Why GA exclusive w umbrella policies?

beestforwardspeed

beestforwardspeed

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So I really don’t understand…..why is GA excluded in umbrella policies when it’s very clear that the risk of having one kick in is extremely small?

One would first have to exhaust usually 1M on the normal policy, and that has to be an extremely rare (any one have stats??) occurrence. If you are involved in an accident serious enough to go up against that limit…the heavy odds are you yourself are going to be 6 feet under, and of course then not needing it.

Seems like it’d be a low risk and $$ maker for an insurance company to offer this.

So why then? Especially for someone with thousands of hours with no violations or accidents
 
like Life insurance, it’s simply a small enough group that it’s not worth the actuaries’ time.
 
MauleSkinner said:
like Life insurance, it’s simply a small enough group that it’s not worth the actuaries’ time.
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^^^ This. Individual Umbrella policies are a commodity sale.

I've also seen it on business policies, though most business policies are individually underwritten. I've always asked for it's removal and never been refused, I doubt you can do this on an individual policy anymore.
 
beestforwardspeed said:
So I really don’t understand…..why is GA excluded in umbrella policies when it’s very clear that the risk of having one kick in is extremely small?

One would first have to exhaust usually 1M on the normal policy, and that has to be an extremely rare (any one have stats??) occurrence. If you are involved in an accident serious enough to go up against that limit…the heavy odds are you yourself are going to be 6 feet under, and of course then not needing it.

Seems like it’d be a low risk and $$ maker for an insurance company to offer this.

So why then? Especially for someone with thousands of hours with no violations or accidents
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The umbrella isn't to cover you, its your liability for losses to others, whether your passengers or someone on the ground you injure.

The is a common misunderstanding that aviation is safer than driving. That is true, but only of commercial aviation. Commercial aviation hasn't had a fatal accident in years. GA averages one nearly every day. When you compare that to the number of GA flights, the risk factor is high. Insurance companies are very leery of GA for just that reason.
 
midwestpa24 said:
The umbrella isn't to cover you, its your liability for losses to others, whether your passengers or someone on the ground you injure.

The is a common misunderstanding that aviation is safer than driving. That is true, but only of commercial aviation. Commercial aviation hasn't had a fatal accident in years. GA averages one nearly every day. When you compare that to the number of GA flights, the risk factor is high. Insurance companies are very leery of GA for just that reason.
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But when you combine those two paragraphs, what percentage of those accidents involve large payouts to the unsuspecting public?
 
It’s not just a payout but the cost of legal representation…anything aviation carries a higher risk of litigation…only thing worse is anything space related…the potential payout is considerable compared to the premium dollar available.
 
midwestpa24 said:
The umbrella isn't to cover you, its your liability for losses to others, whether your passengers or someone on the ground you injure.
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To be precise, it's to cover YOUR assets which will be at risk if you injure someone. It doesn't matter if you die in the accident.

I work for a property/casualty insurer. We pay out policy limits of $1M or more all the time. A million bucks ain't what it used to be, especially with all the personal injury attorneys and crazy juries out there these days.

C.
 
camorton said:
To be precise, it's to cover YOUR assets which will be at risk if you injure someone. It doesn't matter if you die in the accident.

I work for a property/casualty insurer. We pay out policy limits of $1M or more all the time. A million bucks ain't what it used to be, especially with all the personal injury attorneys and crazy juries out there these days.

C.
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But how often do the injured successfully go after the defendants for more than the policy limit (1M) if their net worth is also a lot more than 1M?

I would imagine extremely rarely since it’s a lot better to take the insurance settlement bird in the hand vs litigate again for years with no guarantee
 
midwestpa24 said:
The umbrella isn't to cover you, its your liability for losses to others, whether your passengers or someone on the ground you injure.

The is a common misunderstanding that aviation is safer than driving. That is true, but only of commercial aviation. Commercial aviation hasn't had a fatal accident in years. GA averages one nearly every day. When you compare that to the number of GA flights, the risk factor is high. Insurance companies are very leery of GA for just that reason.
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It’s might not be safer than driving but it’s definitely safer than snowmobiling or motorcycles yet umbrella policies don’t exclude those activities
 
Warlock said:
It’s not just a payout but the cost of legal representation…anything aviation carries a higher risk of litigation…only thing worse is anything space related…the potential payout is considerable compared to the premium dollar available.
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But remember though….an umbrella only would kick in if the primary insurance is exhausted. That’s a pretty substantial firewall to go through first.
 
midwestpa24 said:
The is a common misunderstanding that aviation is safer than driving. That is true, but only of commercial aviation. Commercial aviation hasn't had a fatal accident in years.
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Commercial aviation includes corporate aviation, which does not share the safety record of airline travel.
 
May be low risk but potential high stakes.

And, like aviation insurance in general, if they are not in the biz, why bother with underwriting such a small, specialized market for what might be a small premium payment?
 
beestforwardspeed said:
But remember though….an umbrella only would kick in if the primary insurance is exhausted. That’s a pretty substantial firewall to go through first.
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If you kill somebody or have an experience like I had with my leaseback the limits are a problem…particularly per person bodily injury limits on a GA policy.
 
It's not just aviation. My umbrella policy excludes our Waverunner. It would probably exclude a motorcycle as well.

The primary item I was trying to cover was if one of us badly damaged an expensive car, because our car insurance tops out a $50,000 on property damage.
 
The insurance company was more than willing to write an umbrella policy as long as my airplane was not involved.
 
Look at your policy. That $1M usually includes a $100k per person or per occupant limit, and quite low coverage for medical expenses. From the insurance company's perspective, I suspect the odds of a big payout from GA are higher that from a car accident or someone tripping on your walkway.
 
beestforwardspeed said:
It’s might not be safer than driving but it’s definitely safer than snowmobiling or motorcycles yet umbrella policies don’t exclude those activities
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I believe flying is statistically about as safe as motorcycling... but there are enough motorcycles out there that the annual loss rate is fairly consistent and predictable, while aircraft accidents go up and down from year to year. There are also enough bikers as a percentage of the population that excluding them could be a significant amount of business; if they excluded all pilots it'd be barely detectable. And a plane can do a lot more damage to the schoolhouse it crashes into than a motorcycle.
 
DoubleD said:
Look at your policy. That $1M usually includes a $100k per person or per occupant limit, and quite low coverage for medical expenses. From the insurance company's perspective, I suspect the odds of a big payout from GA are higher that from a car accident or someone tripping on your walkway.
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Can't one get 1M smooth usually if they aren't low time and have a clean record? Especially in my situation flying for a major airline with over 3000 hrs, no violations or accidents, and maintaining proficiency in piston AC, not just jets
 
Dana said:
I believe flying is statistically about as safe as motorcycling... but there are enough motorcycles out there that the annual loss rate is fairly consistent and predictable, while aircraft accidents go up and down from year to year. There are also enough bikers as a percentage of the population that excluding them could be a significant amount of business; if they excluded all pilots it'd be barely detectable. And a plane can do a lot more damage to the schoolhouse it crashes into than a motorcycle.
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Lets quit the hyperbole with that one and talk about facts. Out of all the fatal GA accidents (about 300 a year)......how many people on the ground are killed in those? Less than 1% I'm willing to bet (I'll research it and let you know). One has a better chance of being killed in a bear attack or struck by lightning than in an aircraft accident as a non occupant.
 
Warlock said:
Plenty of dead passengers as well in your 300…
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That's where most of the liability will come up.

A few airplanes crash into buildings every year. Considering how much fuel an airplane carries, that can be quite a big fire.
 
My PA 28R did an estimated 2.7 million in property damage dropping a 2000 ft transmission tower when the FAA employee flew into it with his daughter he had kidnapped. Plenty of other losses associated with that as well. None of us have enough insurance in certain situations.
 
I'm in the process of redoing all our insurance. The old broker isn't doing his job. When I have asked about the prices, he responds that everything is up. That is true, but when I shop I see some relief. He doesn't seem interested in looking into better prices for us. The last couple years our prices have gone up dramatically. So I have been shopping. Seems like this happens every few years. Anyway, I am surprised at our umbrella. The insurance company asked if there were licensed pilots. I answered yes. I expected to see exclusions covering aviation related endeavors. But none so far. The agent asked for details, but not the insurance company what my qualifications were. That is the last I have heard of that. I expect to get a notice anytime of the exclusion. The insurance co seemed more interested in unlicensed off road vehicles and water craft. They did exclude those.
 
It's not just GA. My umbrella policy covers nothing with regard to any form of aviaton. There are other exclusions: tenant issues, RVs that aren't covered by one of my other policies, etc...
 
Warlock said:
It’s not just a payout but the cost of legal representation…anything aviation carries a higher risk of litigation…only thing worse is anything space related…the potential payout is considerable compared to the premium dollar available.
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Generally, the primary policy pays the defense costs; not the umbrella.
 
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