, especially if they are a friend; however, all this good after-the-fact advice doesn't do much if you've already made a decision that might have been made differently and perhaps better had someone given you a little upfront advice.
As aviators we know from our personal experiences that a successful checkride starts with training, planning, and preparation. The same goes for assuring an enjoyable cross-country flight: gather all the information you need, make a good plan, and execute based on your preparations, e.g., checking the weather and making sure both you and your airplane are in tip-top shape. Make a plan and execute your plan! Why is it that we don't apply the same principles when it comes to buying insurance?
Here are six easy steps that will help you succeed in buying the right airplane insurance.
Step One: Get all the details together
For the most part aviation insurance is still underwritten the old-fashion way, which is very good because good old-fashion aviation knowledge still has an impact on the premium you will pay. Many aviation insurance companies have automated their underwriting process; however the programming behind the automation is still based on pilot skills matched with aircraft characteristics, and flight environment. As an example, a low-time pilot in a high-performance aircraft is going to pay a higher premium than a high-time experienced pilot in the same get-up-and-go rocket ship.
When starting out to secure the right aircraft insurance, it is very important that you collect all the information you can about you, the airplane you want to insure, the airport where you plan to base your airplane, and the type of flying you plan to do. In addition it will help you with your premium if you collect all the details about your flight experience, especially information about any extra training you've done in the past few years, such as FAA Wings Training, ground schools, and other recurrent training (even if it is not in the airplane you are seeking insurance for). All of these details will be a value in getting the right insurance for your airplane.
Step Two: Make sure you are the right match for the airplane
How many times have we heard about someone thinking about buying the wrong airplane for their individual pilot skills, the type of flying they are planning to do, or the airport where they plan to base their airplane. Regardless of whether you are considering a kit, a restored vintage airplane, a used homebuilt, or just buying a standard category airplane (new or used), before you leap into ownership or start building get some advice to match your pilot skills, how you plan use the airplane, and the airport where you'll be based. Where do you get this advice? There are a lot of good places to go. The EAA Flight Advisor Program is a great resource. All you need to do is contact EAA headquarters and get yourself matched up with a volunteer EAA Member Flight Advisor who is familiar with the aircraft you are considering. You can reach EAA by calling toll-free 866-EAA-INFO. Other places you can check are the local flight school, fixed base operator, friends who fly at your airport, the local EAA Chapter, or the local aircraft mechanic. All of these resources are out there and available to you. If you go out to get insurance on an airplane that isn't a good match for you, you are going to find insurance difficult to get and maybe even not available.
Step Three: Decide who will be flying the airplane
This is an important step. If you are going to be the only pilot your premium will be less than if you plan to name three people as approved pilots on your insurance. Why? Increased exposure! It's common sense. A policy with four approved pilots, from the viewpoint of the insurance company, will most likely fly more than an airplane with only one named pilot. (In another Insurance Tip we will further explore the value of the Open Pilot Warranty.) Make sure you know who besides you needs to be named on your insurance policy and then make sure you have all the details about their pilot skills. (Refer to Step One above.)
Step Four: Make the call
The aviation insurance industry is extremely small in comparison to the automobile insurance industry. There are currently nine companies that write aircraft insurance, and that number is always in flux with companies stopping and starting their involvement in the various segments of the aviation insurance marketplace. In addition, there are maybe 200 insurance agents that have some level of specialty in aviation insurance. So, as you can see the market is small. There's also an additional ingredient to consider: most of the aviation insurance companies will only quote to the first agent that contacts them. Make one call…don't call two or three agents because they will only end up running into each other trying to get a quote for your airplane insurance. You're not going to get a better price if you have more than one agent working on getting you an insurance quotation. Obviously, as an EAA Member your best bet is to contact Falcon Insurance Agency 866-647-4EAA (4322) to get a quote in the EAA Plan. The specialists at Falcon will look at all of the available insurance companies to make sure you get the best coverage at the best price matched to your insurance needs. This step is the most important to remember!
Step Five: Go over all the options
There are a lot of options when you buy airplane insurance. You can go with full coverage or you can go with liability only or ground coverage only, and you can select many different limits of coverage for liability insurance. It is most important that you discuss these aspects with your insurance specialists at Falcon Insurance Agency. This will help you make sure you are buying the right insurance and not wasting your money. Again, call to get your quote in the EAA Plan, 866-647-4EAA (4322).
Step Six: Read your insurance policy
Yes, some people consider insurance to be boring! In fact some have said reading an insurance policy will cure insomnia, which may or may not be true, but reading an insurance policy takes time, and it can be confusing if you are not familiar with the structure of the policy and other details. Regardless, carefully read your insurance policy. Make sure any mistakes are noted, although they may not affect your coverage, and make sure you bring any mistakes to the attention of your specialist at Falcon Insurance Agency. Make sure you understand what the policy says and means. Here's a suggestion; take one of those yellow highlighter pens and mark anything you don't understand, then call your specialist at Falcon Insurance Agency and ask them to explain what the terms and conditions mean. The only bad question is the one you didn't ask! There is nothing wrong whatsoever if you say you don't understand your insurance coverage!
So, there you go. Six easy steps toward making sure you are buying the right airplane insurance. Needless to say there are other steps you may want to add when you buy your next insurance policy for your airplane. Regardless, start with these six steps and you will find buying airplane insurance isn't as difficult a task as you might have thought.
Remember, the EAA Aircraft Insurance Plan is designed to meet your needs as an EAA Member. Call Falcon Insurance Agency before you do anything else and you will find EAA has put together a great member benefit for you!
If you would like to know more about EAA Insurance Solutions, or find the right insurance for the type of flying you do, call 866-647-4EAA (4322), or complete an online quote request form. When you insure your airplane through EAA Insurance Solutions you’re helping support EAA member programs for safety, advocacy and youth education.