Strong Headwinds, But Not a Storm

The current insurance market reflects the times.

If you’re beginning to entertain the idea of purchasing your first airplane, you likely have dozens of aircraft reviews and buyers guides bookmarked in your browser. You’ve probably learned how important it is to match an airplane’s capabilities to the sort of flying you expect to do most often. And if your daydreaming has evolved into analysis, you might have already begun to narrow your choices down to a handful of potential candidates. 

It’s fascinating how our perspective mirrors our environment—the social circles we move in, the money we spend, the altitudes we fly, and the speeds we travel. By now, most pilots are accustomed to rising insurance rates. Single-digit premium increases are usually a welcome outcome to most owners today, but the same bumps would have been an outrage just five or six years ago. 

I wish I could report winds were changing direction in the aviation insurance environment. Regretfully, we’re not quite there yet. While rate action the past few years has moved the needle in the right direction, aviation insurers still struggle to generate enough profit to cover years of operating in the red. 

According to a report published last year by the actuarial firm, Milliman, between 2016 and 2020, the U.S. general aviation market lost $693 million. Even after rate increases and less flying during the pandemic, insurers still paid out $50 million more in claims than premiums earned in 2020. While preliminary 2021 results indicate an improvement with underwriting profit of $93 million, it only covers 14 percent of the underwriting loss over the preceding five years. Unless you are a shareholder in one of these companies, you might not care whether aviation insurers generate profit, but you should. Unfortunately, there are no government subsidized or non-profit aviation insurance programs, nor do I think there ever will be. If more insurers decide to pull out of aviation, we will be left with less competition and even higher rates. That’s reason enough to hope our insurers make money and are driven to compete for our business. 

Market Stabilization? 

Several confounding factors prevent more market stabilization. We’ve all seen the effects of inflation and supply chain delays on goods and services, and aviation is not immune. Costs to repair aircraft are substantially higher than they were a few years ago, especially newer airframes with composite materials and advanced avionics. 

Another factor affecting insurance cost is the rising verdicts awarded to plaintiffs in civil litigation cases, a trend coined “social inflation.” This has resulted in several cases where an individual received a single award exceeding $100 million. There are hypotheses for what is causing this, including a more punitive approach from a new generation of jurors, as well as more litigation funded by private equity groups incentivized to inflate damages. 

Plus, the recent Russia/Ukraine conflict brought uncertainty, the result of the potential loss of jets worth $10 billion stuck in Russia. This has not affected the U.S. general aviation market yet but it could have global ramifications on aviation insurance rates and availability—and the cost of war risk coverage. 

This might all sound like gloom and doom, but there are slivers of light. For one, rates are increasing at a lower percentage than we’ve seen for three years. Premiums have now risen high enough to potentially attract new insurers who don’t need to gain ground against prior unprofitable years and could apply competitive pressure to halt the upward climb. We can also celebrate an improved general aviation safety record in recent years that in theory should moderate premiums in the long term. 

With some market indications moving in a favorable direction, aircraft owners should consider additional steps they can take to promote their best insurance outcome, which will vary based on the type of aircraft flown. 


The piston market, particularly for light single-engine airplanes, has stabilized to a greater extent than other sectors, and we are beginning to see rates flatten. Older pilots will continue to have a tough time finding competitive options, as will low-time pilots in new aircraft with high hull values, retractable gear, tailwheels, or floats. Two simple things will do more than anything else to improve outcomes: obtaining an instrument rating and building total time. For example, a newly minted private pilot with 100 hours total time buying a brand new Cirrus SR22 at a $950,000 hull value will pay 2.5 to 3 times as much as the same pilot with 350 hours total time and an instrument rating. An instrument rating and higher total time may also make you eligible for a “smooth” liability limit that provides superior coverage to a policy with a per-passenger limitation. 

Time in make and model can also help you obtain the best rates, particularly for complex aircraft, multiengine, and pressurized, cabin-class pistons. 

Insurers may also provide modest discounts for formal model-specific or safety training, technologically advanced aircraft (two axis autopilot and IFR certified GPS), and hangar storage. 

Underwriters are very sensitive to loss history, and we often find clients with recent claims are unable to

obtain competitive quotes from anyone other than the incumbent insurer (who usually raises rates following the loss). In this environment, if you sustain a minor hull loss with no bodily injury or property damage liability, it’s prudent to strategize whether filing a claim makes sense. Often when we counsel clients on this, we determine they will be better off economically by filing a claim but prepare them to expect higher rates at renewal. This calculation and advice may change if it’s the second or third loss in a single policy year and small enough for the client to easily cover without financial strain. 

As hull values continue to increase on the high end with Cirrus SR22T and Diamond DA50 models approaching sticker prices of $1.2 million, there will be limited options for all but the most qualified pilots, because it’s difficult for an insurer to collect enough premium to cover hull losses, which at this level can be higher than the third-party liability limit. 


The turbine market falls into one of two broad categories: owner flown and professionally crewed. The line between these can be blurred, but if the owner is flying, even on a jet with dual crew and another professional on board, it generally falls into the higher rated “owner flown” bucket. The irony is that the same owner/pilot— if appropriately qualified—could be classified as a pro pilot if hired to fly someone else’s airplane. The logic for this delineation is that a professional pilot is in theory more apt to be solely focused on the flying task versus a non-pro with other priorities (e.g., thinking about a high stakes business meeting they are flying to). 

The turbine owner-flown category continues to be one of the most challenging sectors, which usually involves high hull values and liability limits coupled with single-pilot operations. During the soft market, competition lowered rates to a point where premium volume wasn’t enough to cover even attritional losses, such as bird strikes, FOD claims, and hangar rash, let alone more catastrophic claims. Loss ratios on owner-flown turbines deteriorated so much that some insurers ceased writing this business altogether, and those who still do drastically raised rates and tightened underwriting. We continue to see rates rise in this sector to a greater extent than professionally crewed turbine or light piston aircraft. 

Owner pilots can obtain the best outcomes by logging lots of time in make and model and completing annual simulator training religiously. Owners will often advocate for “in-aircraft” recurrent training, which is more convenient, arguably better quality, and more specific than a simulator that might not even have the same avionics platform. However, it is difficult for underwriters to vet quality against training offered by major simulator-training facilities that consistently meet a basic standard. There is flexibility with certain insurers, but for the lowest cost and most coverage options, annual simulator training is required. Formal training more frequently than annually will further set you apart as a best-in-class risk and may reduce rates, though the economics of that will never make sense to undergo for insurance reasons alone. 

Professionally flown turbine aircraft are seeing rate increases attenuate, particularly high-quality Part 91 operators, and there remains competition for that business. The favored “any pilot approved” pilot warranty that was commonplace in the good old days for these operators is now a rare prize. The biggest challenge today for many is finding pilot candidates who meet underwriters’ desired standards in a difficult job market. Having a highly experienced crew under 65 years old with exemplary flying records will set you apart more than anything. 

Homebuilt and Experimental 

For obvious reasons, the homebuilt and experimental categories have always been more difficult and expensive to insure with fewer underwriters willing to play here. In addition to suffering higher accident rates than production aircraft, most makes and models have few examples flying, so underwriters struggle to accumulate enough information to develop a comfort level. 

You will obtain the best outcome with a common and popular model that has a good reputation. The Van’s Aircraft RV series, for example, has established such a stellar reputation that well-qualified pilots usually only pay marginally more to insure their RVs than they would a factory-production aircraft. 

Though you will need to accept higher insurance rates for a less common model, particularly high performance, tailwheel, and/or biplane, it helps to provide details on build quality (i.e. experienced builder, factory assist), how the aircraft will be maintained, and model-specific training received from an appropriately qualified CFI (e.g., factory flight instructor). 


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