We, the staff of Aircraft & Marine Assurance, will continue to provide nothing less than the outstanding service that you have come to expect from us. Now and in the future, we offer our dedication and loyalties to help our organization grow and prosper.

Archived News

November 2007 | August 2007 | July 2007

May 2007 | March 2007 | January 2007 | November 2006 | September 2006 | July 2006 | May 2006 | March 2006

January 2006 | November 2005 | Septemer 2005 | May 2005 | January 2005 | September 2004 | August 2004

July 2004 | May 2004 | March 2004 | January 2004 | December 2003 | August 2003 | May 2003 | April 2003

General News


November 2007  

As we come close to the end of another year, we review what has transpired so far in 2007. After experiencing a long period of rates that remained at a level which seemed too high for many, they are finally headed downward. The market is much softer, and the addition of at least three new aviation insurance companies makes for more competition. The new companies are mostly focusing on the more expensive and complex aircraft. However our favorite companies for the Grummans are equally anxious to get that business! Global Aerospace is still our leader for the Grummans. They are even quoting pilots up to age 90 if they have an annual medical as well as an AOPA number. Can’t beat that! I remember about twenty years ago, the 40 year old underwriters at one particular insurance company thought that the 67 year old pilots were on their last leg and their policies should read: “dual only”. As the underwriters get older, the “older” pilots don’t seem that old anymore. Good thing! Speaking of “older” pilots, some of you getting up in age have been transitioning to the LSA category. This has been working out quite well. The AIG policy states that a current medical is not required if the plane category does not require a current medical either. This means that if you lose your medical during the policy period, and your policy is with AIG, there will be no interruption in coverage as you will continue to be covered under the circumstances. Remember this is only for Light Sport aircraft policies. This won’t work for your Grumman. Some of the other companies writing LSA aircraft quote differently depending on whether or not you have a current medical. Another good point in favor of AIG is that even though you may be flying under the LSA designation, they will give you credit for any and all ratings you have obtained in the past i.e. ATP and IFR even though these do not apply to the LSA aircraft. Some of your are choosing aircraft already in existence that meet the LSA criteria, but others are opting for the new models such as the CT Design. Unfortunately, planes such as the CT have been experiencing high loss ratios. Apparently, they are too light, and pilots don’t know how to land them very well. One company has stopped writing the CT altogether. The CT Design has actually been our most popular new LSA aircraft so this is not good news! As we end the year, we would like to leave you with just a few concerns that are high on our list for each of our clients. Please review and get to know and understand your policies. “Shopping around” to get the best quote has been going on for quite some time now. If we switch you to a different company, please make note that conditions of the policy will also change. The “open” clause, for instance, is different with each company. This is the clause that allows you to loan your aircraft to other pilots not listed. Please do not let anyone who is not a named pilot fly your aircraft unless they do meet the open clause. Another concern high on the list is that students are excluded from manipulating controls if they are not named in your policy. We all know that the FAA states that if there is a PIC in the aircraft, it’s OK for a student to take control. Well… it’s not OK with the insurance companies. Remember that they pay the claims, not the FAA. So please call us before allowing students to fly your aircraft. Next item – the named pilots do not receive all the benefits of the policy that are extended to the owner of the policy. These extras include coverages such as use of other aircraft, hand held equipment, and premises. Our staff at Aircraft & Marine Assurance wishes to extend the best for the coming year to you and yours. We thank you for your business and support. Everyone fly safe next year!


August 2007  

Who owns your aircraft?

Sounds like a silly question at first. However, we have had experience with more than one claim in the past when the settlement turned into a complicated issue because the registered owner was not who all of us thought he/she was (including our insured). For most of you, this is not a concern because you are very conscientious about registering your new aircraft with the FAA in Oklahoma City. Within a couple of months, you receive confirmation from them and you’re set to go. In one situation we had, our client had purchased the aircraft on contract from a friend or family member. He never did get around to re-registering the plane under his name with the FAA. The insurance policy always renewed in our client’s name. A few years after inception, our client had a claim. After the usual round of repair estimates and visits from the adjuster, it came time to issue the settlement check. The insurance company called us to advise us that our client was not the registered owner. Apparently, he had never gotten around to notifying the FAA. It might not be a bad idea to get on the web and check the N# registry for your aircraft. We have been researching N#’s ourselves more than we used to. Another reason for our doing this is that sometimes our clients register their aircraft in a company name. This company can either be a holding company just for the sake of the aircraft for tax or legal purposes or it can be an actual operation which owns our client’s aircraft, but he/she has just forgotten to mention this to us. If your aircraft is registered under another name, your policy should be issued in the same manner. You can be listed as well (personally) as an additional insured. If we insure your aircraft, and your policy does not read correctly, please call us for correction. This scenario also would also include your wives. If your wife is listed on the registration, she can be sued along with yourself if a claim is filed against you, the owner. She also will need to be protected by your policy, and her name should appear alongside yours. Maybe your dad or brother is also an owner, even though not a pilot. Make sure his/her name appears on the policy. If you are purchasing or selling an aircraft on contract, all parties should remain covered by the policy. The new owner has a financial interest, but the prior owner will certainly continue with his interest until the plane is paid off. Make sure your agent is aware of this scenario when you call for quotes. If you have had a lien on the plane, your agent has been required to add the bank to your policy.


July 2007  

We have recently had two claims which were partially denied. These were each with a different insurance company. Both claims involved engine damage. Policies regularly exclude damage to any and all parts related to the engine or auxiliary power unit. In both of these instances, some amount was paid for damage to other parts of the aircraft. However, the engine parts and any of the components of the engine were excluded. In the claim relating to the starter, the manufacturing company did cover the loss. The wording from the Global policy is as follows: There is no coverage for 1) wear and tear, 2) deterioration 3) mechanical or electrical breakdown, failure or malfunction. The breakdown, failure or malfunction or any component, accessory or part thereof shall be considered breakdown, failure or malfunction of the entire engine or unit and any resulting physical damage to the engine or unit shall also be considered to be “mechanical or electrical breakdown, failure or malfunction.” Also excluded is damage to the aircraft engines and auxiliary power units caused by foreign object damage (damage caused by object(s) not a part of the engine or unit or the accessories of either) whether resulting from ingestion or otherwise or by heat which results from the operation, attempted operation or shutdown of the engine or unit. One of the claims denied had to do with an engine compartment fire, and the second had to do with parts from the starter unit which broke off into the engine. The AIG policy states their exclusion as follows: loss due and confined to wear, tear, deterioration, freezing, mechanical, structural, hydraulic, pneumatic, or electrical failure or malfunction. Wear, tear, deterioration, freezing, mechanical, structural, hydraulic, pneumatic, or electrical failure or malfunction of any engine component, accessory, equipment or system is considered a failure or malfunction of the entire engine, component, accessory, equipment or system. Loss to aircraft engines and auxiliary power units caused by heat or temperature change from the operation, attempted operation or shutdown of the aircraft engine or auxiliary power unit unless resulting directly from other loss covered by this policy. There are times when an engine would be covered. These could include the aircraft being totaled, a prop strike, or collision. Prop strikes are considered an “accident” and would be covered. In addition, the engine tear down to determine if and what type of damage had occurred would also be covered. Some other claims were caused by either neglect or by bad annuals. It’s prudent to have a good Grumman mechanic conduct your annuals. These claims often result in emergency landings, and the plane is totaled. Some of the mechanics may not be familiarized enough with the Grumman aircraft, and in addition, they may not be carrying product liability insurance With the exception of the new Tigers, most of our Grummans are getting up in age. Again, be very prudent on whom you pick for your annuals and service in general. We had a claim in a Bonanza many years ago. The plane made an emergency landing in the Gulf of Mexico. After the investigation, a rag from the last annual was found in the engine.


May 2007  

We are all looking for ways to save on our insurance premiums. Some companies are willing to make adjustments to allow this, and others are not. Our main request has been to increase the deductible. Most companies have set deductibles and do not want to change what is in their system. However AIG will allow a 10% reduction on the hull premium in exchange for a 10% of the insured hull amount deductible. This would equate to about a $100 savings for a $16,000 deductible based on a quote we were working on the other day. Our client had actually requested a $10,000 deductible which was not available. When you study this equation, it doesn’t seem worth it to go this route. What we have observed with all of the companies is that the savings you receive on the premium are far too low in comparison to the high deductible. Considering how many requests we have been receiving for higher deductibles, maybe the insurance companies will take another look at this area to see if the premiums can be restructured more favorably for our clients. For some reason, it really has not been worthwhile for our markets to consider this so far. We have seen more deductible variations for aircraft that are hangared as opposed to those tied out. This, of course, makes more sense since the risk for tied out aircraft is definitely higher for the insurance companies. The usual deductible for tied out is $500 with US Specialty and only $100 for hangared. Another company offers a $500 deductible for all claims inside the hangar, but $2500 or higher for all other claims (whether the plane is tied out motionless or moving). Other companies don’t change the deductibles are all in the area of being hangared or not. In a further effort to reduce premium, please do not contemplate lowering the insured value of your aircraft. If you are thinking about self insuring a percentage of the aircraft, say one-third of the value, you risk having the plane totaled if you have a claim. Each company has an equation they use to determine if it is less costly to pay you the stated value of your policy and keep the salvage or repair your aircraft. The lower the value on your policy, the more likely it will be that your plane gets totaled. Once in a while, the insured may have first chance to purchase his plane back if it’s totaled, but usually it goes to the highest bidder. All in all, this route is not worthwhile either, the least favorable and the riskiest. Having your aircraft hangared reduces the premium by about 5%. However, hangars are harder to obtain and getting spendier so this may not be an option. The markets are beginning to stabilize, and the premiums are not increasing like they were about three to five years ago. Today’s premiums are very good. With the price of fuel increasing as it is, insurance is certainly one of the lower expenses of the aircraft. It is our recommendation that you do not reduce your insured hull value, but strive to insure your plane for at least replacement value . . . . so don’t forget to call us if you make improvements to your aircraft.


March 2007  

For quite some time, it has become customary for pilots to place their aircraft in holding companies such as LLC’s or corporations for liability or accounting purposes.  We recently had a client tell us that he wanted to purchase renter’s insurance to fly his aircraft because it was owned by an LLC.  If he were to do so, he would not only have dual coverage, but he would probably be voiding the renter’s policy.  Non owned/renter’s insurance is strictly for aircraft not owned by the pilot.  Even though the aircraft was registered in an LLC, the partner of the LLC was still basically the owner of the aircraft.  This is why an LLC or corporation for liability purposes is no fool-proof remedy for not being sued. However it’s probably better than nothing. Maybe your pilot-attorneys out there would have some information relative to this that you could share with us. On the other hand, having your aircraft registered to a company from which you lease the aircraft can be very beneficial for tax purposes.  If your aircraft is used substantially in conjunction with your business, you should consider doing this and confer with your attorney and accountant about the specifics.  If your plane is registered to a company, you should also have yourself added to the policy as an additional insured.  There is no cost for this, and you will be protected on an individual basis as well as the company’s. 

We have commented on the following many times, but it keeps coming up.  If a student is getting instruction in your aircraft, he must be added as a named pilot.  Please do not wait until he/she is ready to solo before adding him/her.  Even though there is a CFI in the aircraft is who is PIC, there will be no coverage if the student is manipulating the controls and there is an accident. Unfortunately, we had such a claim several years ago.  Our client didn’t think he had to tell us about the student because there had always been a CFI in the plane with him. One day there was a prop strike, and the claim was denied.  Remember that even though there is a CFI in the aircraft, the risk increases when a student is at the controls.  Though it doesn’t happen often, the student can place the aircraft in a configuration that the CFI cannot undo.  We have had such claims, and there was, of course, no trouble in payment of the claims because the students had been named as authorized pilots.  When it comes to private or better pilots who are out of medical temporarily, the insurance companies would prefer that these pilots fly dual with a CFI rather than with another pilot who meets the open clause even though this is not specified in the policies.  Another preference the insurance companies have is that the PIC fly in the left seat.  Again, as we all know, there is no FAA reg that states this.  This becomes more of an issue depending on whether or not there are dual brakes or dual controls.  Should you have any concerns, please call to review your particular situation. 

If you think you might be losing your medical for a while, it is better for you to remain as a named pilot on the policy even though you will not be flying.  If you delete yourself from the policy, when you are ready to be named again, you will be considered a “new” pilot to the policy.  If you are advancing in age, it will be harder to add you back on.  To minimize any problems,  continue to name yourself with a notation that you’re out of medical temporarily.  Do not delete yourself unless you are sure you will not want to be named again.

[back to the top]


January 2007  

We are happy to offer some really good news in our article this month.  AIG is pleased to announce that they are working hand in hand with AOPA to promote the Accident Forgiveness and Deductible Reward program for general aviation.  This program applies only to clients flying piston power aircraft and for non commercial purposes.  In time, it might be expanded to include more.  Once a policy has been obtained through AIG, the insured needs to complete an Air Safety Foundation (ASF)  course either online or in person every six calendar months.  If the insured loans his aircraft to others, all pilots using the aircraft also need to comply with the course requirements every six months.  If the insured has a claim, he needs to submit a copy of his course completion with the claim.   AIG will then waive the deductible up to $100.00.  The best part is that he will not be surcharged for the claim the following year at renewal.   There are currently three types of claims which will not be “forgiven” under this program.  1) Accidents arising from drug or alcohol use 2) Fuel exhaustion and 3) Knowingly flying with an expired medical or BFR.  There is also a limit as to the number of claims that will be forgiven.  AIG is happy to forgive one claim every 36 months.  Unfortunately, claims can only be forgiven if the course has already been taken.  In other words, you can’t have a claim and then take the course.

Due to the large number of claims caused by the hurricanes on the East coast, the state of Florida has implemented a Florida Hurricane Catastrophe Fund.  Nearly all companies writing in Florida are adding a surcharge to offset these claims. The companies which have not added the surcharge yet will probably be doing so in the near future.  The charge is currently running around 1% which is not too much. 

When a client purchases insurance, he is required to complete and sign an application at the inception of the policy period.  Every two to three years after that, the insurance company needs a new application completed and signed to update their files.  If you receive an application to complete, it is imperative that it be returned as quickly as possible. Because of their agreements with the re-insurance companies, some underwriters have only a small window in which to collect these applications.  In some states, they are regulated by the Insurance Commissioners’ offices.  In California, for example, when a binder expires, it cannot be extended.  In other states, we are allowed more time.  This morning, we had a policy cancelled by the insurance company because they have still not received the application from our client.  Also when you are completing your application, please check it over and complete all the boxes marked.  We often receive applications that are missing information such as medical or BFR dates.  These applications will only be returned to us for completion if we submit them with missing information.  Remember that an insurance policy is a contract between you and the insurance company. . .  thus – the reason for your signature.  Should a claim arise, the insurance company needs to have a signed affidavit on hand reflecting the information you provided when the policy was purchased.  Some companies like London Aviation make your signed application a part of the policy itself.  Please be sure to call if you ever have any questions regarding this. 

[back to the top]


November 2006  

Are you out of medical?  Is there a reason why you can’t be pilot in command of your aircraft?  Every now and then, we have pilots, either in their 30’s, 40’s, or older who for some reason have lost their medical.  If this happens to you, you will probably want to be able to keep flying and stay current.  However – how do you do this if you’re out of medical?  The FAA stipulates that if another pilot who is PIC is in the aircraft, you can fly the aircraft.   However, since the FAA is not the party to pay any claims if they occur, you will have to abide by the rules of your insurance company.  We had a client  who had lost his medical so he took himself off the policy.  After about three years, it appeared that he might be able to obtain his medical once again.  Since he had been off the policy for some time, his insurance carrier did not feel comfortable with letting him fly the aircraft even with another PIC in the aircraft until he had regained his medical. We could not move him to another company because each company we approached said they would have allowed him to fly if he had already been underwritten by them, but they did not want to write him as new business.  If you  have a problem with your medical, please let us know as soon as possible.  We can approach your company and let them know that you wish to fly with another pilot.  If the company knows from the get go what is happening, they will be usually be able to accommodate you in your situation.  The problem arises when you are off the policy for some time, as in the case above, and you wish to be allowed to fly again.  In this particular situation, the insurance company was   nervous about letting someone fly who had been out of medical for about four years.  The best thing would have been for him to remain as a named pilot and fly with another pilot until he was able to regain his medical.   Each company has different underwriting opinions about this situation.  And even then, the companies agree that it is a gray area because who is to say who was piloting the aircraft if a claim does arise.  What each of the companies did state is that they would prefer to review each situation on an individual basis before making any commitments or offering blanket opinions.  The insurance companies are very good about working with pilots when they have any kinds of problems or concerns.  However, it’s always better if they know right away rather than months or years down the road.

For several years now, all the insurance companies have sustained high losses in the Southeast due to the hurricanes.  The incurred costs have normally been distributed with higher premiums across the board.  However, three companies have just announced that Florida business will incur a surcharge on all premiums to compensate for the hurricanes.  We anticipate that other companies will follow suit, and that other eastern states will be added to the list depending on how many losses there are in any particular state.  Even though this surcharge will by no means cover all the hurricane expenses, it will obviously be a step in the right direction to place the higher premiums where the losses are.

All of us at Aircraft & Marine wish you and your families the best of holiday seasons and a very safe and happy 2007!

[back to the top]


September 2006  

Depending on the type of aircraft you have, your premium will often reflect what kind of a home airstrip you use.   Most companies are not increasing the premiums for the Grummans  based on grass strips.  The only exception for the Grummans are the Cougars,  which of course, must be kept on paved strips.  Those of you owning a more complex aircraft in addition to your Grumman will either obtain higher premiums ( up to 25%), increased deductibles  or be declination altogether on unpaved strips.  We have heard the argument that a well-maintained grass strip is easier on gear than hard pavement.  However, it’s hard to convince the insurance companies of this. We have had two claims where the aircraft had slid off the runway on wet grass strips.  A small aircraft may be good to land on 800’ but if the strip is sod  and wet, and if the elevation is high, 1400’ may still not be adequate.  When you are asked where your aircraft is kept, that information is what your premium will be based on.   If your home airport is paved, it does not mean that you can’t occasionally land on unpaved strips.  We have, however, seen some problems in obtaining quotes for folks who have their Grummans at private grass strips.  Some companies will decline to quote these strips while others will increase the deductible to $1000 and not allow other pilots to fly your aircraft unless they are named onto the policy.  This will eliminate the risk of having other pilots who are not familiar with your grass strip landing on it.  Another concern is the elevation of the airport.  When the elevation is greater than the length, we all know that’s a problem!  Global Aerospace, for instance, will not quote any aircraft based at high elevations if the airport does not meet the parameters of their formula.  In a nut shell the length of the runway is decreased by 10% for every 1000’ of elevation.    If your insurance company allows you to fly out of these high places, remember to keep your gross load light and take off early in the morning when temperatures are cooler.   We lost an aircraft and four people in Utah last summer because of this scenario.  This was truly sad because the pilot was very high time.  Each company has their own requirements for runway lengths.  For example, a high end Bonanza would be required to be on a paved 2500’ strip at least.   A lower value retractable gear aircraft could get away with 2300’ paved or 2800’ sod.  An average fixed gear could be approved for a 2300’ sod or 2000’ paved.  Multis usually need at least 3500’ paved.  Some companies review each airport  case by case, while others do not. 

Believe or Not!  It’s probably not a good idea to have someone with a flashlight waving you in at the end of the runway when you’re landing at an unlit airstrip.  You might run off the runway like a Cessna 182 did recently.   It’s also not a good idea to try to change the date on your medical certificate.  The FAA and other unforeseen data sites have ways of keeping track of things like that!  Remember to keep your eyes on the hose when refueling.  With the price of avgas these days, you don’t want to be paying for several gallons on the ground.  Last but not least, if you have to talk to someone in the tower after landing, please be sure to turn off your engine first.  You don’t want your plane to keep going and run into the terminal or a $2,000,000 aircraft.  (Yes, we had a claim for that too!  Remember – insurance is for the unforeseen!)

Joke of the Day!  We often get asked what the column headings (in initials) stand for such as:  TT is total time, RG is retractable gear time, TW is tailwheel time and MM is make and model time.  For those of you wondering what AGE stands for, it means “how old are you?”.

[back to the top]


July 2006  

It has come to my attention that one of our members encountered a bad experience after he purchased his aircraft.  Some of the unknowns came up, and he was faced with either paying for the repairs himself or getting the seller to pay for them.  In this case, a poor pre-buy inspection had been conducted and many items had been overlooked.  Keep in mind that it is essential to have a disinterested party perform the inspection. In addition, make sure the person performing the pre-buy is well qualified.  This not only pertains to his qualifications as an A & P or AI, but how well does he know the type of aircraft you are purchasing?   This may sound elementary, but with all the costs of purchasing a new aircraft i.e. hangar fees, insurance, trips to go see the aircraft etc., there is surely a tendency to save a few dollars here and there.  This is one area that deserves special attention and is well worth the cost.  Our client who was faced with this dilemma asked if he could submit a claim.  Regrettably, your insurance policy covers occurrences for which you are responsible and come under your  policy period.   For first time buyers – don’t purchase an aircraft based on your emotions.  It’s easy for this type of buyer to see a shining airplane that starts up OK.  He likes it, writes a check and takes off.  I know this is nothing new, but having had this situation come up lately, I thought it would be a good idea to refresh the subject.

Coming Home – As you all know,  one of our members returning  from the Texas meeting had engine problems and lost his aircraft very close to an airport.  What caused this to happen to an aircraft in very good condition?  The reason I’m writing about this is because I have experienced this very same occurrence and can relate with this member about the shock and fear that is felt.  When this happens, you don’t think about saving the aircraft because it can always be replaced.  The prime concern will be for you to fly the aircraft to the ground and not become a lawn dart in the process.  Keep you head on and rely heavily on all your learned piloting abilities to save your life!

[back to the top]


May 2006  

In our modern day society heavily ladened with law suits, it appears that everyone wants to be added as an additional insured to someone else’s policy.  In our every day activities, the first to appear on this list are the airports.  At the top of this list are nearly all airports in California and New York.   There is no charge to add your airport as an additional insured to your policy.  It makes sense that if your aircraft will be kept on their property, they will be covered should your bird cause damage or injury on the airport.   Keep in mind however, that the wording in the policy specifically states that coverage will be afforded for claims that are caused by your aircraft.  Being named onto your policy as an additional insured does not give the airport the right to come back to you for any claims unrelated to your aircraft.  In this respect, you don’t have to worry that your policy will be over-extended.   We will automatically include your airport as an additional insured onto your policy at renewal whether you change companies or not.  A certificate of insurance will also automatically be mailed or faxed to your airport each year.  Naming other entities becomes more complicated when they are not the usual governmental bodies.  If your hangar is privately owned, and the owner wants to be named additional insured, there may be a charge.  With AIG, the cost for this extra coverage is about 10% of the liability premium or $50.00 minimum.  With our Grummans, this would not exceed the $50.00 minimum.  Now that naming the airports has become rather routine and painless, we are seeing a couple of new demands being placed on our insureds when they try to sign up for a hangar or tie down.  One is that the airports are wanting not only to be named as additional insureds, but they want to be provided with a waiver of subrogation as well.  This means that if something happens to your aircraft on the airport property, even if it’s the fault of the airport, i.e. fuel truck runs into your hangar, your insurance company cannot subrogate against the airport.  Most insurance companies are not willing to attach this clause to your policy.  Some will do it, but again for a fee of  usually 10% of the hull premium or $50.00 minimum.   Another clause the airports have trouble with sometimes is the one that states that your policy is excess coverage while theirs would be primary.  What they want is for your policy to be primary which means that if anything happens, they go to your policy first.  The insurance companies aren’t thrilled about this either.  Some companies are willing to delete that particular clause for a charge of $50.00.  If your airport is requiring any of the above, let us know so that we can make sure the insurance company of your choice will be willing to comply.  It’s hard for you folks when the airports are requiring as much as they do.  If you don’t sign their lease and comply, you don’t get a home for your bird.  We will try to do all we can to help out.   We saw some requests on the Grumman Gang for higher  limits on the liability i.e. $2,000,000 to $6,000,000 “smooth”.  We do have an excellent company that will write excess liability in increments of $1,000,000 if the pilot carries at least $1,000,000 “smooth” on his base policy.  In turn, we have excellent markets for the “smooth” or Combined Single Limit as it is commonly referred to.  If you are interested in higher limits, feel free to give us a call to explore this possibility for you.  The only requirement is that you have around 350  - 400 hours of total time. Another comment was made about calling a “reputable” agent for quotes.  We would like to say on our behalf that we have been in business over 30 years.  We write for all the major markets including all those that AOPA writes for.  We also offer the AOPA and EAA membership discounts when applicable.  Our renewals are shopped with several and all companies offering competitive  quotes.  It is our desire to offer the best policy to each of our clients for the best possible premium.  On this note, keep in mind that the lowest premium may not equate to the policy that best meets your needs.

[back to the top]


March 2006  

Besides the named pilots on your policy, who is authorized to fly your aircraft?  Please refer to the Open Pilot Warranty clause of your policy or “other” pilots who fly your aircraft.  If you have an AIG policy and a fixed gear aircraft, other pilots will usually include anyone who has a private or better rating and your permission.  If you own a retract or taildragger aircraft, the open pilot clause will probably require about 500 hours of total time, 100 retract/taildragger time and 25 in the same make and model of your aircraft.  These parameters vary with different companies.  If the person to whom you wish to loan your aircraft meets the total time requirements but not the make and model time, is he still OK to fly your plane?  NO.  Each and every requirement of the open clause must be met.  Sometimes an instrument rating is required for the more complex aircraft.  One company requires the pilots to be within the ages of 25 – 65.  If anyone of these requirements is not met, you must call your agent and request that your pilot friend be named to your policy.  If the other person has as many or more hours than you do, there should not be a charge to add him/her.  If they are less qualified, there most likely will be a surcharge for the addition.  We still get calls from folks who are allowing a student to fly their aircraft without adding him/her to their policy.  We are only being notified when the student is ready to solo.  Is this OK?  Once again… NO.  All students must be named from the very beginning.  Of course, this will definitely increase your premium, with some companies more than others.  Even though the student is not pilot in command while receiving dual, this still involves a risky situation for the insurance company.  More than once, we have turned in a claim where the student placed the aircraft in a configuration that the CFI was not able to rectify.  We have been asked a few times if – instead of naming a pilot to the owner’s policy – could the pilot purchase a non owned policy to receive coverage while flying the aircraft? This is not a good solution at all.  First of all, a non owner’s policy only affords coverage to the owner of that policy for his negligence.  This means that if your pilot friend purchased a non owned policy to fly your aircraft, and he had an engine failure during flight and totaled the aircraft, would there be coverage under his non owned policy?  Maybe . . . maybe not.   If after investigation, the adjusters determined that the pilot had not been at fault, there would be no coverage under the non-owned policy, and there would also be no coverage under your policy if the pilot did not meet the “Open” clause.  You might ask – what kind of accident would not be the pilot’s fault?  The incident mentioned above, engine failure is a good example.  This would not have been caused by the pilot unless perhaps he ran out of fuel.   Non owner policies are good as extra coverage for you when you rent from FBO’s or if you do fly other aircraft not owned by you. However, do not depend on the non owned policy as the sole source of coverage.   Remember that there is a gray area.  This is when you have an accident for which you are not liable.  Who is then responsible for the claim?  Be sure that there is another policy in force, either at the FBO or on the plane you are using and be sure you are authorized to fly according to the terms of that policy.  FBO’s cover students and renters.  For a privately owned aircraft, check the “open” pilot clause to see if you meet those requirements.  If you do not, ask the owner to name you to his policy before flying.  If you are a student, always make sure you are named to the policy.  There are no “Open” pilot clauses that cover students because he or she is NOT a pilot as yet!

[back to the top]


January 2006  

Gang - I have been flying some 50 years and after my first and only crash, August 14, 2005, I can testify that  flying can be dangerous.  I say this because we have lost some very good friends who were killed in an aircraft accident, namely Billy Crumpton and others.  All were very good friends.  I would like to take a moment to talk about Billy's family - especially Miss Peggy who will have a very hard time raising their granddaughter alone.  She and Billy assumed care of her when she was very small.  I know the hardship that a single woman can face trying to raise younger children.  It's very tough.  Saying this, I have set up an education trust for Billy's granddaughter.  If you would like to contribute  a donation,  please send a check or money order to The Jessica Crumpton Educational Trust.  Mail it to: Bank of New Albany  Post Office Box Drawer 811  New Albany,  MS  386252.  I am very sure that Miss Peggy and Jessica would be most grateful.  All of you who knew Billy will share in our great loss,  and this is the least we can do.

Back to insurance matters - I would like to address a policy exclusion that has brought grief to our members.  The exclusion reads as follows:  "under coverage F, G. and H. Physical Damage:  Caused by and confined to wear and tear - deterioration, mechanical or electronical breakdown or failure of equipment, components or accessories installed in the aircraft."  One of our members was taxiing his aircraft from one spot on the airport to clear the way for another aircraft.  When he moved the aircraft several feet, the front landing gear collapsed causing damage to the prop which required an engine tear down inspection.  The adjuster said the insurance company will inspect and/or repair any damage to the engine but may not pay to repair the nose gear.  The hang-up is spotlighted in this last paragraph which reads "unless such physical damage be coincident with and from the same cause as other loss covered by this policy".  All insurance policies cover sudden occurrences.  They do not cover parts which wear out over a period of time.  The part which broke due to wear and tear may not be covered.  However, subsequent damage to the aircraft will.  Claims like this  take more investigation to determine the cause.  The first course of action is to go back to the last annual.  Here again, there may be problems if the mechanic is no longer around or if there is information missing.  We have discussed this before in prior articles, but it's to your advantage to use certified mechanics who carry product insurance themselves for the work they perform. This coverage will protect you and provide coverage in the event the mechanic's work might cause a claim. 

We had mentioned a couple of months ago on the Grumman Gang that we would address the concern about using an agency close to home.   Our agency writes policies all across the country from Washington and California  to Florida and New York.  We are only a phone call away.  As you are aware, are agency is located on the West coast.  However, we speak regularly to clients on the East coast. However,  the clients with whom we are in contact less frequently are as close to us as the ones who keep their aircraft down the street at Pearson Airpark.    One of our clients recently had a bird strike in Florida.  Because of some concerns he had, we were on the phone with him, his adjuster, and his insurance company several times over the course of about a week to make sure his claim was being processed properly and to our satisfaction.  In a nutshell, it doesn't matter where your agent is located.  When you report a claim, your agent will report it to the insurance company. Their claims office may, and probably will be, several states away from you.  If possible, the insurance company's claims office will try to settle your claim directly from their office.  If that is not possible, or if the claim is severe in nature, they will assign an adjuster in your immediate area to meet with you personally.  Very often, pictures and estimates you submit will be all that the claims office needs to settle your claim.   We very seldom have a problem with claims. All of the companies we use to underwrite your policies are A+ rated and have excellent claims handling records.   On occasion, there is a situation which requires our attention.  As your agency, it is our duty to assist you in the claims process.  Our staff is dedicated to your best interest.

[back to the top]


November 2005  

Last year about this time, the Light Sport Certificate was of interest to all pilots. It was new to us as well. For several of our clients, it meant that there was light at the end of the tunnel for those who thought they would have had to give up their many years of flying. For those with a private or commercial license already in effect, you must apply for the Light Sport Certificate before the private license is denied or revoked by the FAA. AIG was and continues to be one of our leading insuring companies in this arena. This Sport Pilot category was installed in their on-line quoting system which makes for quick and easy quotes for our clients. Even though the Light Sport category was just another quoting option to us and our clients, it represented many months of working out the details with the FAA as well as aircraft manufacturers for AIG. Often the question is ? does this aircraft meet the parameters of the Light Sport? Thus far, the ruling has been that the aircraft have a gross take off weight under 1320, no more than two seats and have a maximum level speed of 119 knots. Some examples of this type of aircraft would be the Ercoupe 415, J-3 Cub and Aeronca 7. Besides these older and familiar names that have been around for a long time, there are several manufacturers planning on producing various new models to meet the specifications of this new category. The factories will also be offering kits for which they can be available to help the builder from 50% to 99%. In addition, some foreign manufacturers are showing interest in these aircraft. One model in particular we have received calls on is the Flight Design CT. All of the foreign aircraft have to meet the specifications and approval of ASTM ? The American Society for Testing and Materials. They will also have to be certified by the FAA. The non-owned policy from AIG has also been enhanced to include these aircraft. This will be an added benefit to CFI's who purchase non-owned liability with AIG and need coverage for the new category. Besides, AIG, the EAA Program through Global Aerospace is now quoting these aircraft. There are still a couple of companies out there which are still not set up yet for this. They will probably quote later on down the line after they've had a chance to see what is happening. Depending on the aircraft you have in mind, the quotes have been running a bit higher than those quotes reflecting a private rating. After the insurance companies have had a chance to accumulate loss ratios for these aircraft, the rates may decrease if all goes well. So far, all is going well, at least with AIG. Keep up the good flying! For those wishing more information about this, please look up www.sportpilot.org for more details.

For those of you who have your policies unwritten by AIG Aviation, the premium for Terrorism Coverage (TRIA) was lowered to $10.00 a few months ago. Their reasoning was that it would be easier to add TRIA to all policies than exclude it (when the premium was higher). This means that if you do not sign the form that is included with your packet stating that you do not want the coverage (for $10.00), it will automatically be added to your policy by AIG. So if your invoice is off by $10.00, this is what's happening.

[back to the top]


September 2005  

This article is one I never thought I would be writing. This is about my day of ?infamy?. First of all, I'd like to thank all those who called and were concerned about me.

August 14 started out as a normal and average day on which I was to have a normal and uneventful flight to Los Angeles in my Prescott Pusher. I left Pearson Airport in Vancouver , Washington . Two hours later, I cleared the alleged TFR with the Redding , CA tower. After about a mile south of the airport, my airplane started to vibrate and shake violently. I pulled back on the throttle and noted my altitude at 7500'. When I pulled the throttle forward again, nothing happened. I only got a whistling sound from the fan that cools the rear engine. I knew I had trouble because when I pushed the throttle forward, I had no momentum. At this point, I realized that the prop was gone. I called the Redding tower and requested an emergency landing. Not knowing the extent of the damage, I made a flat 180 turn heading to the airport. I noticed that I was descending about 700' per minute, my best glide ratio. It didn't take very long to realize that I would not make the airport. I called the tower again and advised them that I would not be making the airport. There was a pilot flying in the vicinity of the airport, and he told the tower that I could possibly land at another airport near my left. I made a quick glance and couldn't see the alternate airport. I then told Redding I preferred to stay on track and not look for another airport. My nose was pointed directly at a Minute Mart. It was about 11:40 AM and people were fueling up. I decided to head for a nearby field. As I descended to the field, everything was set up OK until I got across the road and saw the power lines. It was necessary to lower the nose thus bleeding off my glide ratio to go under the power lines. There were a clump of trees that I had thought were rhododendrons, but as I got closer, I saw that they were good size trees. As I went through the trees, I had a split second to say ?Oh!!!? The plane struck the ground at about 70 miles per hour. I had my face covered with my right arm to prevent the trees from smashing across my face. When I realized I was on the ground, I sat there momentarily. I then broke my window and climbed out and went to sit under a tree until the medics took me to the hospital. I'm telling this story because in retrospect I'd like to give you some hints on saving your life if you ever encounter a similar situation. For you who fly retractable gear aircraft, you have very little time to decide whether or not to lower your gear or not. You will have to make a quick decision depending on the terrain. Lowering the gear helps you stop sooner without skidding for a longer period time. Secondly, the question of fear arises. That's why I tell everyone who flies that they should learn something about their aircraft with every flight. I did not have time to be afraid, to call anyone except the tower or to ask for assistance. When you're coming down with no power in a high sink aircraft, you had better think fast and make the right decisions. The wrong decision will kill you. There is a lot of talk about having safety tools in the aircraft in the event of a forced landing. These might include a hammer to break the glass and to cut your safety belt. However, when an airplane stops at that momentum, everything changes place during the crash landing. I had an ax and a cutter but couldn't find either one. I was in a hurry to exit so I used my elbow to break the glass. I hope that none of you will have to experience such a situation. I was very lucky to escape with only a compression fracture in my back. All the years that I have been flying, I always carried full flight coverage. This is a perfect example of why you should cover your aircraft for the full replacement cost. This was truly an example of an occurrence that you would never anticipate. My insurance company settled very quickly.

[back to the top]


May 2005  

What went wrong? The weather was perfect VFR ? the pilot was 43, an aircraft mechanic, high time, and been flying for many years. He was returning home from a 25 years class reunion. The aircraft was borrowed from a fellow mechanic. He left his final fuel stop and arrived on a down wind leg of his home airport. He turned base but never turned final. He died at the scene after his small plane reportedly clipped some power lines before crashing into trees and brush about 7:45 pm . What happened? After the autopsy was performed, a high amount of carbon monoxide was discovered in his body. This very same scenario could happen to any one of you. Carbon monoxide is very deadly and cannot be detected by smell. According to the NTSB and the FAA, it's a leading killer of pilots. Some time ago, a pilot by the name of Ash Vij had a close call such as this. He became very ill during his flight. Immediately upon landing, he was taken to the hospital where he was advised that 30 minutes more in his aircraft would have been his last. This led him to manufacture a detector that was reasonably priced to prevent this from occurring again. The name of his company is CO Guardian. You can look them up on the web at www.COGuardian.com, or give them a call at 800 639 7139. Tell Ash I sent you and that you are a member of our group, and he will give you a discount. Another company you can contact is Chief Aircraft at 541 479 4431. They have a stick-on detector.

A dilemma recently arose when our insured totaled his aircraft after he had installed $70,000 of new avionics but had never called us to increase the insured value of his aircraft. Since his plane was totaled, he was offered a settlement check in the amount for which he had originally insured his plane. Of course, this amount did not reflect the new avionics. He was then offered right of first refusal on the bidding. However, he couldn't decide on what to do, and the bid process went public which meant there might be higher bids than his coming in. Some folks have suggested the a pilot in this situation should remove the new radios before the adjuster arrives on the scene. This is not a good idea. Remember that when new equipment is added to your aircraft, entries are made in the log book. For those of you who have ever had a claim, you know that the first thing the adjuster does is review both pilot and aircraft logs. In the case of our friend above, the adjuster would have asked to have the new avionics returned to the aircraft if the owner had taken them out. Some policies provide for automatic increase to hull value in the case of a totaled aircraft, but these are usually for about 5% only. If you significantly improve your aircraft, you need to call to adjust the insured hull value. Remember to do this at the time of engine overhaul as well which usually adds the most value to your aircraft.

[back to the top]


January 2005

Over the past couple of years, some of you have opted to purchase the terrorism coverage when you renew your aircraft insurance. Since 9-11, claims associated with terrorism have been excluded from all policy coverages.  When 9-11 occurred, all the insurance companies involved in the devastation paid their own claims.  After that, Congress decided to implement a plan whereby the Federal Government would partially reimburse the insurance companies in the settlement of future terrorism claims.  This was all in the hopes that the insurance industry could figure out a remedy if anything like this were to ever happen again.  This has been referred to as TRIA – the Terrorism Risk Insurance Act.  Well – it’s scheduled to expire at the end of 2005 unless Congress renews it.  No one has yet  come up with an alternate plan for funding monumental losses of this nature.    Unless it is renewed, claims associated with terrorism will continue to be excluded. Measures to implement this have already been approved in most states. This would also have impact on higher rates to cover areas where the insurance companies would not have the option of excluding terrorism --  i.e. workers’ comp or commercial lines which are also very  much in need of this backing from the Federal Government.  This is especially a serious problem in populated areas as apposed to rural areas.  Actually, TRIA has been very much like the FDIC which has been a source of reassurance to all of us for many years.  It would be inconceivable not to have this protection in place when we open up a bank account.   I’ll bet many of you can’t remember when the FDIC was not around.   The insurance industry needs support from many types of businesses to get Congress to renew TRIA.   It is for the benefit of all that this measure needs to pass again. Without this support, we will see our number of markets shrink once again.   For the long term, we all need to find a working solution to this situation.  It may be that Congress, with the urging of businesses, will decide that a permanent form of TRIA needs to be instated rather than having to address this every two or three years.  However, there has been a lot of skepticism on Capitol Hill as to whether or not the Federal Government should have to shoulder this responsibility.  Should terrorism coverage be paid for by the “property owners” or by “taxpayers”?   Studies have found that having pools designated solely for terrorism claims could be established.  The problem with this is that it would take years to build them up, and even then, there would not be enough funds to cover dramatic losses.  Another avenue of consideration has been having “sub-limits” for claims related to terrorism.  Needless to say, this is a new page for the insurance industry.  As we can see, insurance is there to cover a wide array of exposures which evolve as time goes by.  None of us really knows what type of risk will be needing coverage next.  All we know is that we are very fortunate in having many fine companies working hard to “keep us covered”.

[back to the top]


September 2004

With the ongoing increases in premiums since 911, everyone is shopping like crazy each renewal. As we have mentioned before, we shop every piece of business with every applicable carrier for all of our renewals. So . . . please . . . . leave the shopping to us! If you don't, you may lock us out of markets from whom we could have obtained a better alternate quote for you. However, the purpose of bringing this up again, is to emphasize that you should not always look for the lowest premium all the time. Even though all the policies are basically the same, they all offer a variety of different extras which may or may not be of importance in your own particular situations. One example of this has been the recent hurricanes in the Southeast. AIG has been the only company so far to offer reimbursement of expenses when an insured moves his aircraft away from the storm area. This, of course, will have no impact on someone in southern California who may be more concerned about traveling to Central America and having that area be covered under his policy's territorial description. Sometimes the Open Pilot Clause is of concern. This clause refers to others to whom you may allow the use of your aircraft. Some companies have more lenient terms than others. For those of you who never loan out your aircraft, this clause won't matter, but we have had several folks switch to another company and pay more because they needed a different Open Pilot Warranty clause. Remember to review some of the differences in policies when you are renewing to make sure coverages of importance to you will not be dropped if you switch carriers.

By the way ? for those of you who do have AIG policies and live in the Southeast, rest assured that if you cannot move your aircraft, and it is damaged by weather, your policy will cover repairs. It is, however, to the advantage not only to the insurance company, but to the insured to have an aircraft unclouded by damage history when it's time to sell.

Because of the high concern with premiums, some of you are calling the minute you receive a new rating or a hangar, etc. to receive a credit on your policies. We're sorry to say that none of the insurance companies gives any credits until renewal. They really don't have the manpower to endorse policies every time a pilot in America moves up a notch on the rating scale. However, sometimes our insureds have realized dramatic increases in flying time or ratings ? especially in more complex aircraft ? and really want to change carriers midterm. When they do this, remember that there is a fee of about 10% to cancel before the policy comes up for renewal. This extra charge may make it worthwhile to wait until renewal for a new rate at that time. Keep in mind also that no carrier will re-rate a premium mid term. All rating changes are done at renewal.

We recently received a call from an insured who had read his policy cover to cover ? what a surprise that was! He was concerned about the malicious act or act of sabotage exclusion in the ?War, Hi-Jacking and Other Perils Exclusion Clause? in the AIG policy. He was under the impression that malicious mischief and vandalism were always excluded from coverage. This is not the case. This would only be excluded during times of war or hi-jacking. Please refer to the definition of ?Physical Damage? on page 11 of the AIG policy for an explanation of this coverage under normal circumstances. It reads: ?direct and accidental physical loss of or damage to property (also called loss). Excluded are depreciation, or any damages for loss of use.? Over the years, we have reported many claims relating to vandalism which have all been covered.

[back to the top]


August 2004

We get numerous requests from our clients who are selling or have already sold their aircraft. We'd like to bring to the attention of our older pilots that if you're over 70 years old, it would be very wise to keep your current policy in force only if you plan on purchasing another aircraft later. The reason I'm bringing this up is because if you have no policy, and you're over 70, you become ?new? business. Most insurance companies have an age cutoff for new business, and it makes it difficult to find coverage for the new aircraft. It's much easier to add a second aircraft to your old policy and then delete the first one than it is to start fresh.

Once again, we've had hurricane damage in Florida . Many of you may not know that AIG will pay up to $500 or 50% (whichever is less) for you to move your aircraft at least 100 nautical miles away from the storm path. This comes with the Broad Form Endorsement which is attached to most of the AIG policies at no charge. Even though the insurance company will pay for weather damages, a responsible pilot will always to what he can to minimize damages to his aircraft. This includes moving his aircraft when impending damage is foreseen. It is pilots who are not concerned about being involved in the security of their aircraft, who are contributing to rate increases.

ASA Forms have been around for quite some time and will, if submitted in a timely manner, generally ?keep you out of jail?. However, with the advent of TFR's, it is necessary for the pilot to be more cognizant of his flight environment to avoid busting a TFR. They do and can pop up even though it wasn't there when you left your home base. If you break one, there will be two F16's ordering you to land immediately. I suggest that you monitor Guard 125.5 so you can answer these folks when they tell you to get out of the air. In this circumstance, a NASA form may not help. GADO advised me that you can expect a minimum of 125 days suspension for busting a TFR. This circumstance may or may not be constant for all areas. I might add that Flight Service also told me that many of you VFR people will not talk to a briefer. This includes weather briefing, flight plan, flight following. He gave me an example of a pilot who flew from the East Coast to Eugene , OR . He never spoke with a briefer. He picked up his airplane, took off, headed West, and not one time did he call for a briefing. Upon arrival in the Eugene area, the weather deteriorated, and the ceiling started down, and he started taking on ice, and the only words they heard before he impacted the terrain was ?help, help, May Day, May Day?. Fly Safe!

[back to the top]


July 2004

Hi! Folks ? I was going to write about something else, but after reading all the postings on the Grumman Gang lately, I feel I need to address some issues. First of all, it appears that some of you are sometimes getting quotes from Global Aerospace (from us and from other agencies) which are coming in lower than the original ?AYA Group? quotes. This is correct. I would like to state first of all, that our agency, Aircraft & Marine Assurance, is dedicated to serving you our clients, most of whom are the AYA members. We are here to find the best policy at the best premium for you (commonly known as shopping!)

In 1976, our agency was started to provide insurance for the Grummans which were very hard to insure at the time. For many years, our AYA Group has had an insurance program in place with about half a dozen insurance companies due to the fact that there have been mergers and buy outs. The Group is currently with AIG Aviation. In the early years, we didn't shop much as no one wanted to insure our birds. Because of this, many folks don't know that we do write for all the major carriers which includes all the companies that AOPA uses for example. We also offer the AOPA discount which is available through AIG Aviation only. In actuality, we are a full service agency similar to AOPA or other agencies. We have for many years, shopped with other insurance companies to see if the Group premiums were the best for our members. If other quotes came in lower, we always offered them at renewal to each of you.

In the past, it has been very hard to beat the AYA premiums. However, since 9-11, the insurance industry has had a complete turn around. About three years ago, I made a detailed analysis of our rates and realized that most our folks (over a ten year period) were getting $100's more in insured hull value while at the same time paying sometimes $500 less for that insurance. If we had kept up that rating structure, we would have been paying you for insurance. We were actually using the same rates we had been given about 10 years earlier by one of AIG's predecessors. It was clear that adjustments had to be made. The economy also has had a serious impact on our rates. I don't foresee much improvement until we see an upswing in our country's financial situation.

A couple of companies have opened new offices in the last few years to increase business for the light aircraft. One of these was Global. Whenever this happens, we see low rates coming from these companies to build reserves. (Keep in mind, that as soon as a base is established or if losses are too high, these low premiums are short lived and disappear over night.) This meant we had to pay more attention to these other companies and shop. In the last few years, we have only transferred about 15% of our Grummans to other companies due to lower premiums. We feel the AIG/AYA policy is a very good policy for the Grummans, but when there is a substantial premium difference elsewhere, it makes little sense not to move the business. Keep in mind, that the choice is yours. We never transfer our insureds to another company without their request to do so. In the last year or two, AIG has experienced above average Grumman losses. They have increased not only our Group premiums, but all Grumman rates throughout the company. Global is still providing very competitive rates. However, a couple of years ago, we were seeing quite a rate increase with our Grummans through Global. Most of the policies we had transferred to them were back with AIG at renewal. It appears that we will be having many transferred to Global again. However, at renewal, we will again be checking the markets and Global may or may not get that renewal business. They have already increased tail wheel aircraft by 40% to 50%. They have also increased premiums on all aircraft across the board ? though not as much as AIG. If you read the notes on the Gang, you will realize the losses that AYA is experiencing. We insured the near fatal accident which occurred when one of our pilots left for Oshkosh the end of July. A few years ago, we are sad to report that the Traveler held a position on the ?do not write? list by Southern Aviation. They considered it a very dangerous aircraft. (Their loss ratio for the AA-5 was apparently not the best that year!) About the same time, another company no longer writing aviation, would not write students in the 2-place Grumman. These are just two examples of how our aircraft has been dealt with in the past by other companies. Even though some of you have concerns about AIG, remember that they were there for us when no one else would write our Grummans. Over the years, their rates have been more stable than any other company. Our AIG underwriters also have attended many AYA conventions over the years. They have had the most interest in our Group and have made every attempt to maintain a good rapport with the AYA. Note also that if you or your aircraft do not fit into Global's parameters, you will not get a quote from them. For instance, if your bird is a Ken Blackman ?special? , it will have to be insured by AIG as Global's system cannot insure it at the higher hull value you will want. AIG finally had to increase their rates only after experiencing such a high level of claims. We need your help in improving this loss ratio. If it's due to pilot error, we all know what to do. Insurance should be more for theft, weather damage, and other losses over which we have no control ? and believe me, there are plenty of those!

At any rate, we want you to know that we do our best to provide the most personal service and the lowest rates we can for you. You should also know, that if you call us after you have contacted other agencies, we will be locked out of the other companies. If you call us first, you can be assured that we will cover the marketplace for you. Should you have any concerns, please be sure to call me at 800 466 4944.

[back to the top]


May 2004

Many folks are under the impression that if a pilot is named on their policy, that pilot will be exempt from any blame from the insurance company should he cause an accident in the aircraft. The truth of the matter is that a policy is placed in force to protect the ?owner? of the aircraft. The pilots who are named, or those who meet the ?Open Pilot Warranty? are not insured in the same way that the owner (referred to as the ?Named Insured? on the policy) is. To state it more clearly - the owner is the ?Named Insured?, and the pilots are the ?named pilots?. If you read your policies, you will see that the ?Named Insured? is the one who receives the benefits of the policy. The ?named insured? is usually referred to as you in your policy. Some of the benefits that you receive may include the use of non-owned rental aircraft or coverage for the hangar in which the aircraft (once again of the owner) is kept. This coverage for use of non-owned aircraft, for example, does not extend to the named pilots. You can relax, however. Insurance companies don't go out every day to subrogate against the pilots who are allowed to fly on your policy. This is not a practice that would place the insurance companies in a favorable light.

Nonetheless, we must keep in mind that this is an avenue which they are entitled to take. It rarely happens. If and when they do take this route, it is usually because of some blatant or willful violation. It rarely happens. Some companies are willing, for a fee, to offer a ?waiver of subrogation? which means they will not be able to go after a named pilot. CFI's often wish to have this endorsement. AIG, for instance, charges 10% of the hull premium to offer this waiver to a pilot. If anyone is flying more than one aircraft belonging to others, another good route is to purchase a non-owner policy. AIG, once again, has a very nice policy for renters. This policy covers the pilot for a wide variety of aircraft that he may use. The parameters for aircraft covered under this policy read: ?fixed wing, non- pressurized, land aircraft having non turbine single engine of 450 horsepower or less (including non-powered sailplanes) and a capacity of no more than 7 total passengers and/or seats and having a standard airworthiness certificate?. AIG is also now offering a 10% discount for renewal of the non owner's policy.

More pilots are becoming familiar with the clause in their policy identified as the ?Open Pilot Warranty?. This refers to other pilots allowed to fly your aircraft. Every company has their own OPW. This means that if you have switched companies, do not assume that the open clause on your old policy will be the same as the one on the new company's policy. The broadest open clause is with AIG and applies to many fixed gear aircraft. It reads ?any private or better pilot with your permission?. For many retract aircraft, that same clause require a minimum of an instrument rating, 500 total hours of which 100 are in retract gear and 25 in the same make and model. Another company, for example, for that same retract aircraft may require 750 total hours, 250 retract hours and 25 in the same make and model for others to fly your aircraft. So be sure you review your policy if you will be loaning your plane to anyone. Remember also, that the open clause is not meant for folks who fly your aircraft on a regular basis. It is written to cover the ?occasional user? of your aircraft. Those flying your plane on a regular basis should be reported to us and named so that the premium can be rated on all pilots regularly using your aircraft.

[back to the top]


March 2004

I am writing this article in order to prevent some unsuspecting pilot from being hurt by some maintenance shop that does poor work and has no products insurance coverage. Following is a recap of an incident where our pilot was out of luck.

Our insured took his plane in for an annual. We do not know if this was a first time visit or not to this particular shop nor do we know if our insured had inquired about the mechanic's insurance beforehand. At any rate, after the annual was almost completed, the shop mechanic conducted an engine run up. While the engine was being tested, the oil cooler failed allowing four quarts of oil to escape from the engine ? all this being unnoticed by the mechanic. After the leak was discovered, the shop concluded that there might have been engine damage from the lack of oil. The shop wanted our insured to pay for the engine removal, shipping, and inspection etc. of the engine before they would sign off on the aircraft. In addition, they denied any responsibility for the incident. Subsequently, our insured called us to file a claim at the insistence of the shop. The results of the claim inspection indicated that the engine damage was caused by wear and tear which is excluded from all policies. This entire episode could have been eliminated if the mechanic had checked the oil cooler and replaced it. A new cooler is certainly cheaper than a new engine. What does one do to protect oneself from such situations?

•  Make sure you know who is working on your plane. Ask if they have products coverage. This coverage is similar to that of a physician's malpractice insurance. This type of coverage has gotten quite expensive during the last few years. However, if the shop is clearly liable for work not properly performed, you will have no recovery if there is no insurance. The large shops all have insurance so it's the smaller ones or the mechanic working alone who usually does not carry any coverage at all.

•  Do not accept the aircraft until you are sure all work has been completed. Once you take possession of the aircraft and sign the work order, it's in your care and custody once again and out of the mechanic's hands. Remember that short cuts can hurt you in the long run.

•  Watch what's going on in the mechanic's shop. He might be very well qualified, but is he allowing someone else to do the work who has little experience?

We recently had a similar situation with an insured getting his prop overhauled. The work was not properly performed, and the A D's were not corrected. Our insured had paid a substantial amount in advance for parts. The mechanic left town. Our insured had to take the prop to another shop for completion of the work. A claim was filed, but once again, it was denied. Each claim that is filed is unique, and each one is thoroughly investigated before any decisions are made. One must also remember that the laws of each particular state will always prevail in each investigation.

[back to the top]


January 2004

All of our insureds are very special people to us. However, we do have some who belong to the rich ? some to the famous. Among these is Dr. LeRoy Chiao, Ph.D., a NASA Astronaut who has given us permission to say a few words about him. Dr. Chiao is from the Danville , CA area. He and his bride enjoy flying the Grumman Tiger they have insured with us. Dr. Chiao holds several degrees in chemical science and speaks fluent Mandarin and Russian. Because of his vast knowledge, he is frequently invited to give technical seminars on honeycomb material, bonded panels and aerospace composite materials. The locations of some of his seminars include the Beijing Institute of Aeronautical Materials as well as the Changsha Institute of Technology in the Peoples Republic of China . He is also listed in Who's Who in Science and Engineering. He is the recipient of many awards and is also a contributor in the International Encyclopedia of Composite Materials. After completing his studies in Southern California , Dr. Chiao was extensively involved in process, manufacturing, and engineering research in advanced aerospace materials. Selected by NASA in 1990, he became an astronaut in 1991. Dr. Chiao is currently assigned as Commander of Expedition-9, the next mission to the International Space Station. He will be accompanied by fellow Russian astronauts. We are very proud to be affiliated with Dr. Chiao. For more complete information, please visit http://www.jsc.nasa.gov/Bios/htmlbios/chiao.html. Before taking your next spacewalk, be sure to read the tips outlined by Dr. Chiao at http://neurolab.jsc.nasa.gov/chiao.htm.

Back to insurance ?we occasionally receive calls from folks looking to buy salvage from the insurance companies. Just one word of caution ? unless you have done this before, please be careful. Be sure to get the opinion of an appraiser as well as A & P. The cost of repairs is on the rise these days. That's why the insurance company decided to total the bird in the first place. It was cheaper to do so. I just spoke with someone the other day who wished he had had a better idea of how much it was going to cost to bring his bird online. Another area of concern are the many folks who are considering moving to an experimental aircraft. Be aware that unless you build the aircraft yourself, the maintenance costs are the same as a regular aircraft. Mechanics who work on experimentals charge as much or more as for the standard category. Insurance can also be at times unavailable depending on the model. There are some models out there that no company will insure. Be sure to contact us before you put your money down. You might purchase something you can't insure. With the economic crunch the way it is right now, folks have been seeking ways of saving money so they wouldn't have to sell their aircraft. If you can manage it and know some good people, partners is a good way to go. Up to three owner/pilots does not increase the premium. (Rate is based on least experienced pilot.) Sometimes four pilots may add a surcharge depending on the insurance company. Many folks out there are really sorry they opted to sell their plane. When they do decide to purchase another aircraft later, they can't replace it for what they sold their bird for. Better to keep on flying and cut down on food. If you do, be sure you have good life insurance. We have just acquired a new line of life insurance for pilots with Ohio National. We have found that these rates are much better than any we've seen for quite some time. So if you've had trouble finding life insurance because you're a pilot (or not eating regularly) please call me, and we'll review your situation. I'm sure we'll be able to help you.

[back to the top]


December 2003

We have been receiving more and more calls regarding situations involving a CFI. Many are concerned about who would be responsible in the case of an accident. First and foremost, be sure that your CFI meets the Open Pilot Warranty. This is the clause which defines the parameters of others who may fly your aircraft with your permission. This clause will read something like 500 total time and 25 in the make and model. If your aircraft is a retract or tailwheel, there will also be stipulations about those type of hours as well. If you cannot find a CFI who meets the Open Clause, please call us, and we will name that individual onto your policy as a named pilot. Take note, however, that naming your CFI will not release him from any responsibility in the case of an accident. When he is piloting the aircraft or giving dual, he is the pilot in command. I remember three claims in which the insurance company subrogated against the CFI who was visibly in the wrong. CFI’s are like the rest of us and can also make mistakes. If your CFI is working on his own and is not covered by a large FBO policy, you can ask that a Waiver of Subrogation in his favor be added to you policy. If you are with AIG Aviation, which many of you are, the charge for this is 10% of the hull premium. An even better coverage for him would be a non-owner policy including the special clause to protect CFI’s. This policy is similar to errors and omission coverages. It covers the CFI for a variety of aircraft which fall within certain parameters. This policy which is underwritten by AIG is a claims made policy. If the CFI keeps his policy in effect, he will have coverage for a claim made now not only for instruction currently being given but for past instruction as well. No CFI should be without a personal non owned policy unless, of course, he is well covered under a large policy by his FBO. As an incentive to keep these non-owner policies renewed each year, AIG is now offering a 10% renewal discount whether the policy includes the CFI clause or not.

Many of you are looking at higher deductibles as a way of keeping your premiums down. So far, none of the underwriters is interested in making any changes here. All insurance companies have filed their rates (which includes deductibles) with the various states in which they are approved, and they can’t keep making changes to these filings. In the past, we used to be able to amend the deductibles. A higher deduct of around $1000 might have saved you about $25 to $30. We are, on the other hand, seeing higher set deductibles for the older aircraft with some companies. These are coming in at $1,000 or $2500 depending on the type and year of the aircraft. Again, these cannot be lowered either for a higher premium in their place. Some of you who just got a hangar for your bird have asked if you could be given the hangar discount midterm. Unfortunately, we cannot extend this discount until renewal. The same goes for new ratings or higher hours as well as the AOPA discount. We try to include all the information we can at the inception of the policy, and that’s our last chance until renewal. The insurance companies just cannot make numerous premium adjustments during the year. They’d have to double their personnel to stay afloat, and that would, of course, increase your premium. Since AIG started giving the AOPA discount, we have updated nearly everyone’s file to include this number. If we don’t have your number on file, rest assured that you will be asked for it, and that you will receive the AOPA discount at renewal – if you are insured with AIG that is. For those who are with other companies, remember that we do shop will all available markets. AIG’s quote with the AOPA discount is included among all quotes.

[back to the top]


August 2003

We recently received an inquiry from a pilot who wanted to know if he would be covered by his insurance policy if he ran out of fuel. It would be quite unfortunate for that to happen, but yes, he would be covered. That is what insurance is for. It provides coverage for our “mishaps” as well as those “other” accidents which were “unavoidable”. I just returned from the Scottsdale office of AIG aviation where I had a meeting with one of the Vice Presidents. He informed me that most of their claims are due to “pilot error”. Most of the accidents reported in NTSB are categorized as “pilot error” in lieu of any other reason. If we never made mistakes we wouldn’t need insurance. This means that many claims would never have to be made if we were just more attentive. We’ve had many gear up claims over the years. It’s surprising and actually shocking to hear that quite often this type of accident happens to an experienced pilot with hundreds of retract hours under his belt. Does this mean that the more hours we have, the less careful we tend to be? When the rates starting increasing after 9-11, those pilots who had the most flying time realized the greatest premium increases. On the other hand, the low time pilots had lesser increases. When we quizzed AIG about this, they said they were seeing more claims made by the experienced pilots. Remember how attentive you were during your first flight? Be more cognizant of what’s going on around you. There are more airplanes out there, and the system is more rigid due to 9-11. We have so much new equipment now to facilitate our flight that we should be able to pay more attention to our flying than ever before. Remember not to kick the tire and light the fire.

Every so often, we get a call regarding coverage for parts of the aircraft that are temporarily taken from the aircraft for replacement or maintenance. We just had a call about an engine being shipped back to the factory for service, and the client was wondering if it would still be covered. The AIG policy will cover all parts of the aircraft as long as they have not been replaced. The engine would be fully covered until it was returned back to the aircraft as long as the owner had not replaced it with another engine in the meantime. Same goes for radios and any other equipment taken out for whatever reason. The reason for this, obviously, is that the insurance company does not want to insure two engines, etc.

We recently heard of a situation which we thought might be worth mentioning. A twin engine pilot had a small claim which he reported. When the adjuster came out, the first thing he did was check the log books (both the pilot’s and the aircraft’s) which is how adjusters start out all claim investigations. However, it was discovered that the pilot had forgotten to renew his medical. He withdrew his claim, but the insuring company declined to renew his policy at renewal time. Apparently, because of his qualifications it was hard for the agent to find a quote with another carrier. Please remember to check those dates ahead to time. Sometimes it takes a while to schedule an appointment for a medical or BFR. Occasionally (and usually in smaller communities) one of our clients has been grounded because his BFR ran out, and he had trouble lining up a CFI. Remember that when you request a quote and your policy is bound, agents do not require copies of your log book, but should there be a claim, everything will be checked for accuracy as reported by you to the insurance company. Please total your hours on a regular basis and make sure all is in order so you won’t have to guess when filling out your forms. Thanks for your help!

[back to the top]


May 2003

It is with great sadness that in this issue we must share with you the passing of one of our dearest employees, Dianna Bunch. On May 8, she passed to her reward after suffering from a brain aneurysm. Her husband and family were at her side. Over the eight years that Dianna was with us, she had come to know many of you on a first name basis. Even though we have hundreds of clients, she made a point to try to remember something about each one. When you folks called in to renew your coverage, it was usually her with whom you spoke. She was a real people person and truly enjoyed getting to know our clients on a friendly and individual basis. It seemed like no matter who she was talking to, there was something of interest for her to bring up and share with them. Because she was born and raised in southern California, she know the stomping grounds of most of our California-based insureds and took great delight in chatting about those areas with them. She was a devoted employee who took great pride in giving our clients the best possible service she could. It was not unusual for her to stay late or take work home to make sure those last minute aircraft buyers could get the insurance they needed. Dianna was not all work though. She was well known around the Vancouver area as Mrs. Santa starting right after Thanksgiving. She and her husband John dressed up as Mr. and Mrs. Santa and entertained many homes and neighbors for years. She was also an avid water skier. She had learned to ski in her thirties with her teenagers and was proud of her high level of accomplishment. Later in her forties, she was called “the Water Skiing Grandma of Mayfield Lake”. She also enjoyed gardening. Her backyard had been turned into a beautiful haven of impatiens and begonias for which she was well known. Dianna is survived by her husband, John, six children and thirteen grandchildren. She was a beautiful and happy person who taught us all to enjoy the moment and always look for the good in everything and overlook the bad. She is very much missed.

On the insurance side, I believe we are at last seeing some stabilization of premiums. Increases have become much milder and less frequent. There is still some increase, however, with high limits and a few other scenarios, but in general I feel things are looking up. AIG Aviation, through which the WBS Group is underwritten, has just recently started offering an additional discount for AOPA membership. We will contact you at renewal to get your membership number to be sure that the discount is included in your new premium. This is in addition to the credits you already receive in the WBS Program. If you are currently insured by AIG and not in a program already, you should call us to become part of the WBS Insurance Program and enjoy those benefits. If you’re not with AIG, call us also and let us offer you a quote. Remember that you do not have to call AOPA to receive a quote with the AOPA discount. They are an agency just like the rest of us, but AIG is offering the AOPA discount to all agencies. Even though the WBS Group Program is with AIG, some of you do not realize that we do shop the entire market for your renewal quotes. Usually, the Group premium has come in the best, but just to make sure, we receive quotes from all the companies available. Make note that if you mail in cards or answer inquiries from other agencies or from AOPA to get quotes for you, you will lock us out of the marketplace when we try to get other quotes for you at time of your renewal. Please feel free to call me if you have any questions about this. It’s a rather confusing situation. We’re happy to say that AIG for one, has stopped locking up the market. We hope the other companies will follow suit.

[back to the top]


April 2003

Across the nation, there are reports of reserve deficits. One of the main reasons for this is, of course, our poor economic condition which is reflected in our returns as well as those of the insurance companies. As you recall a few years ago, when the reverse was true, our rates were great. This situation coupled with higher loss ratios means that increases are still on the horizon for a while. Without excess capacity, any unexpected catastrophe will do away with any or all profits. The last couple of years has not only offered higher rates but much more restricted conditions. The higher limits are much harder to obtain if not altogether impossible at times. We can argue that the risk of an accident is lessened by a pilot with good experience. However, because his aircraft has had no losses in the past does not mean that the good luck will necessarily continue into the future. That is what insurance is about. Some of our worst and most unfortunate claims have involved the finest of pilots. If we all knew ahead of time and planned in advance not to have accidents, we wouldn’t need insurance. It seems that losses are up across the board in all fields. In addition, the insurance industry is now faced with types of claims that were unheard of just a few years ago. The losses of Enron and World Com have made Errors and Omissions and Directors & Officers coverages nearly uninsurable. We also now have the threat of cyber-terrorism as well as the old fashioned terrorism that we have come to live with the last two years. Because these are new types of risks for the insurance industry, there is really no way for them at the present to know how to rate these risks without a history to work from. Whatever happens at the higher levels trickles down to the everyday policies. Narrowing in on the aviation industry, the claims have not subsided any in the middle of all this. In the last two to three years, we have seen more than the average number of claims. Many of these are just plain old “fender benders”. As you know, the cost of repair now days is no small change. This is unfortunate when things are not going well in the insurance industry right now. What exactly is the cause of these accidents? We have heard comments from some of our A & P’s that improper maintenance is often the underlying problem. With dollars being as tight as they are now, we may have a tendency to try to get by doing without some items at annual time. This is not a hobby where one can afford to do this and get away with it. We have heard horror stories of what happens when short cuts are taken at any level of maintenance in the aviation industry. Rates will continue to be high until the economy improves and our claims diminish. The market has gone up and down before so we must not give up hope of lowers rate at some point in the future. In the meantime, do everything you can to keep your bird in the best possible safe condition and keep yourself tuned up as well! We’ve been wondering what effects the war may have on General Aviation. I called Washington, DC, but as you can imagine, it was difficult to get through to anyone there. If any of you with some clout have any insight as to how our flying might be impacted, please let me know.

[back to the top]


General News

We have recently heard some news relating to the Mexican liability insurance which has been required for quite some time. As most of you know, if you want to go into Mexico, you have to purchase a separate liability policy from the Mexican government even though Mexico is already part of the covered territory of nearly all policies. Originally, the Mexican authorities required an original certificate, but in recent days they have become more lenient and have been accepting fax copies. Much to our surprise, however, is the news that some folks have landed in Mexico without this certificate at all and have been OK'd by just showing that Mexico is part of the territorial limits of their policy. We have checked with all of our major markets and none has any knowledge of this new practice. We definitely would not recommend that anyone do this until this new procedure is in total agreement with all Mexican and US companies. So far it is just speculation. Those who have done it and not experienced any difficulties may have just been lucky. This is not an area where you want to take chances. It's better to be double safe than sorry. Until this is totally clarified, again, we stress that you continue to obtain Mexican certificates as you have done in the past. These can be purchased by the day, month, or year. Yearly policies run $70.00 to $100.00 depending on the insurance company.
Since we are talking about territory, this brings us to another point. Please be sure to review the territorial limits of your policy. As rates have been increasing, everyone is eager to drop their current carrier and go with another offering even just a slightly lower quote. However, before you make that change, review that other policy to make sure it will meet your requirements, of which the territory might be one. One of our insured's discovered he had no coverage in Central America only after he had landed in Beliz and officials at the airport advised him of the fact. Apparently, he thought he was covered all over the world. We had to cancel and rewrite with another company that would include his trip. Following are the territorial limits of some of the major insurance companies. If yours is not listed, please review your policy.

AIG: "Political boundaries of the US of America, Mexico, Central America, Canada, the Islands of the West Indies (X Cuba) and while enroute between places therein."

Global Aerospace: "Within the US of America, Canada, Mexico or the Bahama Islands or while en route between points therein."

U.S. Specialty Insurance Company: "While the aircraft is within the United States (X Alaska and Hawaii), Canada, Mexico, or while en route between these points."

Please note that these insurance companies will also take into consideration the type of aircraft being insured. Obviously, the larger aircraft such as jets will be written with larger territorial areas. Also note that some do not cover the Bahamas even though the islands are in close proximity to the US and some do not include Alaska. These areas can usually be added by endorsement with or without a charge.

[back to the top]

 

[ about us | aircraft quote | boat quote | contact us | our history | photo gallery | american yankee association]

[ beech aero club | world beechcraft society | news | home ]

© Aircraft and Marine Assurance Inc.
All Rights Reserved - 2004

developed & hosted at
Manwaring Web Solutions