By Stuart Hope for AssuredPartners
Let’s face it. On a purchase satisfaction scale of 1 – 10, aviation insurance fails to register even a 1 for most buyers. There is simply nothing sexy about buying a stack of papers that promises to pay for a future loss that statistically has a low probability of ever happening.
For this reason, many aircraft owners make the mistake of focusing a minimum amount of attention on this vital component of their financial protection system. Given the aviation risk will certainly rank as one of, if not THE largest financial exposure an aircraft owner faces, this can have devastating consequences.
One of the most crucial decisions you will make is the selection of the insurance broker.
- Should you allow your general lines insurance broker to handle the transaction? They are probably very good at taking care of your overall insurance needs but if you needed heart surgery, you would hire a heart surgeon, not a GP. Aviation insurance is no different. You need a professional aviation insurance broker on your side. Unlike other lines of property/casualty insurance, which are written on standard forms, aviation policies vary from company to company, some MUCH broader than others. This makes apples-to-apples comparisons extremely difficult. A good aviation insurance broker can help you navigate to the policy which best fits your operation. In addition, these brokers deal with underwriting companies every day on multiple aviation risks and have large books of business with each giving them more clout. An aviation broker will know the specializations of each underwriter at each insurance company, what a competitive rate should be, what coverages are available at no charge, and knowing when to negotiate ( and how hard) to secure a lower premium, broader policy wording, or ancillary coverages for their client.
- Don’t call several aviation insurance brokers to get competitive bids. While this tried-and-true strategy is effective with many other products, it’s normally counterproductive here. Why? Because the aviation insurance market is very small. Unlike auto insurance where there are over 500 insurance companies writing policies, only 12 aviation insurance companies do business in the United States. No one broker can represent all auto insurance companies. On the other hand, any good aviation insurance broker can and will represent all aviation insurance companies. As a rule, an insurance company will only work with one broker at a time and it’s strictly on a first come, first serve basis. Once a broker contacts an insurer on your behalf, any subsequent broker that contacts them will be blocked from accessing that insurer. If your aviation broker is doing their job, they will be shopping all interested aviation insurance companies for terms and will present you with the best proposals.
No one ever thinks it will be their plane that’s involved in an accident. Unfortunately, accidents can and do happen, even to the best flight departments. If you’ve hired AssuredPartners Aerospace as your insurance broker, you’re in good hands. Our team is trusted by more aircraft owners to handle their insurance than any other broker in the U.S. Contact us today to discuss your options.
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