Tuesday, April 21, 2009
CSI Insurance: Excogitations On LSA Crashes, Part Deux
A discussion about LSA insurance rates
IS AN LSA RIGHT FOR YOU? When deciding which LSA to purchase, keep in mind the potentially high insurance and repair rates.
“Now, if you just bought one of those Cub clones, for example,” Adams explains, “have two hours dual in it, plus 15 hours and a taildragger endorsement in a Piper Cub, and you ask me to insure you, I’ll have one question: ‘Do you have a flight review sign-off in that Cub clone?’ If you answer, ‘No,’ I’ll say, ‘Okay, I will insure you today, but you must get that flight review before you can solo, or you won’t be covered.’
“Once we presented our findings to manufacturers, many understood the rationale behind more stringent training and now support the five hours dual/flight review model. They’d already been learning on their own how much harder it is to sell aircraft with high accident rates.
“Another contributing factor to accidents,” says Adams, “is the unconventional systems many S-LSA present to a pilot.” EFIS display panels with flight, power and navigation instruments all on one screen, dual throttles and console-mounted brake levers instead of toe brakes “aren’t bad; they’re just different. Thorough checkouts are crucial to addressing those differences.”
Another parameter adversely affecting insurance rates is the loss severity (i.e., repair costs). “We base our rates on severity as well as calculated expectation of frequency of losses.”
LSA present specific challenges to writing low premiums. Adams compares the LSA and GA aircraft market. “You can buy a decent J-3 Cub for under $35,000, and a Piper Super Cub for $70,000 or so. If you damage [either aircraft], there are still lots of new and used parts out there, and plenty of shops to work on them. That makes repair costs reasonable.
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