Couple of Insurance Questions

[ScottM]

It is renewal time around my household and I just got the notice from USAIG my current insurance company. They gave me two quotes. One of which is the same as last year for $1033. The other is for $1440 with some slightly different liability coverage that they did not explain very well.

All I have is the two quotes. The current coverage and one of the quotes has single limit each occurance including passengers of $1,000,000 and a sub limit per pax of $100,000. The other policy has the single limit as $1,000,000 CSL and N/A for the sub limit. What the heck is 'CSL'? Why is it a little over $400 year premium more than the first mentioned liability coverage?


Also I am out shopping some other quotes, I got one from Avemco already but what other insurance companies are out there and which ones are the good ones?

 

[Let'sgoflying!]

combined sublimit?

 

[wsuffa]

CSL is most likely Combined Single Limit.

The quote without sublimits is called "smooth" coverage. It's more expensive because it has no sublimits per passenger... IOW, should there be an accident, the payout might be higher (instead of limiting the payout at $200,000 if there are two passengers, you'd have a maximum limit of $1 million to split).

$100,000 is very little if there should be a need for payout. Personally, I choose the smooth....

 

[Joe B]

Yup, CSL is "smooth" coverage and Bill described it well. I, too, went for smooth coverage based on the recommendation of an aviation attorney. To borrow Bill's example: If you have $100,000 sublimits per passenger, you are personally on the hook for any injuries, suffering, untimely death, or other benefits above $100,000 a jury may award to each passenger or their estates.

The argument against smooth coverage is that if you have more than one passenger the first attorney to get through trial can get all your insurance, leaving you to pay for the others.

I figure any way you look at it, if I seriously injure my passengers I'm in big trouble. But with smooth coverage the insurer will pay out the full face value of the policy, reducing my overall exposure. Youse pays your money and youse takes your chances.

Regards,
Joe

 

[Ed Guthrie]

In all probability it is your passengers who will be suing you should anything unfortunate occur. Given that reality, personally I don't understand why anyone with a four seat aircraft would purchase a $1M/$100k policy. If you are going to go that route, why not purchase a $300k/$100k policy? FWIW, I have always carried $1M smooth.

 

[ScottM]

In all probability it is your passengers who will be suing you should anything unfortunate occur. Given that reality, personally I don't understand why anyone with a four seat aircraft would purchase a $1M/$100k policy. If you are going to go that route, why not purchase a $300k/$100k policy? FWIW, I have always carried $1M smooth.

Most of the time it is just my wife in the plane as my pax. If I crash and hurt her she would be sueing herself. And the difference between this smooth coverage and the $1M/$100k is $400/year. For something I really do not think I need.

Other than USAIG and Avemco what insurance companies do you guys use?

 

[Ed Guthrie]

Most of the time it is just my wife in the plane as my pax. If I crash and hurt her she would be sueing herself. And the difference between this smooth coverage and the $1M/$100k is $400/year. For something I really do not think I need.

My point above being that you have coverage you will most likely never access given the per seat limits you have chosen. If you never or rarely carry passengers and the lower per seat limit doesn't bother you, why not drop the overall coverage to match the sum of the passenger seats (or close)? For example, $500k/$100k? The policy premium will decrease.

 

[ScottM]

My point above being that you have coverage you will most likely never access given the per seat limits you have chosen. If you never or rarely carry passengers and the lower per seat limit doesn't bother you, why not drop the overall coverage to match the sum of the passenger seats (or close)? For example, $500k/$100k? The policy premium will decrease.

Got it, FYI: I have a quote from Avemco for that lower coverage and it is $18 less than the higher coverage from USAIG. I am still trying to decide. point taken and understood.

 

[AdamZ]

Most of the time it is just my wife in the plane as my pax. If I crash and hurt her she would be sueing herself. And the difference between this smooth coverage and the $1M/$100k is $400/year. For something I really do not think I need.

Other than USAIG and Avemco what insurance companies do you guys use?

Then again Scott it only takes that one time. But anyway if you do want the lower limits Ed has a great point.

 

[Dave Siciliano]

Yes, Scott. You have to decide what kind of potential liability you have; then, what you have to protect. The more your potential liability rises and the more assets you have to protect, the more the smooth coverage becomes attractive/necessary. I know several folks that have higher coverage amounts than this.

If you're just flying immediate family and you haven't accumulated a lot in assets, the lower coverage may be fine. You also have to deal with your conscious a little. If you really were PIC and someone was hurt bad, would you only want them to be able to collect $100,000? Some of these serious injuries where the person has life-long medical treatment can incapacitate them for life and require a lot of treatment. OTOH, one can only afford so much.

In either case, the insurance company will offer a vigorous defense if needed.

Best,

Dave

 

[whiskeymike]

In all probability it is your passengers who will be suing you should anything unfortunate occur. Given that reality, personally I don't understand why anyone with a four seat aircraft would purchase a $1M/$100k policy. If you are going to go that route, why not purchase a $300k/$100k policy? FWIW, I have always carried $1M smooth.

Only problem is this ignores the potential for damage to persons or property outside the aircraft. Midairs do happen and, while you may not be around to worry about it, your heirs will have to deal with the result. In any event, increasing the non-passenger coverage is not expensive, thus no reason not to carry higher limits there.

 

[ScottM]

In any event, increasing the non-passenger coverage is not expensive, thus no reason not to carry higher limits there.

I disagree it is expensive, the increase per year is $407 or a 39.4% increase in the premimum.

BTW the with the $1M/$100k is it that everyone in the plane shares the $1M and each passenger can also get up to $100k in addition to that their share of the million? Not just be limited by the sub limit/pax?

 

[Ed Guthrie]

Most of the time it is just my wife in the plane as my pax. If I crash and hurt her she would be sueing herself.

My apologies, but I missed one other point in my first response. In the example here, if your wife sued she would be suing you and your portion of the estate (and for all intents and purposes the aircraft insurance company), with any eventual payment to be made by the insurance company up to the policy limit, not by you (or her). If your wife were seriously hurt in an aircraft accident the aircraft insurance policy money could be all that stands between her (and you) and financial ruin due to medical bills. Most work health insurance policies have a $1M lifetime benefit cap. Twice now I have watched that number blown through taking care of family members' medical costs. Covering my loved ones means more to me than covering the average other passenger.

The only correct answer is the correct answer for you and your family, but points to ponder.

 

[Ed Guthrie]

BTW the with the $1M/$100k is it that everyone in the plane shares the $1M and each passenger can also get up to $100k in addition to that their share of the million? Not just be limited by the sub limit/pax?

Nope, just the opposite. Each passenger can only claim $100k against the insurance company. Any passenger judgement amount above $100k would come out of your personal assets.

 

[ScottM]

Nope, just the opposite. Each passenger can only claim $100k against the insurance company. Any passenger judgement amount above $100k would come out of your personal assets.

I guess I really do not understand why that is since the $1M liability on the quote says "Single limit Occerence INCLUDING PASSENGERS", emphasis mine. It sounds like the PAX in total would be able to claim part of that million.

So what does that really mean?

 

[Ed Guthrie]

Only problem is this ignores the potential for damage to persons or property outside the aircraft.

Not ignoring, just putting it into context. If you have $100k/seat limits and a $500k total policy your coverage for the average bystander is actually better than the coverage for the average passenger (bystander has $500k maximum payout available while passengers are limited to $100k).

Midairs do happen and, while you may not be around to worry about it, your heirs will have to deal with the result.

Midairs are one of those big thrill events that everyone frets about but are actually a quite rare occurrence. A friend of mine was in a midair a few years back which caused me to look at the NTSB data--I researched his accident and en route to other things discovered there were only 13 midairs in that year. Coincidentally, every other midair that year resulted in fatal injuries to one or or people in one or both aircraft. Last year there were 17 midairs, 10 involving fatal injuries and 6 involving non-fatal injuries. By comparison, according to the NTSB website search function there were 2014 accidents last year, 1504 involved non-fatal injuries and 434 were fatal. IOW, insuring for a mid-air is a low probability bet. The odds on bet in an aircraft accident is a passenger injury or fatality not related to a midair—hence why per seat limits will significantly reduce the insurance premium.

In any event, increasing the non-passenger coverage is not expensive, thus no reason not to carry higher limits there.

The reason non-passenger coverage is not very expensive is that it is a low probability event. What you suggest is disproportionately increasing coverage for folks that you don't know and probably won't hurt, but holding very limited coverage for folks you do know (probably family members and/or friends). YMMV, but this logic just doesn't work for me, hence why I pay the extra for $1M smooth coverage.

 

[bbchien]

I guess I really do not understand why that is since the $1M liability on the quote says "Single limit Occerence INCLUDING PASSENGERS", emphasis mine. It sounds like the PAX in total would be able to claim part of that million.

So what does that really mean?

Scott, you may never be able to get smooth coverage again. I'd go for it. $100,000 will not even prepare a defense for you against such passenger's estate.

 

[whiskeymike]

I disagree it is expensive, the increase per year is $407 or a 39.4% increase in the premimum.

The increase you quoted is to go to the full limit for passenger coverage; the limit for persons and property outside the airplane hasn't changed.

 

[whiskeymike]

The reason non-passenger coverage is not very expensive is that it is a low probability event. What you suggest is disproportionately increasing coverage for folks that you don't know and probably won't hurt, but holding very limited coverage for folks you do know (probably family members and/or friends). YMMV, but this logic just doesn't work for me, hence why I pay the extra for $1M smooth coverage.

Actually, I'm not suggesting anything. You suggested carrying 300,000 vs 1mill and I simply pointed out that that portion of the cover can be increased for little premium. If someone did that and had an accident involving injury to persons or property outside the airplane as well as passengers, the limit would be exhausted by the passengers.

 

[Ed Guthrie]

Actually, I'm not suggesting anything. You suggested carrying 300,000 vs 1mill and I simply pointed out that that portion of the cover can be increased for little premium. If someone did that and had an accident involving injury to persons or property outside the airplane as well as passengers, the limit would be exhausted by the passengers.

If you go back and read my posts you will note that I'm not in favor of lower limits at all. However, I do find it a bit illogical to carry $1M total liability with $100k sublimits, especially in a four seat aircraft. My point is simply that anyone carrying $100k sublimits (not a practice I recommend) might wish to dump some of the total liability coverage since the odds of tapping it are very small. If a pilot is willing to bet his/her assets on $100k coverage for a highly probable victim why would s/he carry much higher coverage for a much less probable victim? Illogical.

 

[gprellwitz]

Another point to consider is that if you plan to fly for various organizations, eg. Young Eagles, FLight for Life, etc., or participate in air rallys they may dictate that you have a policy of $xxx.

Young Eagles has a requirement of $100,000/seat, and they then up that to $1M, so just about any of the alternatives discussed would work for that.

As an EAA member, pilots participating in the Young Eagles program are eligible for an additional $1 million of passenger liability insurance coverage, if they carry a minimum of $100,000 per seat liability insurance.

I think that the 99's air rallys had a $1M requirement.

 

[GMascelli]

Reading along the same documents, just got my renewal letter from AOPA/AIG Aviation.

I have a different situation since I RENT and do not own (not yet anyway) my paperwork shows limit of liability 1 mil/100K for $205 and I need to cover for damages to non-owned aircraft. What is the best recommended limit of liability for this portion?

It ranges 10K for $150 through 200K for $1625

Any thoughts ?

 

[TMetzinger]

If you go back and read my posts you will note that I'm not in favor of lower limits at all. However, I do find it a bit illogical to carry $1M total liability with $100k sublimits, especially in a four seat aircraft. My point is simply that anyone carrying $100k sublimits (not a practice I recommend) might wish to dump some of the total liability coverage since the odds of tapping it are very small. If a pilot is willing to bet his/her assets on $100k coverage for a highly probable victim why would s/he carry much higher coverage for a much less probable victim? Illogical.

That can depend on the type of flying you do and where you do it. Even though I fly solo, if I have an off-airport landing in my area (Northern VA/DC/MD), even if I avoid killing anybody on the ground there's a good chance I'm gonna get seriously sued for property damage. There's a story of a pilot who killed a prize Angus Bull once and got successfully sued for something like $450K.

 

[flyingcheesehead]

I have a different situation since I RENT and do not own (not yet anyway) my paperwork shows limit of liability 1 mil/100K for $205 and I need to cover for damages to non-owned aircraft. What is the best recommended limit of liability for this portion?

Find out what your FBO's deductible is, then get the next higher limit. I've had at least one place I rent from say that their insurance goes after the folks with no damage coverage for the full amount, but if they get the first $20K they cover the rest under the FBO's policy. Not a guarantee of course, but $1625 for a renter? Sheesh.

The other option is to see what the planes you fly are really worth (ie 172N = ~$40,000) and go with that instead.

 

[Lawreston]

Scott: I do not represent the below; however, Ms. Walker delivered the best quote. i.e. Several hundred dollars less than the commonly-referenced big names.

http://www.traversaviation.com located in St. Louis. The quote for my 1971 C-172L Skyhawk($40,000 hull) was only slightly increased over prior coverage(elsewhere) on my 1975 C-150M($25,000 hull). [The typical $1,000,000/$100,000]

1-800-825-9105

HR