What is going on with insurance rates?

[GalinHdz]

I just got a renewal quote for my insurance that went up by $950.00/yr with everything the same from last year except I now have an additional 125hrs of flying experience. Being 64yrs old I was expecting a rate increase, but not this much! Needless to say I will be shopping around or go with liability only.

[plehrke]

I just got my quote from Leah at Gallagher and it is unchanged from last year. That makes this year and last year the lowest I have paid over the 14 years of flying my RV. The coverage is with Global Aerospace. I am 58.

[thompsonbr87]

About 15% increase for me this year, but I did increased my hull value by 17% after some avionics upgrades.

[BobTurner]

Originally Posted by Ironflight

I forget who it was (so on one gets the blame if it is wrong....), but an insurance insider once told me that insurance companies make their money off of investing the premiums. They don't collect premiums from all their customers, then stuff that money in a mattress, hoping they don't have to pay out more than they collected - they invest it in stocks and bonds and whatever other schemes people use to make money from other money.

So....take a look at what has been going on In the financial world, and the chaos in the insurance world might make more sense....

Or not.

Paul

The insurance companies hope to make money with your premiums. But just this week I heard an investment advisor give a very downbeat forecast. He said the US economy is in the toilet, just that the average person didn’t realize it yet. But the government was running an unacceptably high deficit before Covid; now, ...
The pain of layoffs hasn’t fully hit due to bailout money, but that cannot go on forever... Insurance companies are trying to adjust to a market where they cannot make anything on investment income, so their only option is to seek higher rates from customers.

[LettersFromFlyoverCountry]

Yes and no. That is how insurance works. The money is invested, same thing as a bank.

But...

The increase in ratings actually began last year during the booming stock market when insurance companies were -- like everyone else -- drowning in money. So these particular rates are not the result of the pandemic-fueled economic collapse.

The problem, as insurance people have described to me, is many insurance companies offering their product across any different lines, got clobbered with claims -- wildfires, droughts, hurricanes etc etc. Since then, the problem has gotten worse with companies themselves in worse economic shape for the reasons mentioned, at least on the balance books.

So they started offering fewer lines. They simply got out of the aviation market, leaving fewer companies left to write aviation policies. And we all know what happens when there's less competition.

I haven't been able to find out for sure -- companies are very secretive about claims -- but I get the sense that aviators are paying the price for a problem not of their own making. That aviation claims were not significantly higher, at least to the point necessitating the kind of increases we're seeing.


As I might have indicated earlier, there's a yin and yang to the insurance business and eventually more companies will add more lines again , and the usual economic theories will once again prevail.

Stinks for now, though.

[ExtraKatana]

Can someone give me their contact at Gallagher please? email?

[BobTurner]

Originally Posted by ExtraKatana

Can someone give me their contact at Gallagher please? email?

Leah_Ringeisen@ajg.com

Edit: that’s an ‘underscore’ line between her first and last names. Hard to see on my computer.

[GalinHdz]

UPDATE ON MY INSURANCE SITUATION.....

After contacting several different brokers I got two quotes which are actually slightly less than my original quote. So instead of a $950 increase, my insurance will go down by $100 with exactly the same coverage.

Kudos to Katie (Gallager Insurance) and Don (Falcon Insurance) for finding me appropriate coverage at a reasonble price. If your insurance increases a lot for no apparent reason, contact either of them. You have nothing to loose.

PS, this is my 2000th post since I joined the VAF back in 2010!

[Pilot135pd]

Originally Posted by GalinHdz

PS, this is my 2000th post since I joined the VAF back in 2010!

If you had an RV you would have cruised faster to that 2000 !

[GalinHdz]

Originally Posted by Pilot135pd

If you had an RV you would have cruised faster to that 2000 !

Well I consider this a marathon, not a sprint!