info from the insurance industry (SB)

The following is a post on the Matronics RV-List. I don't know how indicative it is of the way the insurance industry views experimental "service bulletins", but it is the first time I've seen an insurance rep address this topic since the latest bulletins from Vans.

A Mandatory Service Bulletin does not have to be complied with under an "experimental airworthiness certificate" and Part 91 operations. Insuance companies do not have requirements in their policies that state service bullitens to be complied with for you to have coverage.

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David McCoy
Branch Manager
Light Aircraft Division
NationAir Aviation Insurance
www.nationair.com

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As usual, we would be wise to have any concerns about our policy "in writing" before we make assumptions about how a claim would be handled.

Maybe...

Hi Sam,
My partner and I decided to do the mod just in case this scenario plays itself out. Do you think that the Ins. Co, could/would deny a claim if the mod has not been done and the airplane flips? Is it likely? Can they even insist on us doing the mod in order to have continued coverage?

Regards,

pierre smith said:

Hi Sam,
My partner and I decided to do the mod just in case this scenario plays itself out. Do you think that the Ins. Co, could/would deny a claim if the mod has not been done and the airplane flips? Is it likely? Can they even insist on us doing the mod in order to have continued coverage?

Regards,

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Pierre, I wish I had the answers to your questions! Even though I don't think we are going to find any requirements to comply with "service bulletins" in our present policies, who knows what may be coming when policies are renewed. Requiring compliance to bulletins would appear to be a quagmire for the insurance industry but.....who knows......

There is no ambiguity in the FARs about "mandatory" bulletins not applying to experimental aircraft. But the insurance industry pretty much plays by their own rules and can make policy amendments as their business environment changes. We may just have to wait until someone with a non-compliant plane is unfortunate enough to file a flip-over claim to find out the answers to your questions.

You are being prudent in getting ahead of the issue so hopefully you will never have your policy at risk.

Sam Buchanan said:

.....As usual, we would be wise to have any concerns about our policy "in writing" before we make assumptions about how a claim would be handled.....

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Which means read the policy.

If the policy says nothing about service bulletins, I doubt it could a reason for not paying a claim. Most policies do have something to say about annual inspections, pilot medicals, BFR's, and operating within the FAR envelope, ect., so these are reasons a claim could be denied. If the FAR's mandated compliance with SB's that would be another matter, but they don't.

insurance

Isn't that the reason we pay 2 to 3 times the rates of certified planes already, to cover the "expermental" part.

I understand the RV rates are based on experiance with the fleet, but expermental covers a broad range.

pierre smith said:

Hi Sam,
My partner and I decided to do the mod just in case this scenario plays itself out. Do you think that the Ins. Co, could/would deny a claim if the mod has not been done and the airplane flips? Is it likely? Can they even insist on us doing the mod in order to have continued coverage?

Regards,

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Pierre-

I have never seen an insurance company deny a claim because a modification or service bulletin had not been complied with on an aircraft. No it is not likely they would deny your claim if you flipped the aircraft and the mod was not complete. At this time the underwriter does not and probably never will insist on you doing the mod to continue coverage. Remember these are "experimental" and the carriers realize they are being built and maintained typically by the owners and are okay with that exposure.

The only part of this whole equation that could come into play in the event of a loss, would be if you had a landing and the gear leg failed structurally, not due to the clearance issue, but due to a loading issue, then the part that failed is excluded from coverage the rest of the damage is covered as long as you meet the basic policy requirements of being a named pilot, having an current med and BFR.

****As someone else mentioned - read your policy and you will see what items are not covered in a loss, it's pretty simple.

I talked with one of the main underwriters yesterday about this issue and it IS NOT even on their radar screen as a loss issue. Engine/power failures are, but not the design of a nose gear leg, so obviously this has had little or impact to the underwriters.

David McCoy
Branch Manager
Light Aircraft Branch
NationAir Aviation Insurance

There you have it..

Thanks David,
Great to hear it from the experts.

Kind regards,

Your Welcome

Your welcome. I will let you know if anything on the "dark side" develops further, but in general this is a non-issue with the insurance carriers.

Dave

NationAir said:

Your welcome. I will let you know if anything on the "dark side" develops further, but in general this is a non-issue with the insurance carriers.

Dave

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Dave, thanks for the update and I hope you didn't mind my reposting your message from the RV-List. Yours is the only response on this topic I've seen from someone in the insurance industry. Hopefully all in control of this matter in the insurance community will continue to approach the experimental market with reason and respect.

No problem

Sam -

I don't mind at all and actually appreciate it. It is sometimes hard to follow all of the different threads under the different forums and answer insurance questions. I try to do it as much as time permits, but sometimes I don't get he chance to respond. This helps get teh word out faster and hopefully can put some people's mind at ease.

Thanks for the help in distributing.

Dave