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Types of owned aircraft insurance we offer
Owner flown aircraft are typically single pilot aircraft such as:
Pleasure & Business
Pleasure & Business aircraft operations have a higher loss ratio than Industrial Aid (pro pilots) so underwriters take a very close look at all aspects of these operations. These exposures must be underwritten very carefully as the hull values can be several million dollars. Even new single engine or multiengine piston aircraft can be valued above $1,500,000. New multiengine turbine aircraft such as the Phenom 300, Cessna Citation CJ4, and Pilatus PC-24 can see values above $10,000,000.
Pilot Experience and Training
Piston aircraft typically don’t require any form of annual training from a flight school or in a simulator other than maintaining the required FAA requirements for a pilot’s license. Also there’s no minimum flight experience most underwriters require to operate a piston aircraft. You can be a Student Pilot with zero total time and start flying a Cessna with an Instructor. A high valued Cirrus or Diamond on the other hand may require 200 total time and a Private Pilot license.
Turbine aircraft on the other hand will almost always require 12 month or annual training in a simulator or an Aviation Manager approved flight school. Attached list of Approved Schools. It is recommended to have at least Private Pilot License and Instrument rating with 1,000 total time and similar make and model experience. The higher the value of the aircraft the most experience will be required.
Number of Named Pilots on the policy
Most owner flown aircraft operations have one or two pilots listed on the policy like a father-son, husband and wife, owner and friend, or owner and mentor pilot. When you start adding over three or four pilots on the policy it creates a lot of additional work for the broker and underwriters to manage. As a result there’s less underwriting interest and rates will be higher, sometimes much higher. Also there should be a lot of questions about if there is any dry leases and fractional owners involved. Check out our page on Dry Leases (in Commercial Aviation Insurance).
Age of Aircraft
The cool thing about aviation is, every year new aircraft are create and put into the marketplace, but the old aircraft aren’t deleted or deregistered. They’re still out there with value and flying around, provided they are maintained. So the overall value or market cap continues to grow. But older aircraft can have less underwriting interest because, well, they are old and usually lower in value. A good percentage of aviation insurance companies will not provide quotes or insure and aircraft that is older than 25 years due to increased loss ratio or claims and the difficulty or obtaining replacement parts in the event of a claim and repairs being made.
Loss Ratio for claims
You are only required to report losses or claims within the past 5 years. The loss ratio can be calculated by taking your past 5 years losses and dividing it by the earned premium over the past 5 years. So if you had one claim for $50,000 and have paid $100,000. The loss ratio is 50%.
Aircraft insurance policies are written as a “Agreed Value” basis, meaning the insurance company will reimburse the insured not for the Bluebook value like the auto industry, but the Agreed Value the insured and insurance company agree its value is. We recommend using a close approximation to bluebook plus 10% of additional expenses to acquire a replacement. The higher the hull value the closer underwriters will look to protect their investment. It’s normal to see a new Cirrus SR22’s value at $1,200,000. Or a Diamond DA62 at $1,700,000. Or a Pilatus PC-24 at $14,000,000.
Most aviation insurance companies will have a cap on the highest hull value they can insure 100% for single pilot operations. This applies whether is Pro Pilots or Owner Pilots. As of recently, this number is at a $6,000,000 hull value. Anything over $6,000,000 will have to be “Quota Share,” meaning one insurance companies leads with a 50% share and another insurance company follows with a 50% share for a total of 100%.
Some common aircraft to see Quota Share are: high hull value single pilot operated aircraft such as a Bell 429, Airbus H145, Honda Jet, Pilatus PC-24, Phenom 300, and Citation CJ4.