News

November 2011 | September 2011 | July 2011 | May 2011 | March 2011 | January 2011

November 2010 | September 2010 | May 2010 | March 2010 | January 2010

November 2009 | September 2009 | July 2009 | May 2009 | March 2009

January 2009 | November 2008 | September 2008 | July 2008 | May 2008 | March 2008 | January 2008

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November 2011 

Strange as it may seem, some of you out there are shopping for another, more complex aircraft. If and when you do, please call your current agent for a quote. At first, this probably appears to be the most logical step to take when you are considering the insurance costs. However, we have had a few ? not many ? of our clients who have become involved with the aircraft broker in obtaining their insurance quotes. When they have gotten all the information they need from the broker, they will then take a moment to call us for a quote. This presents problems for us as well as for all other agents in the same position. About half of the insurance companies will provide quotes to only one agent at a time. It used to be that all the companies followed this procedure. However, with the new online systems in place now, agents can easily obtain quotes without being locked out ? but again ? only from about half the companies. If you have obtained quotes from anyone other than your own agent, he will be locked out from several markets when he or she goes shopping for you. We have experienced some scenarios in the past where we were locked out because our client had already obtained quotes from someone else. We were able to get the quotes released to our agency with our client?s OK in written form to include his signature. This is a bit of hassle but not insurmountable. Not only that, but aircraft brokers are specialists in their field which is. . . the sale of aircraft. What we have to watch closely is and make sure of is the pilot and aircraft information that was released to the insurance company by the aircraft broker. They are wanting to make a sale and a good insurance quote will certainly help. They can increase your hours and ratings (if you ?just about? have them) in order to get better quotes. They do not deliberately do this ? they just round up a bit. One of our clients with a student rating (just about ready to get his private) had his aircraft broker lock up the market. When the quotes were released to us, they reflected a private rating. We assumed our client had just received his new rating. After discussions with him, we learned he would be getting the rating in a couple of days (weather permitting). We had to forward this revised information to all the companies who had quoted. Some rescinded their quotes. One of the companies was really upset that false information had been submitted in the first place and refused to ever write our client even after he obtained his private. (Not sure if they will remember this years from now.) A wise and prudent agent will never add to or change your information. If you are going to receive your private in a couple of days, this is what we want to forward to the insurance company. They can take this into consideration and act according to their guidelines. None of the underwriters likes to receive incorrect information which sometimes may appear to be misleading. They tend to get nervous and may opt not to quote at all. If they have all of your information up front, they can deal with your scenario and adjust for your circumstances ? i.e. adding extra dual or training requirements. Aircraft brokers are there to sell the aircraft not the insurance. A pilot does not intentionally ask for an insurance quote when he is shopping for an aircraft. The broker just offers to do the work to help out. Just remember. . . this part of the sale should be left to your agent. On an end of the year note - we would like to thank all of our clients for their business with our agency. We wish you all a wonderful and prosperous year filled with many blessings and safe trips. We have worked with many of you going on a couple of decades now. Our clients are like family ? we try to remember each one by name and are now working on remembering each one?s N#. Next will be effective dates. We?ll keep you posted on our progress! Happy New Year!

September 2011 

It?s been quite some time since we have written about life insurance for you folks so we thought it was time to briefly bring it up. Following are seven of many reasons why you should consider life insurance. The first is the quite obvious and most everyone is aware of it. Replacing income for dependents ? If your family depends on you for protection, life insurance can provide income for your family if you die. Final expense costs ? Life insurance will provide funds to pay for funeral expenses as well as for burial costs. Create an inheritance for your heirs ? A great way to leave a legacy when you die is purchasing life insurance. Even if you have no assets to pass to your heirs, you can create an inheritance with life insurance. Pay estate taxes ? Life insurance benefits can pay estate taxes, so your heirs do not have to foot the bill. Many times family members are forced to liquidate other assets to pay for the estate tax. Life insurance is a great way to protect your family?s assets. Create a source of savings ? There are many different types of life insurance, and some create a cash value or a savings that can be borrowed or withdrawn against at the owner?s request. It?s never easy to save money, but buying a policy that has a cash value creates an automatic savings. Performance evaluation ? If you currently have a life insurance policy, it is time to do a performance evaluation. There are many major events, such as a home purchase or children that occur since your first policy purchase. There are many term policies which can be converted to permanent insurance policies. Protect your business ? If you are a business owner, it is crucial to have life insurance. Nearly every business has key employees or partners who are invaluable to the success of the company. What would happen to your business if one of these key employees were to die? Key Man life insurance will protect it. It will reimburse the business for economic loss caused by the death of the key person. Please feel free to call or e-mail us at ins@aya.org. We will be happy to discuss your particular situation with you.

July 2011 

After many years of owning a Grumman, several of you are building an experimental, usually a Vans RV, or any one of the other popular home builts. While your plane is under construction, it is important to have coverage for all of your parts during the building stage as well as when you are ready for that first flight. Chartis Aerospace has been our leading insurance company for these type of aircraft. Their premiums are very competitive and in addition, their builder?s risk policy is one of the best. A great feature of the Chartis Builder?s Risk Policy is that you can insure it once for the year and not have to call in every time you receive more parts and materials to increase the insured value on the policy. You give us a starting amount and an ending value for your plane, and the premium will take into account an average of these two figures. All you have to do is keep a record of your expenses and receipts as well as the hours you put into your project. Should you have a claim, you will be reimbursed for whatever you have spent as well as for your time as long as this amount does not exceed the ending amount stated in your policy. When you are ready to fly off the hours, Chartis Aerospace will cover you during this period. If you will be flying off the hours and do not have time in the model aircraft you built, you can either get time in another plane of the same model or have someone else with the required time fly off your hours. Chartis has been flexible in its ability to take into consideration time in similar models if you do not have time in the same model you have built. Just run this information by your agent, and he can discuss it with Chartis and probably get approval to get the fly off hours ironed out for you. Some companies do not cover your labor and some do not cover the fly off period, so be careful when you are getting quotes to make sure both of these are covered. Keep in mind that these are yearly policies and need to be renewed at the end of the year. For those of you who have decided to sell your bird, Chartis Aerospace also offers a great renter?s/non- owned policy. This policy covers you for your liability as well as for the aircraft should anything happen. They have recently added enhanced coverages such as passenger personal effects ($1,000), medical expenses ($3,000) and emergency expenses ($10,000). Even though the FBO you are renting from probably has its own insurance policy (they should), their policy will defend them in case of a claim involving property damage or injuries. You should at least purchase liability insurance to protect yourself in case you get sued for any damages or injuries. Check with the FBO to see how much insurance they expect you to purchase on the plane itself when you rent. It might just be for their deductible or they may want you to cover the entire aircraft. Just be sure to at least protect yourself with liability coverage which you can obtain for a very reasonable premium. Lots of hot temperatures out there this summer?..Don?t forget density altitude. On an ending note, one of our companies has advised us that they have had a high incidence of runway departure accidents by low time pilots in AA-5 series. Be sure to review these procedures with your CFI and you might also want to discuss this on the Grumman Gang.

May 2011 

We just received a call this morning from a very nervous client who had received a notice that his policy was being cancelled. At first he thought it was for non payment and was confused because he had paid his premium. After further investigation, he learned that the reason was because the insurance company had not received a signed application. Some of you may think that you just have to fill out one application when you first purchase insurance, and that will be it. Unfortunately, you will have to be troubled a little bit every few years by filling out a new application every once in a while. According to insurance laws, and depending on the insurance company, a new signed application is required every two or three years. This is true even if you do not move your policy to a new company. An insurance policy is a contract between the insurance company and yourself, and the application reflecting your information and confirmed by your signature is what binds you both to that contract. Please do not confuse this insurance application with the Pilot History Form which we mail out to you about three months prior to your renewal. This in-house form we use is to obtain your most current information which will enable us to obtain the best possible premiums for you, but it is not a binding contract with any of the insurance companies. When we mail you an application, we do try to complete it as much as possible ahead of time for you with any information you may already have given us in order to save you time and trouble. If the BFR or MED dates are left out, please be sure to insert them. This is very important information for the insurance company. If we do not get this application back, the insurance company will be sending out those unwelcomed notices to you. So if your agent is requesting this form from you, please be sure to get it right back to him/ her without delay. Since I just mentioned the Pilot History Form which is our form to obtain your current information, we cannot emphasize enough how important it is to return these forms as well. We do include a stamped self-addressed envelope for you. If you wish, you can save the stamp for something else and e-mail or fax in the information. Many of you are insured with Global Aerospace. These folks have been offering zero deductibles and $10,000 medical coverage at no extra premium if we know your EAA # which many of you have. This is the type of information we like to get back from you, and which can be reflected in your renewal quotes. Please also take a moment when you receive these forms to update your log books. Every now and then, we see a decrease reported in logged hours ? meaning that someone has been estimating their time for a while. As you can guess, the underwriters like to see increased hours each year and frown upon the opposite. As the weather improves, many of you will be traveling. Please be sure to take a copy of your policy with you. You do not need to include all the pages ? just the first couple which are known as the Declarations Pages. They identify yourself, your aircraft, the dates of your policy and how much insurance you have purchased. In Canada, insurance is mandatory. You especially do not want to go to Mexico without proof of insurance. We would prefer that you also include the Mexican liability in addition to your current policy. It is a small price to pay for peace of mind and a more enjoyable vacation.

March 2011 

Declaring an emergency does not mean you will be in any kind of trouble with the FAA. The ATC?s have a very high rate of successfully assisting pilots who are caught in an unexpected dilemma. The ATC?s actually get awards each year for the most achievements in helping pilots out in these scenarios. One such incident was a pilot flying a King Air with his family who declared an emergency and requested assistance. The ATC was able to get everyone down safely. About 1/3 of incidents occurring in flights that started out in VFR conditions but turned into IMC involved pilots with instruments ratings whose skills were weak. After even seven weeks without recurrency, a pilot?s instrument skills lose their sharpness. Keep in mind, however, that recurrency is not a substitute for proficiency. Just because you are legal does not guarantee that you are safe. Just for the record, however, a VFR pilot will only last an average 178 seconds in IMC whereas an IFR pilot (even without recurrency) can last up to 400 seconds in the same predicament. Even though these claims are not as common as other types of claims, they are very, very serious when they do happen. Remember that ?stuff? happens. Understand your systems and keep flying the aircraft. Just because your door opens (other than Grummans) is no reason to stop flying the plane ? not to mention losing your prop ? just keep flying! Remember that one? The subconscious mind works ten times faster than your rational mind. Be in touch with your plane. You may have hunches that clue you in that something is wrong. Trust those instincts and your instruments. Make your flying hours ones that allow you to practice the skills you have learned. Many hours of flying on auto pilot all the time will not help much in keeping your skills sharp. If weather or other reasons keep you from flying in the plane itself, ?armchair? flying is very beneficial. Simulator time can be very helpful in keeping you proficient. It also allows you to push yourself into situations that you could not do in the aircraft itself and thereby making your skills even better. Many BFR?s do not include these drastic emergency scenarios which you can go through with the simulator. Memorize the critical steps you take and practice them over and over so that if you are ever in such a situation, it will happen automatically for you. Do not forget that sufficient sleep is also a requirement for good flying practices. Eight hours of lost sleep is equivalent to three drinks. You wouldn?t drink before going up to fly so don?t go without sleep either. One of the most common causes of accidents which were attributed to pilot error was fatigue which accounted for 76% of these incidents. For this reason especially, it is highly recommended that night flights should be IFR. Many countries already do not allow VFR flights at night. If you are not instrument rated and will be flying at night, it would be a good idea to ask for flight following?.while you start working on that instrument ticket!

January 2011 

Many of you have been building kit aircraft, especially the RV. Before the plane is actually put together, you will have quite a bit of investment in parts as well as labor. It is therefore appropriate and important to insure your project. Just because it is in parts does not diminish the value. Many years ago, pilots would insure these parts with ?ground only? policies. This type of a policy was OK, but it has its drawbacks. For one, you would have to keep increasing the value as you progressed with the project. This is not only troublesome for the builder of the aircraft, but the insurance companies are not crazy about endorsing policies every other week. What works best in this situation is a Builder?s Risk Policy. This policy contains an endorsement reflecting the beginning value (which would be the parts you initially receive) and the ending value (at completion). The ending value will not only reflect the parts, materials, avionics, etc. that you have purchased, but your labor which has definitely turned thousands of pieces into a beautiful masterpiece. You will not have to remember to call your agent every time you receive more parts for the plane. Just hang onto your receipts. Should anything happen to your project, you would just need to come up with proof (the receipts) showing how far along you were. The premium will reflect an amount that is between the beginning and ending values. Having a policy such as this one will at least remove the worry of having your project properly insured at all times. --- Now after your project is completed, you will be needing full flight. Make note that not all companies insure the ?fly-off? period. Some companies that are willing to insure the plane in the building stage do not want to see it again until all the hours have been flown off. Not to worry, there are other companies which have no problem with this. Chartis and the EAA Program through Global Aerospace are two fine examples. Do keep in mind however, that during the fly off period, the coverages will be somewhat decreased. The liability limits drop to $500,000 per occurrence rather than the customary $1,000,000, and there is no passenger coverage either. This is not a problem since you are not allowed to have any passengers during this period anyway. In addition, the deductibles are usually increased ? sometimes as much as 10% of the insured hull value. As soon as the hours are flown off, the liability limits are immediately increased to the full $1,000,000, and the deductibles are reduced to $100 with Chartis and zero with the EAA Program. If any of you are presently building another aircraft or just thinking about, please feel free to give us a call. We will be more than happy to offer you a variety of quotes reflecting the various levels of coverage during the building as well as after the completion.

November 2010 

The NTSB used to be divided over 10 regions, but has recently been consolidated into only four. These are the Western, Central, Eastern, and Alaska which stands alone. When an accident occurs, the FAA is usually notified first and then forwards the information to the NTSB. Within these ten regions of the NTSB, there are about 45 investigators who review only about 15% of the 1800 accidents which occur annually. These are usually fatalities and/or only certified aircraft. They will occasionally visit the site of other aircraft not meeting this criteria only because they are interested in the type of aircraft or some other contributing factor to the accident which they would like to further investigate. Usually the Sheriff is the first contact. The actual recovery can take from four hours to two days or longer. Reports are formulated and components may be sent to labs in DC or Virginia or the manufacturer for analysis.

Of these 1800 annual accidents, 70 were Air Carrier, 95 Air Taxi (Part 135 and helicopter EMS) 104 foreign, 43 Public Use and the rest private. This is actually an excellent report considering there were about 16,400,000 flight hours last year. There has been a huge increase in EMS accidents causing a number of special studies in this area to spring up. Public Use can include flights such as fire patrol and predator control. Some of these accidents can be very much out of the ordinary. One such incident took place in Montana with a couple of pilots in a Super Cub looking for coyotes. The pilot in the right seat was trying to manipulate his coffee thermos along with a shot gun and accidentally shot a hole in the fuel tank. Both were very badly injured. The recovery of the aircraft was also complicated.

The NTSB is independent of the DOT or FAA. It was formed in the 1960?s. The FAA focuses on enforcement investigations while the NTSB focuses on safety issues. While the NTSB has about 4500 employees as stated above, the FAA has roughly 7500.

In recent years, with the introduction of cell phone cameras as well as many folks carrying digital cameras around, videos and pictures routinely appear on the net in places such as U-Tube. Sometimes this information can be useful and sometimes not. The investigator must approach the scene with a clear mind even after viewing this preliminary information. The media often formulates a decision about an accident way in advance of the NTSB appearing at the scene. These videos are the most detrimental to the families who may not have been notified yet.

Of the total accidents annually, 73.3% were due to cockpit crew decisions, 10.5% to the aircraft, 3.4% to maintenance, 4.8% to weather, 4.2% to Air Traffic Control, and 3.8% to other miscellaneous causes. Fortunately, the number of ATP accidents is decreasing. Criminal accidents are not investigated much by the NTSB, but are turned over to law enforcement. These accidents are, however, put into the data base.
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September 2010 

With the dip in the economy, many of you are having a hard time keeping your aircraft in the air. For those of you who are CFI?s, you might want to consider giving some instruction. We have some excellent markets available for this type of coverage. For those who do not want a full instruction and rental policy, a simple pleasure and business policy will accommodate other pilots including students as well. There are, however, some parameters with the pleasure policy. With the Global policy, we can usually name up to five pilots. These pilots can contribute to the expenses of the aircraft as long as the owner does not make a profit. In this case, there is no limit as to how much the pilots can contribute. Besides Global, most of the companies will allow for some re-imbursement as long as the owner does not make a profit. One way to allow the pilots to contribute more if that were a concern, would be to form a corporation or LLC. Even though the economy is making it tough to fly, the cost is considerably reduced by having partners. Scheduling and sharing are, of course, a factor, but at least flying will not be out of the picture totally. For those of you who do not want to go the LLC route, Chartis Aviation (the old AIG) has an endorsement available for which rental reimbursement is allowed. This is about as close as one can come to a rental policy without having to pay the higher premiums. The endorsement will cover up to only two named pilots. The total annual premium is re-figured with the additional one or two pilots, and then 10% of that premium is charged for each pilot who will be renting the aircraft from the owner. Once again, this is a very low premium compared to what a full rental policy premium would be. This policy is not meant to allow for the owner to change pilots every couple of months, so the named pilots must stay on for some time. Rather than giving up your aircraft, please feel free to give us a call to discuss how we might be able to help you get through these difficult times. Some of you who have already sold your aircraft have been renting and inquired about renter?s policies. We do have this type of policy available. Some of you are renting from FBO?s while others are flying a friend?s aircraft. The non owner policy is excellent to have because it will protect and defend you for your negligence. Since it only covers you for your negligence, make sure that there is a base policy in force on the aircraft for anything that might happen that would not be caused by your negligence. Should there be a mid air engine failure not caused by you (unless you ran out of fuel for example), the non owner policy would not cover you. In this particular situation, your non owner policy would not come into play, and the owner of the aircraft would have to come up with coverage for damages and injuries. FBO?s should and usually always have their own policy. If you are flying a friend?s aircraft, be sure that they also have a policy in force and that you either are a named pilot on that policy or meet the open clause (other pilots allowed to fly the aircraft besides named pilots.). If you do not, and there were an accident, you would not be an authorized pilot and that policy as well would not come into play.
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May 2010 

It does not happen often, but we received a call the other day from a pilot who had his log books stolen from his vehicle. He always kept them in the aircraft, but wanted to take them home to review the maintenance entries and to make sure all requirements were complied with. On the way home, he stopped at a shopping center where someone broke into his car and took the case in which the books were kept. The loss of the aircraft history can depreciate the aircraft by about 15% of its value. Our client therefore requested to put in a claim for this loss. Unfortunately there was no coverage for this loss, and the claim was denied. According to his policy, the definition of an aircraft ?includes the engine, all avionics and operating equipment attached or temporarily detached and not replaced on the aircraft, tools and repair equipment specifically designed for this type aircraft?. Loss means ?direct and accidental loss of or damage to the aircraft. Excluded are depreciation, or any damage for loss of use?. From this definition of ?aircraft? and ?loss?, we see that the log books are not a part of the description of the aircraft, and in addition, depreciation from the loss of the books would also not be covered. More often, we have learned that our pilots have lost their flight log books. In the case of a claim, both sets of log books are at the top of the list of what the adjuster will be requesting for review. We cannot stress the importance of keeping copies of these books in a different location other than the aircraft or hangar. Many of you are familiar with the computer programs available now to keep track of all this information. If you do not wish to go this route, simple copies are well worth the effort they take to make. Should you have an incident or occurrence which could be considered a claim, please be sure to call your agent. Every now and then, we are informed of occurrences which we feel perhaps will not be covered by the policy. However, it is not our place to decide whether or not a claim should be made. When we are contacted by our clients, we always forward the information to the insurance company. An adjuster will contact our client, and the two can discuss the situation to determine if a claim should be made. Sometimes, an insured is afraid to make a claim in fear that his premium will increase at renewal. Depending on what kind of a claim (pilot error or weather or other), how much was paid out and which insurance company is involved, there may be no additional premium at all. Remember that if you decide to make a claim, more money will be paid out to repair your aircraft by the insurance company than you will have to pay in additional premium the following year. This is what insurance is for. If in doubt, call your agent and then speak with an adjuster. You can always rescind the claim if you choose to do so.
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March 2010 

Hopefully, most of you read your policies from cover to cover by now. These would probably be the few pilots who are not overworked, have relaxing schedules and are seeking something to do. Unfortunately, most of us have only gotten one quarter of the way through our policies. To help you out, when you receive your policies, we do include a cover sheet which includes some points to which you should pay special attention. For those of you who are not familiar with these items, following are some of the more important ones to keep in mind. Pilot Requirements ? Pay close attention to the clause that outlines who else is allowed to fly your aircraft besides yourself and the other pilots added by name. This is especially true if you have switched to a different insurance company. Though the requirements may be very similar from one company to another, they can differ. Be sure not to allow other pilots who do not meet these perameters to fly your aircraft as there will be no coverage in the case of a loss. Ferry Permits ? Whenever you have to obtain a ferry permit to move your aircraft, your plane is out of the Standard Airworthy Category. Unless your plane is experimental, your policy only covers aircraft that have a Standard Airworthy Certificate in force. Be sure to notify your agent immediately when you will be moving your aircraft on a ferry permit. Even though you may have completed all the requirements of the ferry permit, your insurance company still needs to be notified. Keep in mind that they do have the option of not approving the ferry flight. We have had such requests denied if the plane had been out of annual too long or if the flight was too long in distance. Student Pilots ? It is very difficult ? sometimes impossible ? to insure a student pilot with over 100 hours. It is strongly recommended that the student obtain his/her private ticket before renewal or before he/she has reaches the 100 hour mark. In addition, do not allow any type of student instruction in your aircraft unless the student has been named onto the policy even if he/she is accompanied by a CFI. There is greater risk when a student is manipulating the controls. There have been several accidents where the CFI was unable to bring the aircraft back on course after the student had gotten it into a dangerous configuration. Policy Territory ? All policies included the US, Canada, and Mexico. Some other companies include The Bahamas and parts of the West Indies. Purchasing the Mexican Liability policy has been debatable during the last few years. For a while, it was OK with the Mexican government to fly to Mexico without the Mexican Liability Policy if the word ?Mexico? appeared in the territory definition of your policy. However, for the last couple of years, many pilots have stated they were happy that they had purchased the coverage. Everything seems to run much smoother when you have a policy in Spanish in hand. We highly recommend it. It is not very expensive. Most companies offer it for around $100 per year. Use of Aircraft - Remember that no charge may be made for the use of your aircraft. Some companies allow for reimbursement of only fuel and oil while others allow for reimbursement of other items as long as you do not make a profit. Most of you have Pleasure and Business use policies. Business means ?personal? business where no charge is made like flying yourself to a meeting for work. Following are some other uses which are excluded in nearly all policies even if no charge is made: Skydiving or skydiving related activities / powerline, pipeline or highline patrol / aerial photography or cinematography (requiring an FAA Certificate of Waiver and with some companies even if no waiver is required) / any form of hunting, spotting, or herding / taxiing or taking off on water while the aircraft is equipped with floats and taxiing or taking off on snow or ice while the aircraft is equipped with skis. Remember ? whenever in doubt, call your agent.
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January 2010 

During this past year we have unfortunately seen folks dropping more coverages than they did in 2008. This is just a reflection of the economic times we are in. As we all know, aircraft values have been decreasing. The upside of this is that the premiums decrease as well. Everyone is trying to hold onto dollars, and a lower premium is always appreciated. Remember, however, that all of our policies are ?stated value? policies. Whatever amount you see on the declarations page of your policy is what you will receive should your plane be totaled. This stated value is not only of importance if your aircraft is totaled; it also becomes the basis of a formula for determining what will happen in the case of repairs. When repair costs reach substantial levels, the insured value is multiplied by whatever percentage each insurance company has designated for totaling an aircraft. Let?s say the percentage is 65%. The lower your insured hull value, the quicker your plane will be totaled and taken from you. So if you don?t want to lose your plane over some repairs, keep the value up there. Don?t overlook your avionics. If your plane is totaled, the avionics go with the plane to the insurance company. An example is a hail claim. The severe hail claims very often end up being totals as it would cost more to reskin than totaling the aircraft. It?s happened more than once that we had to work diligently with the insurance company to try to keep our client?s aircraft from being totaled. Another thought to keep in mind is that if and when you lower the hull value, it might become difficult to increase it later on. The insurance company might question the value of your plane. Another way folks are trying to cut costs, is by purchasing ground only coverage rather than full flight. A few years ago, we had a rather high time pilot wanting to save a few bucks so he decided to drop his hull coverage. Unfortunately, he had a bad landing and totaled his aircraft (not a Grumman). To make matters worse, the aircraft was his retirement. If you?re going to fly, try your best to adequately insure your plane. Your aircraft is an investment and should be protected. The insurance industry has reflected a soft market now for some time. As you probably have noticed, premiums have not increased in a while, and in some cases have decreased a bit. Global and Chartis (formerly AIG) had done some rate restructuring and reduced some premiums at renewal. The payout for disasters has been low since 2005 which has also helped the rates. Even though times are tough right now, the premiums are in good shape.

We are now in winter flying conditions. We have recently lost four pilots in our area. The fact remains that these folks had a family, and they lost their lives doing what they loved. We should be aware of the weather dilemma that can bring you down in a moment such as fog and ice. We should be very alert and aware about the trips that we plan during the wintertime. I know you?re supposed to fly so many hours every month to keep the engine warm. However, if you kill yourself in the process, it doesn?t matter. While on the subject of winter flying, if any of you have other aircraft that you like to equip with skis ? don?t do this until you check with your insurance companies. Several companies will not insure aircraft while on skis.
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November 2009 

For those of you who like to rent other aircraft, most policies include coverage for non-owned aircraft provided the aircraft is in the same category as the one you own. The parameters for the non owned aircraft can include horsepower, seating capacity, and hull values to name a few. However, none of the policies includes non owned coverage for multi or rotor wing aircraft. AIG (now Chartis Aerospace) has begun to offer a totally separate non owned policy for these two categories. These risks have to be submitted on an individual basis and reviewed by an underwriter. The policies for the multi and rotor aircraft will specifically identify the models in which you will be covered. In other words, you will not be covered in ?any? multi or rotor aircraft you choose. Obtaining coverage for non owned multi?s and rotor aircraft has been difficult to do in the past. For those wanting to transition and obtain these ratings, this has been complicated if and when the flight schools were requiring non owned policies from their renters. Thankfully, we are able to offer you this coverage now.

While on the subject of flight schools, sometimes the schools wish to be named as additional insureds to include ?waivers of subrogation?. The various insurance companies address this issue differently. AIG will add the school as additional insured at no cost, but will add 10% of the hull premium for a waiver of subrogation. Global will do both at no charge provided the school you are using is on their approved list. If the school is not on the list, that?s it. Other companies review the requests on an individual basis. Actually, the flight schools should really include in their own policies coverage for non owned aircraft so that they can instruct in ?other peoples? aircraft?. The companies we use for our clients do try to be accommodating and help whenever possible.

Some of you have been adding ?LSA? aircraft to your inventory. The popularity of these aircraft is increasing since they came out a few years ago. At first the insurance companies were quoting rather conservatively until they found out more about them and wanting to have a few years of loss records to review before make strong commitments. All has been going well so far. In fact, we have more companies coming forward with better and better rates on these new aircraft. Most companies offer credit for all ratings that a pilot may have. For instance, if an older pilot is giving up his medical and moving to the light sport category, he still will be rated with all the experience and ratings he has accumulated as opposed to a brand new LSA pilot who will fall into a different rating schedule. However, be forewarned, that the LSA rates are not like the Grumman rates you are used to. For one thing, the value of a brand new Light Sport is up there which increases the premium. And secondly - the LSA category of aircraft is still not established as are the models like the Grummans. In time, theses rates should come down even more.

Our staff at Aircraft & Marine would like to take this opportunity to thank all of you who over the years have stood by us in good and bad times. We wish you all a Merry Christmas, Happy Hanukkah, Happy Holidays and a joyous and profitable New Year. We will endeavor to continue to support our little Grummans in the coming years.
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September 2009 

Several months ago, we had a rather interesting scenario which might be food for thought. A client whom we had insured for many years was very unfortunately fatally injured while a passenger in his friend’s experimental aircraft. Actually both he and his pilot friend were lost in the accident. We did not insure the experimental aircraft. Apparently, our client, though not the PIC of that flight, had filed a VFR flight plan. He was in the habit of always filing plans, IFR or not. His friend had not seen a need to file a plan since this was going to be a VFR flight. However, our client, always in the habit of doing so, insisted on the filing and did so. During the VFR flight, the weather changed to IFR conditions. Our client’s buddy was not instrument rated. Our client was neither authorized nor qualified to be PIC of the experimental aircraft. However, since he did have an instrument rating, he did what he could to assist his buddy in flying the aircraft in worsening weather conditions. Sadly they did not make it. Although unfortunate, this claim was pretty much uneventful and nothing more came of it for over a year. After several months, we received a call from the widow of our insured advising us that she was being sued by the estate of her late husband’s flying buddy. According to the NTSB, since our client had filed the flight plan, they determined that he was responsible for that flight even though, as stated above, he was not qualified to fly the aircraft. The estate wanted to recover under the clause in our pilot’s policy extending coverage to non owned aircraft. The problem with this is our client’s policy did not include coverage for experimental aircraft. One lesson to be learned from all of this – there are probably several – is that the PIC should file the flight plan. The NTSB placed the entire burden of responsibility on our client even though there were several factors indicating otherwise. This story brings up other matters of interest. If a passenger is a non pilot, he is nothing more than a passenger. However, when a passenger is a pilot, a higher degree of involvement may be required from him at some point during a flight. What if the PIC becomes unable to fly the aircraft? Will the pilot/passenger be able to take over the controls? (Many years ago, one of our clients had a heart attack and died during an IFR flight. His son who only had 100 hours had to take over the controls. With the help of a Delta airline pilot who had picked up his signal for help, the son was able to safely land the aircraft which also had his mother onboard.) If possible, it is always best to be named on another’s policy if you will be flying together often. This incident is not meant to discourage anyone from filing flight plans. From the incident above, one can see that the PIC should do the filing. Of course, on a VFR flight, do not forget to close your plan as this can be costly.
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July 2009 

A couple of issue ago, we wrote about how the commercial insurance division of AIG was totally separating itself from the mortgage side of the company. As this process continues, the commercial division now has launched a new name – Chartis Insurance Company. This is another step in AIG’s Commercial Insurance Division on their path toward operating independently from the mortgage operations. This new name was developed with input from over 7,000 brokers, customers and employees. Chartis is the Greek word for map. The commercial insurance division will continue to provide worldwide coverage as they did under the AIG name and feels that their new name will help clients and brokers alike identify with the very large scope of coverages that this company is able to offer. Their new logo is a compass in the shape of the letter “C” for Chartis. Their brand line is “Your World, Insured”. Today Chartis serves 40 million clients in over 160 countries and jurisdictions. You can visit the new website at www.chartisinsurance.com to find out more about Chartis and the products and services that they have created for you. On behalf of 34,000 Chartis employees, John Doyle, the President and Chief Executive Officer of Chartis, wishes to extend appreciation to all the insureds and brokers who have supported and been loyal during this transition period. Some of you may have seen or heard of articles about AIG’s transition, some of which were recently published in the New York Times . The unfounded reports in these articles relied on sources without detailed knowledge of the structure and without having accurate financial data. State regulators who have examined AIG’s (now Chartis’) books have confirmed that the commercial companies are well capitalized and can very well meet the obligations of policyholders at strong capital levels. Following is some important information emphasizing the strength of AIG Commercial Insurance for 2008 and the new Chartis Company in 2009.

• Generated worldwide combined operating income in 2008 of $3.3 billion and in 2008 had gross premiums of $50 billion worldwide.
• In 2008 had $32 billion statutory surplus for the year.
• In 2008 cash flow from operations was $5.7 billion.
• In 2008 paid an average of $71 million worldwide in claims every single day.
• First quarter in 2009 had an operating income before realized gains and losses of $816 million.
• The property casualty companies have no debt.
  
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May 2009 

Letting someone else fly your aircraft is a very personal issue. For many, this will never happen. On the other hand, some of you are OK with this and have either named others on your policy or loan your plane on occasion to pilots who meet the “Open Pilot Clause”. For those of you who do allow others to fly your plane, remember that if another pilot has a reportable claim against your policy, it will be on your history record for up to three to five years depending on which company you are with. Even if you decide to drop that pilot, you will have to report that claim for a few renewals even after he is out of the picture. Also to be considered, if you wish to add a pilot who has had a claim in the last three to five years, he may increase your premium more than if he had a clear record. Over the years, we have had several such claims. This type of scenario is not meant to detour anyone from adding pilots to their policy, but it is certainly something to keep in the back of your mind. If you do allow others to fly your aircraft, it should be your responsibility to make sure your pilots are current on their medicals and biennial flight reviews as these will be the first things an adjuster will be reviewing if a claim is made. If you allow others who are not named pilots but meet the “Open” clause to fly your plane, do you check their log books to make sure they meet the parameters of that clause? Quite often, pilots think they have so many number of hours, but when they actually go back and check their log books, they do not have as many as they had estimated. If they are flying under the “Open” clause, and there is an accident, and if the pilot does not meet the parameters of the clause, you will be at the mercy of the insurance company. If you are insured with Global, for example, that clause requires those pilots to have at least 300 total hours of which at least 25 are in your model Grumman. If you are insured with AIG, their clause is actually very broad. All they need is a private rating and your permission. If you are insured with Britt Paulk, that clause not only stipulates that they have at least 300 total hours and at least 10 in your model Grumman, but they also need a CFI check out within the prior twelve months. Each company is different so be sure to check your policy. Also – the two place and four place Grumman hours are not interchangeable for make and model time. In other words, hours in a two place Grumman do not count as time in a four place Grumman and visa versa. If you have changed companies at renewal, do not assume the new clause will be like the one in your last policy. If in doubt, please call your agent. I know we have mentioned this before, but in the last week, we have received calls from a couple of clients who are not sure if they should be adding a student now or if they should wait until the student is ready to solo. NOW is the time. Students need to be named at all times. Having a CFI in the aircraft does not override the fact that a student is manipulating the controls. If a student has an accident and has not been named onto the policy, even if there is a CFI in the aircraft, there may be no coverage.
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March 2009 

As the AIG saga continues, we also continue to receive calls from our clients with great concern about their policies written through AIG. Until now, we have been advising our clients that the “good” side of AIG which we use for insurance property and casualty policies continues to be very strong and healthy. We now have even better news. We are pleased to announce that the “good” side (the commercial insurance operations) is totally isolating itself from the holding and parent company which has created the financial dilemma that has attracted attention around the world. The commercial insurance division is under restructuring plans and announced that it intends to form a General Insurance holding company to be called AIU Holdings, Inc. (American International Underwriters Holdings, Inc.). with its own board of directors and management team. It will take several months to get through all the legal maze involved. Before this is all completed, we may even be seeing another name change to something totally different to accentuate the break with the parent company. This move will protect the commercial insurance operations and ensure the strong financial stability and performance which has been realized by both clients and brokers alike. The new organization will have excellent financial strength and substantial liquidity with $43 billion in equity. Surplus has grown 50% from December 31, 2005 to December 31, 2008. The restructuring will create a stronger and sounder company attracting investor, client, and broker confidence.

The commercial insurance division (AIU Holdings, Inc.) employs folks all over the world and offers over 500 products and services including our own aviation insurance. It serves over forty million commercial and individuals customers. It will be a stand-alone entity the size of a Fortune 500 company. The new company will be headed mostly by the same folks who have been instrumental in the success of AIG’s worldwide property-casualty operations. Even though AIU is wanting to distance itself from the current and troublesome AIG operations, it remains mindful and connected to a great history of decades of worldwide underwriting.

All of our clients are familiar with the strict guidelines and hoops that AIG, as well as other companies such as Global and US Specialty to name just a couple, make our pilots jump through when they want something. Just remember that when a pilot wants to purchase a plane he is unfamiliar with and has no time in, the hours of dual he is required to take is only because the insurance company is doing the right thing to safely guard their reserves for legitimate claims, one of which may be your own. If they didn’t realize it before, the world is in agreement now that being on the conservative side doesn’t hurt anything. In our many years of business (over 34), we have watched as companies have gone by the wayside (not the A rated companies we use). These companies have offered rates which were ridiculously low. We have even lost a client here and there (not very many however) over the years to these companies. We can assure you that 100% of the time, these folks come back in a panic (often before their policies expire with those companies) because something has gone wrong. Remember that when something sounds too good to be true, it’s better to stay clear and not take the easy route.
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January 2009 

Our article this month touches on what we spoke about in the last issue. However, we have discovered that some of you do not totally understand how your policy reads regarding value of your aircraft. Unlike auto policies, your aviation policy is a “stated” value policy. This means that should your aircraft be totaled, you would receive the amount “stated” in your policy, not a replacement value. With the recent decline in aircraft values lately, some of you have called to lower the insured values of your aircraft thinking you would receive replacement cost if your plane were destroyed. This is not the case. When insured hull values are lowered, there is not a substantial savings in premium anyway. Just to save about $100 in premium, one might lose $7000 to $8000 if something happened to his aircraft. Another point to keep in mind, is that if the plane is only damaged and not destroyed, the insurance companies have a formula to enable them to figure out at what point an aircraft should be totaled when it has incurred damage. If it makes more money sense for the insurance company to offer the insured the stated value of his aircraft and then turn around and sell the salvage, they will do so. With repair costs rising as they have, the insurance companies are totaling aircraft more often now than they were in the past. The higher the value of the aircraft, the harder it will be for the insurance company to total it in the case of moderate damages. On the other hand, when the value of the aircraft has been lowered, any minor damages can easily total it. We have had a couple of losses lately, both involving older tailwheel aircraft that are hard to replace, where the cost to repair will mean a loss to the insurance company. We have had to work on both claims to get the insurance companies to repair rather than total the aircraft. We are not always 100% successful at this. Sometimes we can come to a compromise where both our client and the insurance company have to give up some dollars. We would recommend leaving the values of your policies as they are as much as possible. Hopefully the economy will make a turn for the better some time in the foreseeable future, and the values of our aircraft will bounce back up as they have in the past. We have discussed this in the past, but many seem to forget about this when times are tuff. When and if you upgrade your avionics to perhaps a Garmin 430 or 530, be sure to contact us so that we can increase the hull value to reflect the values of the radios. Remember that if your plane is totaled, the radios go with aircraft and belong to the insurance company. When the economy is bad, manufacturers and avionics shops and engine manufacturers find themselves in a financial dilemma like most of us. This is a good time to upgrade or replace your engine if you’ve been thinking about it. An example is Air Power. They are currently offering zero down and factory engine financing.
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November 2008  

How are loss ratios these days? One would think that with more emphasis on safety including better training, better maintenance, etc. that the percentage of pilot error accidents would decrease. The ratio remains at 85% of accidents being attributed to pilot error. Since the number of hours flown is decreasing, this means that the number of accidents per hour is increasing. Pilot error can be corrected. We just have to figure out what causes pilot error. Safety programs focus on making better pilots – which is a good thing. However, pilots are not necessarily bad pilots. Just remember – practice makes perfect! In our litigated society, every one is being held more accountable for everything. This includes pilots. For those of you who fly other non owned aircraft, if your policy does not cover you for flying other aircraft, it is advisable to purchase a non owned aircraft policy. If you do not want to purchase both non owned liability and hull, you should consider at least purchasing liability to cover your defense costs. So now we have determined that the accidents per hour have increased. To compound this situation, the cost to repair has also increased dramatically. The older aircraft were so well built that when well maintained, they have many, many years still ahead of them. As of late however, the values of some of these older aircraft have been diminishing. When we compare the cost of repair for an aircraft to its actual value, it is easy to figure out why more and more aircraft are being categorized “total losses”. This not only represents a loss for the insured since he would much prefer to keep his aircraft and have it repaired, but for the insurance company as well whenever they cannot recoup their expenses by the sale of the salvage. For this reason, you should note to never underinsure your aircraft. We’ve written about this before and will do so again at a later date. As manufacturers come and go, support in the form of parts and service go along the wayside as well. This also contributes to the fact that it is getting more difficult to repair older aircraft. In addition, there are fewer mechanics knowledgeable of older aircraft. Fortunately, our Grumman organization has been able to turn this common scenario around. Another factor impacting rates on the liability side is the higher number of law suits. Liability limits have remained at the same levels for the majority of pilots for quite some time now. These are $1,000,000 per occurrence with passengers limited to $100,000. With increasing medical costs for injuries and repair costs also for property damage (damage to other property caused by your aircraft) these limits can get used up quickly. The insurance company faces additional costs in liability claims because the costs to defend you are not taken out of the limits stated in your policy. Any and all costs to defend you are paid by your company above and beyond what they may have to pay to other parties for actual injuries or property damage. Even claims that have no pay out to others incur defense costs on your behalf. With the support of our outstanding membership, including service support and parts availability, the Grumman aircraft does not face the dilemma that some of the other aircraft do. These are factors which contribute to the premium ratings for the various types of aircraft. Some of the older aircraft have been experiencing higher rates because it is so hard to repair them. On the other hand, our Grummans have actually been receiving favorable rates for several years now. Thank you! Folks.
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September 2008  

As September comes to a close, all Americans have been affected in some way by our precarious economic situation. When the news about AIG was released mid-month, our phones were ringing off the hook from many of our clients insured with that company. When the nation became advised that there would be a bail out, everyone regained their breath. However, by the time this article is published, there is no telling what will have transpired from the time it was written. We would like to clarify a couple of points which should serve to soothe everyone’s stress levels. First of all, AIG’s insurance companies are financially sound. The problems we have been reading about are with the parent company, not the subsidiaries, of which AIG Aviation is a part. The funds of the subsidiary companies are more than adequate to easily pay all valid present and projected claims. Be assured that your policies are not in jeopardy. There is no need for anyone to switch to another company. Doing so would more than likely incur cancellation fees and a higher premium elsewhere. If you and your agent have chosen AIG as your insurer, it is because this company offered the best premium and coverages for your particular circumstance. Secondly, all the companies for which we write business are mandated to contribute to guarantee funds in all the states in which they are admitted. These guarantee funds would become accessible to the insurance commissioners should these companies become insolvent in their state. If it was not common knowledge before, it is now apparent to all Americans that there has been very little regulation at various levels of our financial institutions. We would like to make it clear that our insurance industry is very much regulated. When you pay your premium to our agency, as well as to any other agency, it goes into a special trust fund that cannot be touched until we pay your policy premium to the insurance company. Insurance agents are licensed and require many hours of continuing education in order to renew their licenses. Insurance agents partner with the insurance companies to underwrite risks in such a manner so as not to endanger the funds that will be needed to pay claims for those needing this service and restitution. This is why a new private pilot cannot obtain insurance in a Cessna 421 no matter how much money he has. Neither AIG nor any of the other insurance companies wants to tell you they don’t have any funds left for your claim because they just used up their reserves for the new privates renting Citations. This is why we ask so many questions and request forms and signatures that seem like such a nuisance at the time. The next time you are transitioning to a complex aircraft, and the underwriters are requiring a few more hours of dual than what you’d like, remember that they are protecting their reserves – maybe for you. If we did not follow through with these requirements, we would not be able to state as we did above that all the companies for which we write are financially sound. Lastly, if after you have reviewed all the information as it becomes available, you want to switch companies, please call your agent to do so. Normally, the insurance companies do not want to write a risk mid-term and will not offer quotes until your renewal is approaching. However, because of current circumstances, these requests to change to another carrier could be accommodated.
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July 2008  

A few months ago, we spoke about the “Open Pilot Warranty” clause and how it applied to CFI’s. Some pilots still believe that the CFI does not have to meet the requirements of this clause. If you are required to receive dual time prior to solo, then your CFI becomes PIC. It is therefore important that he meet the requirements of the “Open” Clause or be named. Some aircraft, usually experimental, have “NONE” or “NAMED PILOT ONLY” Stated in the Open Clause. If you are required to have dual time or any other time in which your CFI would become PIC ( i.e. BFR has lapsed), your CFI will need to be named as a named pilot in such a policy. This situation came up for one of our clients on an experimental aircraft policy that did not allow for anyone except named pilots to fly the aircraft. Our insured was transitioning to his insured aircraft and needed some dual hours. He thought that any CFI he chose would be covered by his policy, and that he did not even have to name that CFI. Just remember that in a situation such as this one, the CFI is PIC and will therefore have to be named since the policy reads: Named Pilots Only. CFI’s are like any other pilot. Any time they become PIC, they must either be named or meet the Open clause. One last thought on the CFI’s. If you are having trouble finding a CFI who meets the Open Clause, call your agent with the name of the best CFI you can find and request that he be approved and added to your policy. It is better for your CFI to be short on total hours than on make and model hours. Insurance companies like to see a CFI who is familiar with your make and model. It is extremely hard to add a CFI with zero time in your aircraft. - Have your received a request for a new application lately from your insurance company? If you have, please be sure to return as soon as you can. Insurance is a contract between yourself and the insurance company. AIG needs a new signed application every three years. US Specialty needs one ever two years for example. Applications are not to be confused with Pilot Update Forms which you all receive from your agents. The update forms are used by the agent to obtain renewal quotes for you. Once the coverage has been bound, you will have to then complete an application if it has been two or three years since the last one, or if you have switched to a new company, you will definitely have to fill one out then. If you fail to do so, your policy may be cancelled by the insurance company, or they may decline to renew your policy at renewal. The signed application confirms to the insurance company that the information you gave your agent is correct. Things change over time which is why the insurance companies stress obtaining new information (including your signature attesting to these changes) every few years. - This is hurricane time again. Please check your policies to see if you have any extra provisions for moving your aircraft out of harm’s way. Some of the companies are offering up to $500 to move the aircraft away from danger. For some companies, it has to be at least 75 miles away. For other companies, there is no minimum distance. If your policy does provide this extra coverage, take advantage and keep your plane safe.
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May 2008  

Every now and then, we are asked to add an FBO/Flight School as an additional insured with a waiver of subrogation to a policy.   Most of the companies are willing to do this for the larger and more well known schools.  However, if a school is not on their list, none of these companies seems willing to stray from their list to make an exception.  This only becomes an issue for a pilot if the CFI works for an FBO but is instructing in your aircraft.  The FBO’s have insurance for their own planes, but very few, if any at all, have coverage for their students’ personal aircraft.  Adding a school as additional insured to your policy is a way of shifting responsibility from the FBO’s policy to yours.  The insurance companies  are familiar with the larger training facilities and have reviewed their syllabi.  As a favor, they are willing to add these facilities as additional insureds.  By also including a waiver of subrogation to the additional insured clause means that in the case of an accident, the insurance companies cannot make a claim against the FBO’s or training facilities.  This is a risk they are willing to take with the approved training facilities because the insurance companies have already reviewed these training facilities and feel rather safe with them.  We recently had an insured who wanted to add a small school in his area to his policy.  Since the school was not on any of the insurance companies’ approved list of training facilities, we could not add them to the policy.  As you can imagine, the insurance companies cannot go out and inspect each facility.  Remember that the larger ones they are willing to add, they only do  as a favor.  No where does it state that insurance companies are required to add anyone or any facility as an additional insured to any policy.  Actually, one of our companies charges $150.00 per additional insured (if approved).   If your CFI is free lance, he might want to be added to your policy thinking this will offer him defense if there is a claim.  However, keep in mind, that naming him as a named pilot will not automatically exonerate him if there is a claim.  We have had a couple of claims where the insurance company paid our clients for damage to the aircraft but then went after the CFI’s.  In one case, they had run out of gas (this definitely was the CFI’s fault) and in the second case the CFI had used very poor judgment in landing a Grumman.  All CFI’s should purchase non owned insurance to cover their instruction.  This is similar to Errors and Omissions insurance or Malpractice insurance.  Before signing up with a CFI, please be sure to check your “Open Pilot Clause” to see if your CFI meets these qualifications.  The Open Pilot Clause  refers to “other” pilots who may operate your aircraft as PIC.  The requirements for the CFI’s are usually the same as those for the Open Clause.  Global Aerospace is the only company that does not follow suit.  Their requirement for Grumman CFI’s is that they have 5 hours in the same make and model.  They have no total time requirements.  The only times your CFI would not need to meet the Open Clause is if you are receiving your BFR, and it has not expired, or you are receiving some recurrency training.  If you are a student, getting IFR instruction, or transitioning to a more complex aircraft, your CFI will be PIC.  Please make sure to review this clause.  For the Grumman aircraft, it will read something like Private, 300 total hours and 25 in the same make and model.  AIG is the only company with an open clause for the Grumman and other similar aircraft which reads:  “Private or better with your permission”.  This means there are no particular total hours or make and model hours that other pilots must meet to fly your aircraft as PIC.  Do take note that the Open Pilot Clause is for “occasional” use only.  Any pilots who fly your aircraft all the time need to be named so that the premium can be based on all pilots who use the aircraft on a regular basis.
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March 2008  

We often receive inquiries from our clients about flying with a buddy if their medical has expired. The first thing to do is make sure your buddy meets the requirements and parameters of the Open Pilot Clause Warranty. This is the clause in your policy which refers to the other pilots besides yourself who can fly the aircraft. For Grumman aircraft, these parameters are usually something like a private rating with a minimum of 300 total hours and 10 in the make and model or 300 total hours and 25 in the make and model. If you are insured with AIG, the open clause only requires a private rating and your permission. Please note that make and model does not mean any single engine fixed gear aircraft. It means Grumman (or American or American General) and the model of your aircraft such as AA-1 or AA-5. If you own an AA-5B, someone with AA-1 time but no AA-5 time would not meet the open clause (unless you are insured with AIG which again allows for anyone private or better to fly your aircraft). This is true for all other aircraft as well. Make is Grumman, Cessna, Beech, etc. and model is AA-1, AA-5 for the Grummans, 172, 182, 177 etc. for the Cessnas and for the Beeches 23, 24R, 35, 36A, etc. If you loan your aircraft to someone else, please check all these parameters listed in your policy. If an accident occurs, these hours will the first on the list of what the adjuster will be looking for to verify coverage. With that done, make sure your buddy agrees to be named PIC for the flight. If there is an accident, and your buddy tells the adjuster he was not PIC, there will be no coverage on your policy. If you are flying with a CFI, he will automatically be PIC if you are out of medical or BFR. CFI’s normally check on these things, but make sure they are fully aware of what’s going on. With most policies, the CFI needs to meet the parameters of the Open Clause. Again with AIG, private or better is good. Global Aerospace does have a special provision for the CFI’s which is that they only need to have at least five hours in the make and model (MM). There is no requirement for their total hours. If you are out of medical and wish to renew your policy, it would be advisable to find a pilot who is current to name on your policy as the PIC in your place. Some companies will not issue a policy without a current pilot even though it is assumed you will not fly unless you obtain your medical and BFR first. If you become out of medical or BFR during the policy period, you will need to find someone else to fly with if you don’t want your bird to sit. On the flip side of this, sometimes one client would like to let someone fly with him to build time. This becomes a bit tricky. Our client tells us that he will be PIC at all times, but then his buddy can’t log the time if that’s the case. If the other pilot wants to log the time, we will have to name him as a pilot even though our insured will also be in the aircraft with him. There may or may not be a charge for this depending on the other fellow’s hours. In case of an accident, the adjuster would check out the other pilot’s log book, and if he had been logging time and building up hours, there would be no coverage unless he had been named to the policy.
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January 2008  

Are all policies exactly the same? There are only about four to five companies which are competitive for the Grumman aircraft. There are about half a dozen more which we agents use for the more complex aircraft. All policies are written in two parts – one for the liability which covers damage to other property and injury to others, either people on the ground or passengers. The second part of your policy covers the hull of your aircraft if you choose to purchase this option of the policy. All of the companies which we represent are rated A+ or better. Most of the policies are written very much in the same way. Sometimes the wording is also very much the same. As pilots become more familiar with how the insurance works, they are expecting their agents to procure quotes from several companies. If lower quotes are offered from different companies, you may find yourselves with a new company every now and then. If this happens, please be sure to read your new policy. (This is something you should be doing anyway.) Do not assume that all policies are exactly alike. Even though the differences are not many, there is one area that is very critical. This is the list of exclusions. Please be sure that you refresh your mind regarding the exclusions every time you receive your new policy. Each company has a different list. I would like to point out specifically that for those of you who work with the Civil Air Patrol and have an AIG policy, there is an exclusion for “search and rescue” operations. AIG has been working on an endorsement to add to their policy which will cover these operations. It will be out by the time you read this issue of the STAR. Depending on how many hours of CAP you perform, the rate to add this operation to an AIG policy will range from 10% to 25% of the existing premium. Global Aerospace and US Specialty Insurance Company do not carry any exclusions relating to this type of flying as long as you are not being compensated for your time. Reimbursement for fuel and oil is OK however. Now that we are in the middle of winter, some of you who own a second tailwheel aircraft, like to use skis for your winter flying. Not all of the companies are willing to cover the aircraft once the wheels come off. Global excludes skis and floats. U.S. Specialty is not crazy about them but will not exclude them. AIG used to write skis, but they have seen too many accidents out in the wilderness and have discontinued offering coverage for them. A second area of difference is the “Open Pilot Warranty”. If you are being moved from one company to another, again please re-check the “Open” clause before you loan your aircraft. Each company is slightly different. The most liberal is AIG which states that you may loan your Grumman (or other single engine/tricycle gear) aircraft to a private or better pilot who has your permission. Global requires at least 300 total hours and at least 25 in the same make and model. U.S. Specialty requires at least 300 total hours and at least 10 in the same make and model. These are small differences, but they can make a world of difference if you have a claim. If you are doing anything which you think might pose a concern with the insurance company, please call us to review the situation with you.
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