Insurance

Its bad business for insurance companies to deny claims but occasionally they do it anyway.

If the party is all but over on Wall Street, the crowd may soon be thinning noticeably in the aviation insurance biz.

After more than a decade of competitive rates for aircraft owners, nearly everyone in the insurance business is talking about the latest hard market. What that means, simply, is that premiums are rising and you’ll have to jump through more hoops to get the coverage you want.

Why? Complex reasons, really, but a leading factor is that underwriters have been suffering significant losses and many havent seen much if any profits. Further, the big underwriters are consolidating into fewer yet bigger companies, something that doesnt bode we’ll for competition.

Its no…

American Eagle Insurance Co., the flagship of the American Eagle Group and the erstwhile official insurance company of the AOPA, slipped gurgling beneath the waves as it went into receivership late last year. The company had been under the conservatorship of the Texas state insurance department since the preceding July.

Most of its customers have found shelter elsewhere-either with other companies or through fronting arrangements with other underwriters. The large unanswered question, however, is whether Eagle will be able to pay claims relating to incurred-but-not-filed losses. We suspect that in this regard, some customers may come up short.

American Eagle and predecessor, A, had…

As much as we loathe using clichs, we can think of one that describes the current aircraft insurance market: There’s good news and bad news.

The good news is that more companies are vying for business in a relatively flat market and financial markets are flush with cash. That puts downward pressure on rates, which owners will find agreeable.

The bad news is that virtually all of those companies have abandoned the option of writing high-limit coverage. These days, $1 million smooth is the max liability youre likely to see. That may be a non-issue for private owners but for anyone operating an aircraft for business use, the coverage squeeze is on.

Market Reshaped
For o…

Its New Years eve 2000, the dawn of the great millennium and youve been tooling around the city sky line watching all the swell fireworks.

After you land back at homebase the taxiway lights suddenly flicker and go black, you get momentarily lost and chop up several light stanchions, hurling blue glass into the crisp night air. Damn, you mutter; Im in for an engine teardown.

So you call your insurance agent at home on New Years morning and report the bad news. No problem, he says, hell call you on Monday with claim information. Unfortunately, when Monday rolls around, the news gets worse. Youre not covered.

Turns out the taxiway lights were controlled by an airport computer th…

For those of us in the market for aircraft insurance, it is, as they say in the classics, the best of times and the worst of times.

Fueled by a robust economy, the markets are brimming with capital to underwrite everything flyable. And yet, many buyers and brokers are finding the coverage they want hard or impossible to come by.

One of the longest periods of post-war prosperity shows signs of continuing into the next millennium. As a result, pilots are buying their first airplanes in relatively large numbers and even more are moving up to bigger and faster models, often when they lack the experience to do so, at least in the insurers eyes.

General aviation manufacturers a…

Even if youre not one of those dotcom zillionaires, if you own a moderately expensive airplane, youve probably accumulated a nice tidy cache of wealth youd like to retain for your retirement years.

Owning an airplane, however, puts that wealth at risk. One of the biggest problems to face aircraft owners in recent years is the lack of higher limits of liability coverage beyond the run-of-the-mill million bucks, a sum thats chump change by modern insurance standards.

This is an expensive problem for pilots transitioning into bigger airplanes, but it plagues everyone who needs significant limits of liability, including people who have owned the same airplane for years.

Why It H…