The “winds of change” blowing through the aviation-insurance industry when I wrote about insurance for Flying in the 2019 Buyers’ Guide have now reached gale-force speeds. I worked in general-property and casualty insurance long before becoming an aviation-insurance specialist, and I have never seen anything like the rate volatility today.
Aviation Insurance in Hard Times
Key Takeaways:
- The aviation insurance market is experiencing significant rate increases and volatility (a "hard market"), largely because the limited number and diversity of aircraft prevent actuaries from applying the "law of large numbers," making pricing more subjective.
- Aircraft owners can improve their insurance outcomes by obtaining an instrument rating, maintaining high flight hours, regularly completing training (especially formal simulator-based for turbine aircraft), and accurately adjusting insured hull values.
- The article advises against frequently changing insurance brokers, notes that pilots over 65-70 years old face increasing challenges in obtaining new policies, and predicts that the COVID-19 pandemic will likely prolong or exacerbate the current difficult market conditions.
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