Tuesday, April 21, 2009
CSI Insurance: Excogitations On LSA Crashes, Part Deux
A discussion about LSA insurance rates
|Last month, Mike Adams, vice president of underwriting for Avemco Insurance (www.avemco.com), shared fascinating insights drawn from Avemco’s LSA claims data. Avemco’s conclusion: Incomplete dealer transition training for new S-LSA owners was the biggest contributor to accident claims. Avemco responded by requiring new owners to complete five hours dual and a flight review sign-off from a dealer rep to qualify for solo coverage. |
Also, consider flight characteristics. Do you want snappy and light controls or a more stable, docile personality? High-wing stability and ground visibility? Low-wing sportiness and open-sky views?
What about the S-LSA company’s parts and service support? Where do you go for routine maintenance? Is there a repair facility reasonably close, in case of major damage? Are there nearby instructors for recurrency training?
Consider all those factors before you buy, because Avemco and other insurance carriers are looking at them too. Says Adams, “If it will cost us more to repair your airplane, we’ll have to charge you more for insurance.
“We also suggest pilots get thoroughly checked out in the aircraft before they even fly it. Know the systems cold: EFIS displays, GPS, autopilot, braking, ground handling control, start-up and shutdown, fuel selectors, emergency procedures and more.
“I advise pilots to stay current and humble about their abilities. In return, for every year you take recurrent flight training, we’ll give you a 5% base-rate discount. We want someone who’s laid low all winter to get an hour or two of crosswind training in spring, for example, before they start flying again.”
Avemco, like other insurance providers, also builds in discounts as pilots build no-incident hours.
What about a ballpark premium quote for both ends of the S-LSA spectrum?
“For an S-LSA with a $45,000 value, flown by a 50-hour sport pilot,” says Adams, “the basic rate would be about $2,600 annually for $1 million liability and hull coverage. With premium credits and training, we could get that down to $2,200. For a more experienced pilot with 500 hours of flight time, the range would be $2,000 to $1,750.
“On a top-line, loaded S-LSA with a $135,000 hull value, the 50-hour pilot might be covered for $3,900. With credits for recurrency training, etc., we’d cut that to $3,200. For the 500-hour pilot, coverage would be $3,000, and with credits and training, [could] go down to $2,200.”
Why wouldn’t a lower-cost S-LSA be proportionately less than a more expensive one? “There are many factors,” affirms Adams, “including cost of repairs and replacement parts when stacked against the total value. The higher the value, in theory anyway, the lower the percentage cost of the repairs.”
Another factor affecting premiums would be how well a company has developed its dealer support network across the country.
Many thanks to Mike Adams of Avemco for his forthcoming insights into the character of LSA flight as the industry enters its fifth year.
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