by Jon Doolittle
Theres no point in sugar coating it. If youre an older pilot, dont be surprised if your insurance premiums double this year. Or worse. The older guys are really taking a shellacking, one insurance broker dolefully informed us. Its not a pretty picture.
But is the sky falling? As whats left of our black or brown hair turns silver, will coverage be impossible to find? Not quite, but theres no doubt the insurance market for older pilots is more difficult than when we last examined this topic three years ago.
As a demographic block, pilots continue to grow older, the only fact everyone seems to agree on. But only one insurance company claims to have data showing that older pilots may have a higher risk of accident; others seem to have raised older-pilot premiums as a me-too response.
Although we dont see the trend changing, youre not necessarily stuck with the unpleasant status quo if youre reaching your golden years. You need to convince a broker that your skills havent degraded and that you in fact represent a lower risk thanks to your experience and maturity.
Older is Slower?
The insurance companies we interviewed point out that with age comes inevitable degradation of skills, memory lapses and slowing of reflexes. But this doesnt happen equally to everyone. The insurance underwriter cant know about an older pilots condition, so he doesnt know the difference between the 80-year-old pilot who runs marathons and the 80-year-old pilot who cant remember where the airport is.
Insurance is largely a game of risk assessment defined by numbers. Yet there are few credible numbers to define the risk associated with older pilots. Bob Breiling of Robert J. Breiling & Associates, has been an interpreter of accident numbers in the world of corporate aviation for many years. He told us of a survey that he did based upon 335 corporate jet accidents between 1964 and 1990 in which pilot age was considered.
Pilots between the ages of 55 and 59 had the highest percentage of accidents in the study, with those between 35 and 39 having the next highest. The older-than-60 crowd had the fourth highest accident frequency among all the groups. Breiling concedes that the sample is small and the data is old, but he thinks older pilots have a wealth of experience, which translates into fewer accidents and thus they represent less risk to insurers.
Only one company we know of accurately tracks insurance and accident risk for older pilots: Avemco. Jim Lauerman, the companys chief underwriting officer, told us that his company tracks its own losses carefully and uses a rolling five-year period to smooth out the bumps. Lauerman believes that Avemco has a good feel for the number and cost of losses it will incur in each class of business that it writes, including classes separated by age groups.
Avemco limits liability coverage and it also stays away from owner-flown turbines. Because it doesnt have the same range of exposure as some of the other companies, Avemco can predict its costs more accurately than companies that insure everything from 152s to CJ2s.
USAIG and Phoenix Aviation Managers tell us that in addition to their own loss numbers, which varied from year to year, they also looked at other indicators for age-related risk, such as highway safety data.
The AOPA Air Safety Foundation has embarked upon a survey of older pilots, but its unclear what it will conclude. One of the difficulties of looking into aviation accident rates is that the all-important denominator of hours flown is not precisely known. Insurance claims records would be the best source of this data, but companies arent likely to open their claims files to scrutiny.
He Said, She Said
From underwriters, we heard anecdotes about older pilots, but we arent convinced that the companies really know with certainty that older pilots represent higher risk, with the exception of Avemco. When we asked underwriters if they felt that older pilots had a disproportionate number of accidents, almost to a man, they said they didnt know and, interestingly, that they didnt think so.
When we pointed out the obvious disconnect between that notion and higher premiums for older pilots, we heard some interesting answers. One underwriter asked if we would rather climb into an airplane with a 40- year-old pilot or an 80-year-old pilot. Another said that airplane insurance is just like car insurance: The very young and the very old pay more. Only two companies told us that their own claims data supported higher rates for older pilots.
But whats really happening out there? Just how bad is it? As usual, it depends on how old a pilot is, what kind of airplane he flies, what limit of liability he carries, whether he trains each year and what insurance company hes with.
There are exceptions to every rule, but heres the general picture.Beginning at 60, a pilots age will begin to be a factor. Even at this early age, some companies wont offer terms if the pilot isnt already a client.Pilots over 65 will find a limited number of companies willing to offer them quotes. Brokers that we spoke with told us almost unanimously that they kept their clients in this age bracket with the same company and that quite often, this was the only company that offered a quote.
Pilots who own heavy singles and twins run into age-related barriers before others. Conversely, pilots of lighter single-engine airplanes face lower penalties and they face them later. All the companies that we spoke to agreed on this point. Pilots of turboprops and jets might find that their insurer requires them to fly with a second pilot when they reach 70 years or older.
Pilots who carry higher limits of liability run into age-related insurance problems at a younger age, particularly those whose policies have smooth limits that dont contain lower limitations for bodily injury. Most companies will insist on a bodily injury maximum of $100,000 per passenger by the time a pilot has reached 70 and probably sooner if hes flying a twin or heavy single.
Another point company representatives stressed was currency and training.Just about every underwriter that we spoke with said they looked carefully to make sure that their older clients flew enough to remain current and that they received some sort of annual training. As pilots get older, many companies will require medicals more often than the FAA and some will require an annual flight review.
A large variable for older pilots is the insurer theyre with. In general, the brokers view was that while the companies have fairly workable guidelines, individual underwriters are being more conservative. Even experienced older pilots without claims history will often get only one renewal quote: their own companys.
A Florida broker told us, Look, when I renew a 71-year-old guy in a Bonanza, good pilot, instrument rating, no accidents, Im only going to get a quote from his current company. I dont care what theyre telling you. And if my guy gets a big increase from his company, its still probably the only quote were going to get.
Phoenix executive vice-president Roger Ridings says, Thats when you put your broker hat on and call us. Thats when you can explain to our underwriter why this is a good risk. Explain how the guy is going to train, how much he flies, his background in the airplane. Our underwriters have discretion, but you have to convince them that this is a good account.
And this squares with our experience. Underwriters dont get noticed for writing new accounts, but if that new account becomes a smoking hole in the ground, they will get to meet all sorts of important people in the company and explain why they thought that insuring this particular airplane and pilot was a good idea. Among brokers and underwriters, we didnt find that companies were abandoning their older customers. Brokers said that once clients got older, they tried to keep them with the same company for this reason.
What to Do
If you fall into that ever-expanding group of aging pilots, there are some steps that you can take to improve your odds of obtaining insurance.
Fly often. Underwriters trying to determine your vitality will look at your flying activity as a sign of your good health as well as your proficiency.
Train frequently. Put yourself through training thats appropriate to the airplane you fly and do it at least annually. Passing an IPC or flight review will be a signal to the underwriter that youre interested in safety.
Plan ahead. If youre in your 50s, think about the airplane you want to wind up in and start working toward it. The more experience you have in that or similar types, the better luck youll have getting insurance when youre in your mid-60s.
Get an advocate. Find a broker who will go to bat for you, because thats what it will take in many cases.
Be realistic. If the limit of liability coverage is paramount, so make sure that you stay with a company thats most likely to maintain your current limits. And dont plan on smooth limits forever; it wont happen. If you need to go 200 knots with six seats, you may have to pay a lot for not much liability coverage. If youre flying a turbine, you may have to consider flying with a co-pilot to get liability limits and premiums down.
As the pilot population continues to age, we think insurers will have to figure out better ways to provide them with service, just to have a market at all. Ultimately, this is the segment of the population that will have the best equipment and the experience that underwriters are looking for. Still, youll have to be proactive in reducing accident risk, something thats in everyones interest.
-Jon Doolittle owns Sutton James Insurance in Hartford, Connecticut. Hes an Aviation Consumer contributing editor.