I received an interesting email from my insurance agent; She said that one of the companies she was getting a quote from wanted me to justify the $200K value I wanted for the hull insurance. Looking at the prices of -10's these days I wonder about that request.
Does anyone have info on a -10 that sold recently for LESS than $200k?
-Marc
Having said that, I do know of one builder that carries liability only. His attitude is that he can repair the plane himself if it's necessary, and the $$$ saved on insurance would easily fund that.
-Marc
Not insuring the hull (liability-only coverage) is a strategy that has seen common usage for a very long time. For a pilot who has the resources to cover the cost of the hull this is a viable alternative.
My approach is a hybrid option. Ground-not-in-motion coverage protects the hull of my RV-6 in case the hangar is wiped out by a tornado (could easily happen in my location!) and provides full liability protection for a premium that is much less than full coverage. This gives me full liability coverage at all times but I don't pay for hull protection inflight. If a landing accident occurs I'll repair the plane at my expense. If I put the plane into a smoking crater....I won't have to worry about repairing the plane.....
Your agent can provide quotes for ground-not-in-motion and also ground-in-motion coverages.
Doesn't this also mean that if you auger in your significant other sees no money on the equity you have in the plane?
Definitely not dogging your decision, but it is a small part of my decision to have full coverage.
Yes, everyone one needs to decide what they are comfortable with. Whether your plane is financed or paid for may also factor into your thinking. So I'm not dogging your decision either.
That said, remember the opportunity cost you are incurring for every year you pay hull premiums that you or your heir will be highly unlikely to ever recover. For example, and just to make things simple:
1. Assume hull insurance costs an additional $1000 over GNIM + liability only (that what it was likely to be for me when I got a quote, and just for a 2-place RV).After 25 years that $1000/year would have grown to $108,000.
2. Assume you own/insure the plane for 25 years.
3. Assume you invest that $1000 every year in a simple S&P500 index fund (which, BTW, is the same direction Warren Buffet has given to his wife upon his death).
4. Assume you earn the average S&P 500 return of 10% each year.
Though not inflation adjusted, that $108K would partially offset some of the what your heirs lost in the worst case scenario of you augering it in. Much more likely, however, you give to you heirs a fully intact plane + the $108K. I'm guessing they'll prefer the latter.
Again, it's more complicated than this of course, and it's a very personal decision for everyone, but people often over-insure as much as they under-insure. If you can swing it, self-insuring for hull is a good middle ground.
Doesn't this also mean that if you auger in your significant other sees no money on the equity you have in the plane?
Whether you carry hull or not might influence your thinking during that emergency approach and landing -- just sayin'.....
Whether you carry hull or not might influence your thinking during that emergency approach and landing -- just sayin'.....
I lost a seaplane when it got swamped on a rough water lake that I probably shouldn’t have been on. I had liability only. When it came time to pop my life vest and get out I wasn’t thinking about financial loss. I was more concerned about saving my dumass!
Why such a huge hull coverage?r!
Why such a huge hull coverage?
Just received my new premium for the yr and I was shocked. On my RV4 that I have been flying for 10 yrs, no accidents and have owned numerous planes over the last 40 years my premium went from $1113 a yr to $1618 or a 45% increase.
That is full coverage, in motion and 2m liability.
No complaints on the old premium but that kind of increase is insane.
I'm in Canada and we have less options here to chose from but will start looking in the morning.
Tim