Hi, I understand insurance, like a car. My question is whether a person can self insure? As a low time pilot without all the endorsements like yourself, I imagine buying a plane can be expensive. Even if you have no lose you don't get your premium like a car, or if there are loses in the insurer's portfolio, your premium could be affected as well. I have not found anyone talking about self insuring.
Self insuring is an extremely bad idea. My insurance is $550 a year that covers hundreds of thousands of dollars of damage. If you are trying to save $550 but opening yourself up to hundreds of thousands, if not millions in damages, you should not buy an airplane. My insurance comes out to about 7% of the annual operating cost of my plane. Insurance is a cheap part of flying.
@@danielolivermcelroy8320 Yes, agree with you 100% about not buying a plane. However, you have a lot of experience and or hours. So if a person who self insures crashes, you save because your carrier isnt gonna raise your premiums. If a person has the money, of course that is the key, and places $1 mil in an interest bearing account, even at 1% that's $10k. So without a total loss he/she recoups providing no loss. Plus, he/she is a safer pilot because of the exposures.
Remember - Your liability insurance is basically paying for an attorney to represent you and your insurance company for legally liable claim. Legal liability for injury or death to either a passenger or someone on the ground (or both) WILL run into the tens of thousands of dollars in legal fees from a lawsuit brought again you for your negligence that caused that injury or death to other people than you, the owner and named insured. Medical Payments, on the other hand is NOT part of liability - it is a stated amount (usually around 5,000 or 10,000) for injuries sustained by passengers without litigation. It's a type coverage called indemnity much like how the hull insurance and is paid without regard to your legal liability. Liability and Indemnity are completely different terms.
@@avflyguy Thank you for taking the time to respond. If the policy limits are $1 million/$100K, then the most any claimant can recover is $100k. If an working adult were to die in that plane, providing he/she did not die on impact, then there would be pain and suffering and further loss of income to consider. In that case, $100k would not cover the claim. The insurer would just offer the limits. Suits are file usually to preserve the statute of limitations. If the insurer plays hard ball because they evaluated the case was worth the limits or less, then a suit would be filed. If a jury verdict comes back exceeding the policy limits, who do you think would be responsible for the difference? I suppose the insured could consider bad faith against the insurer at that time.
@@aeb6868 In the 40+ years I was an aviation underwriter that out of thousands of claims I've seen I can't think of but just a few at most where a wrongful death lawsuit has actually gone to trial. Keep in mind that not only does the primary insured get sued, but the manufacturer, Lycoming or Continental, the last shop that worked on it, the airport and anybody else they can think of, so a sharp plaintiff attorney will sue a number of entities. Dying on impact has nothing to do with the severity of the claim or the amount of money paid out. And, if the limits are say limited at $100,000 per passenger, there isn''t much incentive for an attorney to sue and drag it out for years. Sued or not, $100,000 is all the money in the bucket. Now you may be thinking about what if they sue for say a million dollars, the insurance company tenders it's limits and it's possible but not likely a suit could go for an excess judgement wherein the insured could potentially be tagged for the other $900,000, but again, that is VERY rare that happens. So-called bad faith allegations generally only incur when the insuring company does not offer full limits, or stalls and fails to act by either tendering limits or chooses to defend under a reservation of rights. That too is rare. When a policy holder carries say 1 Mil CSL, then that's a completely different scenario as there is no limit under passenger, so the stakes get higher. And watch out for some policies that are limited to $100,000 per person, not just passengers. That too is a completely different scenario. You name it, I've seen it. 99.5% are all settled out of court.
Good job! Thanks.
Thanks for watching! -Dan
does insurance go up if youre CFI and using it to train students?
Yes. And you have to have your insurance "pre-approve" you and the plane for that use as it is a commercial use then. -Dan
Hi, I understand insurance, like a car. My question is whether a person can self insure? As a low time pilot without all the endorsements like yourself, I imagine buying a plane can be expensive. Even if you have no lose you don't get your premium like a car, or if there are loses in the insurer's portfolio, your premium could be affected as well. I have not found anyone talking about self insuring.
Self insuring is an extremely bad idea. My insurance is $550 a year that covers hundreds of thousands of dollars of damage. If you are trying to save $550 but opening yourself up to hundreds of thousands, if not millions in damages, you should not buy an airplane. My insurance comes out to about 7% of the annual operating cost of my plane. Insurance is a cheap part of flying.
@@danielolivermcelroy8320 Yes, agree with you 100% about not buying a plane. However, you have a lot of experience and or hours. So if a person who self insures crashes, you save because your carrier isnt gonna raise your premiums. If a person has the money, of course that is the key, and places $1 mil in an interest bearing account, even at 1% that's $10k. So without a total loss he/she recoups providing no loss. Plus, he/she is a safer pilot because of the exposures.
Remember - Your liability insurance is basically paying for an attorney to represent you and your insurance company for legally liable claim. Legal liability for injury or death to either a passenger or someone on the ground (or both) WILL run into the tens of thousands of dollars in legal fees from a lawsuit brought again you for your negligence that caused that injury or death to other people than you, the owner and named insured. Medical Payments, on the other hand is NOT part of liability - it is a stated amount (usually around 5,000 or 10,000) for injuries sustained by passengers without litigation. It's a type coverage called indemnity much like how the hull insurance and is paid without regard to your legal liability. Liability and Indemnity are completely different terms.
@@avflyguy Thank you for taking the time to respond. If the policy limits are $1 million/$100K, then the most any claimant can recover is $100k. If an working adult were to die in that plane, providing he/she did not die on impact, then there would be pain and suffering and further loss of income to consider. In that case, $100k would not cover the claim. The insurer would just offer the limits. Suits are file usually to preserve the statute of limitations. If the insurer plays hard ball because they evaluated the case was worth the limits or less, then a suit would be filed. If a jury verdict comes back exceeding the policy limits, who do you think would be responsible for the difference? I suppose the insured could consider bad faith against the insurer at that time.
@@aeb6868 In the 40+ years I was an aviation underwriter that out of thousands of claims I've seen I can't think of but just a few at most where a wrongful death lawsuit has actually gone to trial. Keep in mind that not only does the primary insured get sued, but the manufacturer, Lycoming or Continental, the last shop that worked on it, the airport and anybody else they can think of, so a sharp plaintiff attorney will sue a number of entities. Dying on impact has nothing to do with the severity of the claim or the amount of money paid out. And, if the limits are say limited at $100,000 per passenger, there isn''t much incentive for an attorney to sue and drag it out for years. Sued or not, $100,000 is all the money in the bucket. Now you may be thinking about what if they sue for say a million dollars, the insurance company tenders it's limits and it's possible but not likely a suit could go for an excess judgement wherein the insured could potentially be tagged for the other $900,000, but again, that is VERY rare that happens.
So-called bad faith allegations generally only incur when the insuring company does not offer full limits, or stalls and fails to act by either tendering limits or chooses to defend under a reservation of rights. That too is rare. When a policy holder carries say 1 Mil CSL, then that's a completely different scenario as there is no limit under passenger, so the stakes get higher. And watch out for some policies that are limited to $100,000 per person, not just passengers. That too is a completely different scenario.
You name it, I've seen it. 99.5% are all settled out of court.