November 2007 Issue
LSA Insurance: Planes Yes, Pilots Maybe
The industry isn’t exactly taking the LSA groundswell in stride. Insurance is available, but underwriters will like you better if you keep your medical.
For aviation insurers, it’s the best of times and the worst of times. In many traditional parts of the aircraft insurance market, an overabundance of capital and new insurers is forcing premiums—especially those for corporate airplanes—down to new lows. At the same time, buyers are snapping up new airplanes of all sizes faster than manufacturers can build them. And the two new market areas of the decade, Very Light Jets and Light Sport Aircraft, are beginning to take off.In some ways, Light Sport Airplanes are an insurer’s dream. If the glass-half-full guys are even remotely right, there will be shoals of them. And from an underwriter’s viewpoint, they’re attractive because they have what insurers call "low severity." Severity is essentially the average cost of an accident.
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