As the aviation industry gears up for another year of flying fun, the community is abuzz. It’s not about the latest new aircraft model nor upcoming airshows. The hot topic is aviation insurance! Many an article has been written on the hardening of the aviation insurance market, and how the new rates and stricter requirements are the new normal. To avoid mirroring what previously well-written articles have stated, here are ten tips on how to handle this new aviation insurance market:
- Be Prepared – Whether it’s time for your insurance renewal or a new purchase, having all your ducks in a row will help your agent get on task more quickly. This means providing updated pilot history forms and any current applicable training certificates. For a commercial operation it may involve having previous and estimated yearly revenue for maintenance and fuel, or annual utilization of club or flight school aircraft.
- Start Early – For more complicated or larger insurance policies it is important to provide yourself plenty of time for renewal. Have your agent begin working on your renewal early. Underwriters may have questions on your policy and could take a lot of back and forth prior to receiving firm terms.
- Be Flexible – Change is difficult, especially when many pilots have been enjoying a soft market for over a decade. The aviation insurance market, like many businesses is cyclical. The rates and requirements we are experiencing now are comparable to the rates before 2008. While it can be challenging to accept these new terms, they ensure the aviation insurance market remains viable and pilots insurable.
- Consider your Aircraft Needs – Senior pilots have been greatly impacted in this hardening market, specifically those in retractable gear and multi engine aircraft. If a single engine piston fixed tri-gear aircraft can easily fit your aircraft needs, this will often result in a better rate and insurability on your aircraft insurance.
- Training – Consistent training has been proven to increase aviation safety. The recent increase of pilot training requirements on aircraft insurance policies should lower the loss ratio the carriers experience and may eventually assist in lowering rates again. Many carriers will not write pressurized and turbine aircraft if you do not have plans to do annual training. It is very helpful to provide a training certificate that shows the date and location training was completed.
- Instrument Ratings – No matter the aircraft you fly, one way to save money on your aircraft insurance is to earn your instrument rating. This is increasingly important for pilots transitioning into higher horsepower and retractable gear aircraft. The instrument rating will open more markets willing to quote your aviation risk and therefore offer more competitive rates.
- Work with a Pilot – Not all insurance policies are created equal. Aviation insurance is a whole different ball game compared to home and auto. Placing your business with an aviation insurance specialist and pilot that understands the industry will provide peace of mind that you are properly protected in this new market.
- All Markets – Working with an aviation insurance specialist who is appointed with all the major aviation insurance markets will help pilots obtain the best available options. While the claims ratio fuels the industry premiums, there is still competition amongst the carriers. Having an agent that can quote with all of them saves pilots both time and money.
- Be Loyal – If you are currently working with an aircraft insurance agent that you trust and has consistently provided quality service, think twice before shopping your policy with another agent as it could disrupt the market for you.
- Call Aviation Insurance Resources (AIR) – AIR is an aviation insurance broker for pilots by pilots. Each agent at AIR brings a unique aviation background to the table and is dedicated to guiding you through this new insurance market. AIR works with all the major aviation insurance carriers and will find you the best available coverage and rates.
It’s hard to predict this ever-cyclic aviation insurance market, the hardening may be temporary, and it could see another change in the next two to three years. Pilots and aviation businesses may have to weather the storm and sudden change, but Aviation Insurance Resources (AIR) will be with them each step of the way. To learn more about the hardening aviation insurance industry or how AIR can support you during this new cycle visit www.air-pros.com or call 301-682-6200 today!