Insurance

[4RNB]

I'd like some tips on insurance. Last year was my 2nd year owning a plane, I'd asked for an increase in my hull value and was turned down. This year, I am asking again (new engine/avionics/paint) and I am instrument rated. Any pointers how to deal with the insurance market?

Currently with Assured partners.

What do you do?
Does folks shop around every year?

 

[Gary Ward]

I'd like some tips on insurance. Last year was my 2nd year owning a plane, I'd asked for an increase in my hull value and was turned down. This year, I am asking again (new engine/avionics/paint) and I am instrument rated. Any pointers how to deal with the insurance market?

Currently with Assured partners.

What do you do?
Does folks shop around every year?

Assured Aerospace Partners is my agency and they shop for me every year. I am insured by Global Aerospace.

My insurance went down about 50 bucks 3 years ago after I became instrument rated and I raised my hull value by 20K that same year. Last month I raised my hull value another 20K and my insurance went up 50 bucks for this coming year. This is for a 172, probably the cheapest plane to insure?

Which type of plane do you have and how high of a hull value do you want?

 

[4RNB]

Assured Aerospace Partners is my agency and they shop for me every year. I am insured by Global Aerospace.

My insurance went down about 50 bucks 3 years ago after I became instrument rated and I raised my hull value by 20K that same year. Last month I raised my hull value another 20K and my insurance went up 50 bucks for this coming year. This is for a 172, probably the cheapest plane to insure?

Which type of plane do you have and how high of a hull value do you want?

Also a 172.
I am trying to insure for what it would cost to replace my plane. Trade A plane highest 172 is 228K right now, I think that is a good starting point.
$50? Is that per month?

 

[Gary Ward]

Also a 172.
I am trying to insure for what it would cost to replace my plane. Trade A plane highest 172 is 228K right now, I think that is a good starting point.
$50? Is that per month?

No 50 a year.
My 172 is insured for half of that, so I can see why they wouldn't want go that high on a 172. Mine is still under insured and really have to raise it more.
In 2018 I gave 30K for it from a friend, 1980N. It was a all original panel, interior and original 1400 hr motor with some damage history on the air frame. Air frame only had 1400 hrs on it. I did put 50K into the panel shorty after I bought it. 2 years later I installed a new 30K engine(did all the labor myself) and 3K into the interior(again I did all the labor). My hull value is insured for 120K. Last I looked a 1980N is going for 125-150K. Maybe more? It now has almost 2400 hrs on the air frame. I fly it a lot.
Good luck with yours. Last I looked Vref said it was worth 171K

My 172 was hit by a tornado in 1990, they told me it all buffed out, flys good now a days.

 

[dbahn]

FWIW, the instrument rating typically will lower rates, but the commercial rating doesn't seem to have any impact.

 

[Pinecone]

Strange, but new avionics and paint do not seem to translate to value for loan or insurance.

 

[Shepherd]

Instrument lowers rates, new skills can keep you safer.
Commercial can raise rates. (Possibly) More flying, more exposure, more chances to screw up.

 

[dans2992]

$228k for a 172, it better be a very new model. What year is yours?

 

[TCABM]

Also a 172.
I am trying to insure for what it would cost to replace my plane. Trade A plane highest 172 is 228K right now, I think that is a good starting point.
$50? Is that per month?

That’s not quite how it works. Our 172 has an agreed to hull value of $90K for a 1975 M model with 1700hrs on the motor, 2x G5s, GTN650, and GTX345, original paint & interior. I’d love to get a hull value of $228k for it, but that’s not a realistic value for our airplane. The liability is 100K per pax/1m/1m with a $0 in motion deductible. That’s $4K/yr for our partnership primarily because we have more than 4 people and some have no instrument rating.

The $228K 172M is an asking price and it’s got a 0 SMOH motor, new P&I, a G3X and just about one each of everything from Garmin in the panel EXCEPT no autopilot. VREF on that comes out to $207K which is where our insurer would accept as the agreed to value.

 

[frfly172]

I’m not sure you are using a realistic price, the insurance companies don’t operate at a loss going in.

 

[Salty]

How come they won’t insure my Tacoma for 40k (cost of a nicely equipped taco today)?

 

[donjohnston]

Trade A plane highest 172 is 228K right now, I think that is a good starting point.

I think we found the problem.

 

[4RNB]

$228k for a 172, it better be a very new model. What year is yours?

AOPA VREF for my plane as planned will be 218K if I got all the stuff in. Avionics are being installed now.

 

[4RNB]

That’s not quite how it works. Our 172 has an agreed to hull value of $90K for a 1975 M model with 1700hrs on the motor, 2x G5s, GTN650, and GTX345, original paint & interior. I’d love to get a hull value of $228k for it, but that’s not a realistic value for our airplane. The liability is 100K per pax/1m/1m with a $0 in motion deductible. That’s $4K/yr for our partnership primarily because we have more than 4 people and some have no instrument rating.

The $228K 172M is an asking price and it’s got a 0 SMOH motor, new P&I, a G3X and just about one each of everything from Garmin in the panel EXCEPT no autopilot. VREF on that comes out to $207K which is where our insurer would accept as the agreed to value.

I’m not sure you are using a realistic price, the insurance companies don’t operate at a loss going in.

How come they won’t insure my Tacoma for 40k (cost of a nicely equipped taco today)?

View attachment 110832View attachment 110833

I think we found the problem.

AOPA VREF for my plane as planned will be 218K if I got all the stuff in. Avionics are being installed now.

I just ran AOPA VREF, dont have the full avionics install list in front of me, likely missed some things (ok, I know I missed 2 G5s), and the number is 218K
So, I will stick to my guns that the 228K listed online is a GREAT starting point
AND I'd like to bring the discussion back on topic on how I can best deal with the insurance market.
My 50 ish yr old plane, with new engine, new avionics, and new paint, deserves to be insured better. I am willing to pay up to insure against losses as it can not be replaced for the value currently insured for.

 

[Checkout_my_Six]

ya but.....it has damage history....so it ain't all that.

No 50 a year.
My 172 is insured for half of that, so I can see why they wouldn't want go that high on a 172. Mine is still under insured and really have to raise it more.
In 2018 I gave 30K for it from a friend, 1980N. It was a all original panel, interior and original 1400 hr motor with some damage history on the air frame. Air frame only had 1400 hrs on it. I did put 50K into the panel shorty after I bought it. 2 years later I installed a new 30K engine(did all the labor myself) and 3K into the interior(again I did all the labor). My hull value is insured for 120K. Last I looked a 1980N is going for 125-150K. Maybe more? It now has almost 2400 hrs on the air frame. I fly it a lot.
Good luck with yours. Last I looked Vref said it was worth 171K

My 172 was hit by a tornado in 1990, they told me it all buffed out, flys good now a days.

 

[William Pete Hodges]

Do you have $228k invested in the airplane, or do you have less and just want the $228k hull coverage to reflect what you think the airplane is worth? From the insurance company's pov that is a legitimate question. One thing they are concerned with is overinsuring to the point where it to your advantage to total the airplane and take the cash, so they are going to stick with common average price unless you prove to them that your bird is worth more than that in the eyes of an aircraft appraiser. Has your airplane been appraised?

 

[Salty]

as planned

Sure. They’ll write you a policy for $50k more than every other 172 because you PLAN on upgrading it. I’m sure they’ve never heard that one before.

 

[4RNB]

Sure. They’ll write you a policy for $50k more than every other 172 because you PLAN on upgrading it. I’m sure they’ve never heard that one before.

The level of friendliness on the internets persists

A factory new 180 HP engine is already installed.
Avionics are paid for and being installed NOW: G3X, 750xi, 500 AP, all new wires, all remote
Paint should take place Nov 2022
Policy period begins Jan 1 2023.

 

[4RNB]

Do you have $228k invested in the airplane, or do you have less and just want the $228k hull coverage to reflect what you think the airplane is worth? From the insurance company's pov that is a legitimate question. One thing they are concerned with is overinsuring to the point where it to your advantage to total the airplane and take the cash, so they are going to stick with common average price unless you prove to them that your bird is worth more than that in the eyes of an aircraft appraiser. Has your airplane been appraised?

AOPA VREF says the plane is worth it. What difference does it make further?
If one bought a house in 2000 for 30K, put a new roof on that costs 5K and current homes are selling for 100K, what does one insure for? I want replacement cost insurance. By the end of 2023, my plane will likely be nicer than similar models for sale.
I want to insure for current value of the plane, not what I paid for it.
Last year they said no.

Absent any help here, I think I will just call all the insurers.

 

[4RNB]

As a thought exercise for those that are not being particularly helpful
Find me a C172 with new paint, factory new 180 HP engine, Bushliner nex gen panel system, avionics mentioned, everything remote. Other than interior, basically everything brought to new standards.

How much is that plane selling for? That is what I want to insure for. Not my current insured amounts.

Then, how do I get that with a company that would not increase insured amounts last year?

 

[Pinecone]

Instrument lowers rates, new skills can keep you safer.
Commercial can raise rates. (Possibly) More flying, more exposure, more chances to screw up.

How is getting your commercial change your risk for your personal airplane? Are you going to do charters?????

 

[Salty]

How do you expect people to help you? I wanted to buy a Rv-10. Called around and found out they wouldn’t insure one for what it would cost me to buy one. So I didn’t.

 

[Gary Ward]

ya but.....it has damage history....so it ain't all that.

I was looking for opinions and I agree with yours. So I will leave my insurance like it is. I am embarrassed by how much I put into a 172 and kept it to myself for the last few years. My late friend who I bought the plane from is rolling over in his grave seeing what happened to 172 prices since he sold and passed. I did the upgrades for me to enjoy which I have been doing ever since.
What my plane is worth right now really does not concern me much because I don't plan to sell anytime soon. Thanks for your input.

 

[somorris]

I would just call and talk (telephone—not e-mail) to the AOPA agent. We are sort of in an inflated airplane market right now, and valuing an airplane is very difficult. Vref just gives a general idea of selling prices that have been reported, not necessarily verified as being accurate. I raised our hull value a couple years ago before the market went ballistic and didn’t have a problem at all. I wasn’t shooting for replacement value, just enough to ease the pain a little in the event of a total loss.

 

[rsleeds]

I want replacement cost insurance.

The airplane insurance industry is typically not a replacement cost model like you see in houses. It is an Agreed Upon Value model. Generally speaking, getting what you have or can prove you have above an average value for type/year is beyond the effort most agents will put in for you in dealing with different insurers and also something a lot of the insurers won't put much effort into for a single policy. I believe you can get what you want, at a cost you can then decide if it is worth, but it will take a special agent finding the one (or a very small number of) insurer who will quote you.

 

[Rgbeard]

No dog in the fight, but it won’t stop me from commenting.

Seems the OP may have over-invested in the 172 and missed the chance of having a more capable mount.

I use a trusted insurance broker that shops eight companies and shows me the quotes from each.

 

[Gary Ward]

Seems the OP may have over-invested in the 172 and missed the chance of having a more capable mount.

That is up to the OP.
I think I made that mistake.

 

[donjohnston]

I haven't used vRef in a while. But the last time I did, the number I got was WAY higher than it could have possibly sold for. Maybe they changed their formula but I would think that what a comparable aircraft sold for would be a better baseline.

That said, think about it like this: You bought a '72 Pinto. You put in a bigger engine, leather interior, fancy wheels, and put a nice paint job on it. All told, you have $45,000 into it. The only way you're going to get that kind of coverage is if you go with some type of specialty insurance.

I looked at all the "50ish" 172's on trade-a-plane. With one exception, they were all in the $65k-$150k. The exception was listed for $207k. And I think that one will sit with a for sale sign on it for a while.

Most of the time insurance companies are happy to raise your premium in exchange for a higher hull value... To a point. After that, most insurance companies just aren't interested in that risk model.

Not saying it's impossible, just saying that what you want is outside the norm and insurance companies typically aren't setup and don't want to operate there.

 

[aggie06]

You’re correct that the insured value should have nothing to do with what you paid, only the cost to replace the asset. Different insurance companies have different ways of determining replacement or insurance hull values they will accept. Avemco told me they wouldn’t insure mine for less than about 200k. I would sell it for that today if someone offered. I believe they used vref. Assured was more reasonable and was able to accept up to 150k, which is closer to the right value.

Moral of the story is that you have to call around to see what their hull guidelines are. Avemco is going to be different than others. Assured us shopping a bunch of companies as your agent. Avemco is a standalone insurance company that does not use other agencies, so they have different rules.

 

[Pinecone]

No, the insurable value does not have to do with replacing it. It what a similar airplane would sell for.

Again, you could have put $200,000 in your C-172, but it doesn't mean anyone would pay for that much for it.

 

[Shepherd]

How is getting your commercial change your risk for your personal airplane? Are you going to do charters?????

Don't ask me. Just paraphrasing a conversation with my insurance agent.
I suspect that once you are flying a lot of hours for a living, maybe you take shortcuts or are a little more prone to be laid back in your GA flying. Hence more accidents.

 

[aggie06]

No, the insurable value does not have to do with replacing it. It what a similar airplane would sell for.

Again, you could have put $200,000 in your C-172, but it doesn't mean anyone would pay for that much for it.

Simmer down there buddy. To replace an airplane, you have to buy a substantially similar airplane. Replacing it doesn’t mean you’re getting all the money to go back and make the bad spending decisions you made the first time. You just argued that it’s not replacement value because it is replacement value.

That’s how replacement value is determined in insurance. It’s not complicated. Do you also argue with other experts in industries that you have no experience in?

 

[Pinecone]

It is not replacement value, but comparable value.

Sound the same, but aren't.

My point is, if it costs $200,000 to replicate it, but it would sell for only $100,000, they will insure it for $100,000.

 

[mondtster]

In the current market there are becoming more and more instances where the insurance companies will not insure an aircraft for what the current market says it is worth. A good insurance broker will help, and an aircraft appraisal may also help if an owner wants to continue to pursue an agreed upon valuation that is higher than the maximum value an underwriter is normally willing to write.

I’ve had a few problems with agreed upon values for some specialty aircraft but not anything relatively common.

 

[TCABM]

AOPA VREF for my plane as planned will be 218K if I got all the stuff in. Avionics are being installed now.

Until the job’s complete, the value isn’t there. Right now you have a disassembled aircraft. Your conversation should be with your broker.

 

[aggie06]

It is not replacement value, but comparable value.

Sound the same, but aren't.

My point is, if it costs $200,000 to replicate it, but it would sell for only $100,000, they will insure it for $100,000.

Replicate and replace are two different things. You’re the one who is confused. Regardless, your duty as the insured is to mitigate damages, which means you replace your airplane by getting a comparable airplane in the cheapest way possible, not by rebuilding it the same way. If you can buy an airplane for 200 that has the exact same hours and avionics vs buying one for 150 and putting 100 into avionics to get it the same, you clearly replace it for 200.

Aviation insurance is no different from other P&C insurance in that way. The difference between aviation insurance and auto insurance is that we specify hull values vs allowing the insurance company to float the value over the term of the policy based on markets. They do this with insurance exactly because the market is so limited and the top end hull value caps the insurance company reserves (that’s the amount they know they will pay out in the future on a policy). If we didn’t have that, the policy would be absurdly expensive because they would end up rolling in the cost of defending the average lawsuit for disputed values. You very well could get into arguments over value of limited market aircraft. Agreed value policies take that out.

 

[Pinecone]

I think we are talking around the same ideas.

The OP will have put $218K into a 172. It is not worth that much, even with everything that has been put in. So the insurance company will not insure for $218K.

In auto insurance, there are agreed value coverage, but mainly used in the collector car market.

 

[4RNB]

I think we are talking around the same ideas.

The OP will have put $218K into a 172. It is not worth that much, even with everything that has been put in. So the insurance company will not insure for $218K.

In auto insurance, there are agreed value coverage, but mainly used in the collector car market.

No NO NO
218 is AOPA VREF for my plane.
Have I not written that clearly before? Is my written communication unclear?

Upon what basis is my plane not worth that much?
Perhaps based upon your values?

I started at 228K based upon available used plane listings and thinking mine would be better featured. That is a data point.

The data point of AOPA VREF is also valid.

And the discussion is about how to increase my insured value when my insurer would not do so last year.

Even the base case (original avionics) on AOPA is >30K more than purchase price AND insured value. Surely that is a minimum to increase insurance by.

I have never discussed how much $$$ I have put into the plane.

This is not supposed to be a discussion about the value of my plane, but about insuring the plane.

 

[TCABM]

…
This is not supposed to be a discussion about the value of my plane, but about insuring the plane.

Literally every single post you’ve made in this thread has been about the value of your plane.

How to insure is simple: call Broker, give details. Broker does research and finds you a policy. No insurer is required to issue you a policy.

 

[Checkout_my_Six]

If you are having difficulty insuring your plane....something is off kilter.....your expectations.