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Age & Airplane Insurance: Who Decides You’re Too Old?
By Bob Mackey, representative for the EAA Aircraft Insurance Plan, Administered by Falcon Insurance Agency
April 8, 2010 - It’s no secret that insurance companies take age into consideration when issuing insurance policies. The thinking is that young and old insureds represent a different risk exposure (read higher risk) than people that aren’t young or old. For example, when your teenager gets his or her driver’s license and gets added to your auto insurance policy, you know your premium going to go up. Same for the other end of life’s spectrum – when one passes some predetermined “golden year” their insurance premium will likely increase. Airplane insurance behaves similarly.
I’ve seen insurance premiums for a new 17-year-old pilot/owner (Gee, I wish I could have owned an airplane when I was 17!) go up and I’ve also seen higher premiums for older pilots. The question is who decides you are too old?
When it comes to flying, several stakeholders might say you are too old; doctors - when you take your physical; instructors - when you do your flight review; an airport manager who oversees airport operations; friends and family who know you and care about you; the insurance company; and of course you. For the sake of this article I just want to look at the insurance company issue and things you can do to mitigate potential negatives (higher premiums and flying restrictions).
What are the factors?
The type of airplane you fly; where, how much, and how you fly it; your home airport; and limits of insurance and coverages you’re seeking – these are the main factors that companies consider when pricing your insurance.
If you fly an airplane with several seats, this could possibly be a problem because insurance companies base their position on the number of passengers that might be injured in the event of an accident. (Remember, insurance companies by definition always worry about the worst case scenario!)
Your destinations and your base airport can be combined. If you fly in a very congested environment - or a very remote, more potentially hostile environment like Alaska - it can be more difficult to get insurance as you get older. The limits of insurance are another factor because insurance companies are more hesitant to offer really high limits of insurance for older pilots. Insurance companies also get skittish if your airplane is really expensive. (The insurance company is always looking at the size of the check they might have to write.)
How you use your airplane may also come into play. If you use your airplane for any commercial uses, odds are you are going to find it more and more difficult to find insurance as you get older…even if you’ve got a loss-free history. I think insurance companies figure you’re due for a loss and they don’t want to be stuck with the loss all the other insurance companies dodged.
Lastly, how much you fly is something insurance companies look at. This is something I’ve never quite understood. If you don’t fly much, the insurance company will say you are not staying proficient. If you fly a lot, they might say you are flying too much. Try as I might, I can’t seem to get answer as to what is the right number of hours. I don’t know about you, but I figure the economy is a major determining factor in just how many hours we fly.
What can you do as you get older to make sure you are not getting nicked on your insurance because of your age? Here are my suggestions.
Make sure you are flying the right airplane. If you are flying a 6-place, high-value airplane, a rare vintage airplane, an airplane that would cost a bunch of money to repair, these are factors. You may want to consider changing to an airplane that is more insurable. I know this isn’t something you want to do but it is a trade off you might need to be prepared to consider.
If you fly to locations that are uncomfortable for the insurance company, like the islands or Alaska or other remote places where flying conditions and airports are more challenging, you might need to rethink those plans. If you are based at a private airport with really short runways, this might also scare the insurance company as they oftentimes consider such places for really skilled pilots. (Again, the insurance company might be questioning your abilities to deal with the pilot skills needed.)
How are you feeling today? Insurance companies are always concerned about your health. This is why they ask about the medications you are taking, especially as you get older. Even though the FAA may have approved the medications you are taking, the insurance company may be watching this as they consider your insurance. (Insurance underwriters are sometime old too!) Your best bet is to take care of yourself and stay as fit as possible. My personal belief is that pilots who’ve had some type of medical issue are really good about taking care of themselves once they dodge the first health bullet. Face it - if we lose our medical it’s a pain to get it back. Be prepared to prove you are taking care of yourself.
Flying too much or too little is a tough one. My recommendation is that you consider going the extra mile when it comes to maintaining your pilot skills. I’ve known pilots who take an annual flight review, take extra training, annual instrument check-rides, and participate in other recurrent training programs for their own satisfaction. What these pilots may not realize this training is valuable when it come to insurability…at all ages!
If you are, or are becoming, a senior pilot I recommend you talk with your insurance agent to see what you can and should be doing to make yourself desirable in the eyes of an insurance company. If you don’t own an airplane and you’ve been out of flying for a while, call an aviation insurance specialist to get some advise as to what airplane would be best (most insurable) for you. Whatever you do don’t go out and buy an airplane before you talk to an aviation insurance professional so you know what you might expect when it comes to insurance!
I cannot begin to tell you how many times I’ve had to deal with unhappy new airplane owners that are disappointed when they find out they can’t get insurance, or the insurance is really expensive because of their age. You can avoid this with a little planning and just one toll-free phone call.
Let me close with a final thought. I’m not young, and I’d like to think I’m not old, but I’m getting there. I’d also like to think that as I get older I’ll make fewer mistakes…but I also know that’s going to change at some point, if it hasn’t started to already.
My objective with this article is to inform. As we get older we need to be prepared and plan accordingly so we can fly until WE decide it’s time to hang up the goggles…not the insurance company.
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.