Does anyone carry only liability insurance? Is that even possible in aviation? My thoughts are, if I walked away from a crash I would be sufficiently satisfied I was alive. Sure it would suck to loose an aircraft, or have to pay out of pocket to fix it. But for me (brand new pilot) the savings would be about 1400 a year, risk over reward, is it worth it to keep cost down?
Van's Air Force
Don't miss anything! Register now for full access to the definitive RV support community.
Thoughts on carrying only liability insurance
- Thread starter travalab
- Start date
Kahuna
Moderatoring
Yes of course you can do liability only and many many do.
There are a large number of accidents both in motion, and not in motion, that result in damages and not death, in fact the majority are that a way. Did you see the mangled planes at SnF?
You are welcome to self insure your hull if you like. Totally a personal preference and one that we will have a difficult time helping you with as your risk assessment combined with your ability to absorb loss only you can answer.
Don
Well Known Member
I'll echo the concern about loss of an asset. I consider my RV to be an asset and have justified spending the money I have on it figuring I will likely (not positively) get most of it back when I sell the plane and possible all or a bit more than I put into it. It's hard to say with certainty if I'll win lose or draw when the time to sell comes, but I'm not counting on big gains or losses, either way. In some ways, its like most of my investments (particularly the past few years).<g>
The big difference here is, I can really enjoy my money more in an RV than in watching numbers in an investment account. So, looking at it as an asset, I wouldn't want to lose that 80,000 in any sort of accident. Insurance allows me to enjoy the "asset" and with some protection against loss (and insurance sure isn't a 100% guarantee either).
If I could walk away from an 80k loss without regret, I'd sure consider less insurance.
The big difference here is, I can really enjoy my money more in an RV than in watching numbers in an investment account. So, looking at it as an asset, I wouldn't want to lose that 80,000 in any sort of accident. Insurance allows me to enjoy the "asset" and with some protection against loss (and insurance sure isn't a 100% guarantee either).
If I could walk away from an 80k loss without regret, I'd sure consider less insurance.
N941WR
Legacy Member
You have a lot of options when it comes to aviation insurance. Heck, you don?t even need insurance, depending on where you are hangaring your plane.
There is liability insurance only.
The following typically includes liability but check your policy:
There is ?not in motion?, which covers you as long as you are not moving, including taxiing. This should cover things like the storm Kahuna mentioned.
There is ?no flight? or whatever they call it. That will cover you during taxi but ends when you start the takeoff roll and picks up again when you pull off the runway.
Then there is full coverage.
In my case, I have full coverage. If I wouldn?t have had some type of hull coverage, my plane would never be flying again after the prop strike I had because someone left a trailer in the middle of a taxiway, on the back side of a small hill. While I didn?t damage the airframe at all, everything firewall forward had to be replaced and that cost north of $40K.
There is liability insurance only.
The following typically includes liability but check your policy:
There is ?not in motion?, which covers you as long as you are not moving, including taxiing. This should cover things like the storm Kahuna mentioned.
There is ?no flight? or whatever they call it. That will cover you during taxi but ends when you start the takeoff roll and picks up again when you pull off the runway.
Then there is full coverage.
In my case, I have full coverage. If I wouldn?t have had some type of hull coverage, my plane would never be flying again after the prop strike I had because someone left a trailer in the middle of a taxiway, on the back side of a small hill. While I didn?t damage the airframe at all, everything firewall forward had to be replaced and that cost north of $40K.
L.Adamson
Well Known Member
Which, is now, why my plane is just a conversation piece....
Had liability only.... (prop & gear strike)
It makes a lot of sense to me to accept the risk
Insurance companies do not want to lose money either and they pay out claims accordingly. A couple of examples:
1 - I had an accident where a driver ran into the side of my truck causing damage to all of the panels on that side and fled the scene. The truck was in excellent shape but it was ~20 years old. The insurance company (... Farm) wanted to write it off and give me a check for it's value instead of paying to fix it. I cancelled the claim paid to have it fixed myself eliminated the related insurance and I'm still driving that wonderful truck 5 years later. If you think that the insurance is going to make you whole again after you get some age on your engine and plane I think you are mistaken.
2 - A friend of mine was a partner in an aerobatic Bonanza (N1KY). One of the partners flew it to Mexico and crashed it with a gear up landing I believe - it's been a while. The partners were given some money and the plane was sold for salvage by the insurance company and restored to flight by someone I'm told. My friend couldn't afford to buy the plane and have it restored and I doubt that he owned his share free and clear. He got his share of the payout I'm sure which he would not get without hull insurance. The question I think has to be are you willing to forego the possibility of some payout if you have an accident.
My hull is currently insurred for $60,000, I would be willing to fix it or walk away or sell it for salvage if I had an accident so I don't know why I keep paying the money except my entire bill is on the order of what you say is your hull insurance cost and I'm too lazy to address the problem head on.
Bob Axsom
Insurance companies do not want to lose money either and they pay out claims accordingly. A couple of examples:
1 - I had an accident where a driver ran into the side of my truck causing damage to all of the panels on that side and fled the scene. The truck was in excellent shape but it was ~20 years old. The insurance company (... Farm) wanted to write it off and give me a check for it's value instead of paying to fix it. I cancelled the claim paid to have it fixed myself eliminated the related insurance and I'm still driving that wonderful truck 5 years later. If you think that the insurance is going to make you whole again after you get some age on your engine and plane I think you are mistaken.
2 - A friend of mine was a partner in an aerobatic Bonanza (N1KY). One of the partners flew it to Mexico and crashed it with a gear up landing I believe - it's been a while. The partners were given some money and the plane was sold for salvage by the insurance company and restored to flight by someone I'm told. My friend couldn't afford to buy the plane and have it restored and I doubt that he owned his share free and clear. He got his share of the payout I'm sure which he would not get without hull insurance. The question I think has to be are you willing to forego the possibility of some payout if you have an accident.
My hull is currently insurred for $60,000, I would be willing to fix it or walk away or sell it for salvage if I had an accident so I don't know why I keep paying the money except my entire bill is on the order of what you say is your hull insurance cost and I'm too lazy to address the problem head on.
Bob Axsom
Mile High Relic
Well Known Member
The scenario above is why I dropped collision on my 95 Integra, because the auto insurance company decides the "value" when it is totalled. On my plane though, I decide the value. There is a difference.
In the last few years I'd guess I have paid about $5K in aviation insurance premiums and received about $30K back. Losses do occur. As with all insurance, it is all about your risk tolerance and how much you want to manage that risk. For me, it is a lot easier to discuss annual premiums with my wife than it would have been to explain the 30K loss. Talk about risk!
Sam Buchanan
been here awhile
Bob, hull coverage on aviation policies is based on "agreed value", not market value. This is a big difference from the scenario you described.
It is important to have hull value in the same neighborhood as market value, however. If hull value is too low, you won't get what the plane is worth if totaled. If hull value is agreed upon at too high a number, a damaged plane may get repaired instead of totaled. That leaves you with a plane with heavy damage history instead of a check.
I carry GNIM because I'm willing to self-insure the hull inflight but the plane is based in tornado alley. (GNIM=full liability, but hull coverage only when the plane is parked)
N8RV
Well Known Member
I flew the first year or so with only liability. I paid for things as I built, so the money was already spent. If I wrecked the plane and walked away, at least I wouldn't have to continue paying a monthly payment for a plane that no longer existed.
However, after reading posts here from some very wise people, it sank in that if I had engine trouble and had to put it down somewhere, I would likely put more effort into trying to prevent damage to the plane and less on surviving the event. Trying to stretch a glide to get to a road instead of a field to save the plane could kill me in the process. Once that sank in, I was comfortable paying the extra for full coverage.
When I would fly around during Phase I and look around for emergency fields for landing, I was always concerned about getting the plane out of some farmer's field. How would I do that? I don't worry about that anymore.
For me, getting full coverage was peace of mind.
However, after reading posts here from some very wise people, it sank in that if I had engine trouble and had to put it down somewhere, I would likely put more effort into trying to prevent damage to the plane and less on surviving the event. Trying to stretch a glide to get to a road instead of a field to save the plane could kill me in the process. Once that sank in, I was comfortable paying the extra for full coverage.
When I would fly around during Phase I and look around for emergency fields for landing, I was always concerned about getting the plane out of some farmer's field. How would I do that? I don't worry about that anymore.
For me, getting full coverage was peace of mind.
Wayne Gillispie
Well Known Member
My brother has a QC Challenger with liability only. I only carry full coverage on our vehicles until they are 5-6 years old. If our RV was worth 20k, then we would have liability only. Good luck with your decision.
Saving the plane vs. survival
I read somwhere else that a person thought that way. I don't have that problem - when anything goes wrong survival is number one with me ALWAYS! Part of the survival is switching tanks turning on the aux. pump etc. I have actually experienced those choices several times and protecting the airplane from damage never even entered my mind.
So you are operating your 2000 actual operating hours since new Lycoming and have a prop strike. What does your insurance company do? I've never had that experience so it is an honest (not rhetorical) question.
I know someone that frequents this forum that recently found a big gouge on the back side of a blade on a relatively new prop - how did that work out?
Bob Axsom
I read somwhere else that a person thought that way. I don't have that problem - when anything goes wrong survival is number one with me ALWAYS! Part of the survival is switching tanks turning on the aux. pump etc. I have actually experienced those choices several times and protecting the airplane from damage never even entered my mind.
So you are operating your 2000 actual operating hours since new Lycoming and have a prop strike. What does your insurance company do? I've never had that experience so it is an honest (not rhetorical) question.
I know someone that frequents this forum that recently found a big gouge on the back side of a blade on a relatively new prop - how did that work out?
Bob Axsom
N941WR
Legacy Member
The insurance company deducts the cost of the amortized hours from the cost of your new engine. In my case, they figured the cost of the used engine was $15K. That was divided by 2000 hours. The resulting $7.5/hr was multiplied by the 250 hours I had put on the engine. That came to $1,875 which was then deducted from the $15K, giving me an engine budget of $13,125 for my engine. I added some money out of my pocket and bought a new ECi O-360 kit.
The only real area of negotiation was the hourly rate they paid me to rebuild my plane.
I feel like Bob and I think alike. I am not a big fan of the system the way it is, you betting you'll need it and the insurance company betting you won't. The difference is you pay no matter what. The "big insurance company" deals in quantity. Life insurance works because more people are born every year than die. Anyway, I am purchasing a plane for ~35k while thats not necessarily a small number its not millions. I appreciate all the input, and opinions it does effect my decision making process. Thanks again.
I have Liability ONLY insurance for more than 10-years.
Insurance companies are ONLY in business to make money. IF you have a claim, the insurance company will do everything it can to not pay anything. Once you hit 70% of your insured value, they total your airplane and own it.
If you owe money on the airplane, you must have full coverage. If you own your airplane out right, you have a choice to have or not to have full coverage.
Maybe I am in the minority with liability only but the money I have saved is money available for other things.
I have liability only on both of my cars also. I do not pay for any life insurance. I am someone that does not believe in insurance other than to provide for the other guy if I should hurt them. I am willing to accept the consequences for what damage I do to what I own but since I am unable to proved for others, i have insurance to help them for what harm I may do to them.
Insurance companies are ONLY in business to make money. IF you have a claim, the insurance company will do everything it can to not pay anything. Once you hit 70% of your insured value, they total your airplane and own it.
If you owe money on the airplane, you must have full coverage. If you own your airplane out right, you have a choice to have or not to have full coverage.
Maybe I am in the minority with liability only but the money I have saved is money available for other things.
I have liability only on both of my cars also. I do not pay for any life insurance. I am someone that does not believe in insurance other than to provide for the other guy if I should hurt them. I am willing to accept the consequences for what damage I do to what I own but since I am unable to proved for others, i have insurance to help them for what harm I may do to them.
rocketbob
Well Known Member
I am very very VERY glad I had NIM coverage on my -6.
I can control maintenance, pilot decision making, but I can't control mother nature.
I live in tornado alley and am always concerned about the weather here in the spring. It turned out to be a tornado in FL that took my airplane.
My experience with Nationair and Chartis was excellent. They paid out in full and I bought the salvage back for a reasonable price. The rebuild is my next project.
The savings of not having NIM coverage over ten years was a little under 10% of my hull value. Boy am I glad I didn't skimp on that.
I can control maintenance, pilot decision making, but I can't control mother nature.
I live in tornado alley and am always concerned about the weather here in the spring. It turned out to be a tornado in FL that took my airplane.
My experience with Nationair and Chartis was excellent. They paid out in full and I bought the salvage back for a reasonable price. The rebuild is my next project.
The savings of not having NIM coverage over ten years was a little under 10% of my hull value. Boy am I glad I didn't skimp on that.
Last edited:
Sam Buchanan
been here awhile
I agree, Bob, the difference in premiums between liability only and GNIM is very modest. I am willing to take responsibility if I wad up the plane, but I want my plane back (or a large check) if it gets creamed by a tornado or hangar fire. Last April our airport got hit by a F0 and a F4 missed by only two miles. Over the past twelve years I've paid about $3000 total for the difference between liability only and GNIM with full hull coverage while the plane is in the hangar. I consider that a bargain and don't worry about the plane when the tornado sirens start wailing......
Glad to hear you had good claim service. I had Chartis (AIG) until last year when Global came in with a slightly lower quote.
[I moved this thread to General Discussion because it impacts all of us]
Last edited:
Mile High Relic
Well Known Member
Choose what you are most comfortable with, and be comfortable with the decision. There isn't a right or wrong answer. Do what works for you.
However, if paying a premium is "betting you'll need it," then not paying a premium is YOU "betting you won't," because the insurance company isn't doing any betting. They're sharing the risk across a pool. You are accepting individual risk.
In reality though, insurance isn't betting at all, it is simply a way to transfer/allocate risk. Paying a premium transfers the risk to someone else, just as not paying a premium allocates the risk to you.
BTW, life insurance works because there is an army of actuaries calculating the likelihood of payout, and pricing premiums accordingly. I don't believe birth rates have anything to do with it. Death rates...sure. I don't expect to "win" any life insurance payout, but it is very comforting to know my wife will get a great big check if I fall over from a heart attack or get hit by a bus.
All "for profit" companies exist to make money. You are in business to make money, so is Vans. All three of you provide services as a way to generate revenue, and hopefully there is profit left over.
My experience with aviation insurance companies is exactly the opposite of yours. They could not have been more helpful. I've received about $30K from two payouts (neither my fault) and there was a minimum of paperwork and inquiry. In one of those claims, I'm sure the total my insurance company paid out was around a quarter million, and no one got sued.
I could suffer a $70K loss (rough value of my RV6) and survive. I'd just end up working a couple more years to compensate. My flying would be in a world of hurt though, and would probably be done altogether.
And...my premium went down $300 this year.
Hull Coverage 1.5 - 2%...
...of stated value.
I have had my one hailstorm loss. Must have been unpredictable. The fabric on the Aviat Husky demonstrator tied down 100' away was shredded and Driggs, ID is only 40 miles from the factory. BTW, they had full coverage from AIG, too. When I called to make my claim, they had already paid out on the Husky, and didn't bat an eye.
Does that mean I should quit buying full hull coverage since the insurers expect me to have no more than one claim every 50 - 66 years?
I'm pretty sure I won't live another 50 years - I would be 113.
Just the same I think I'll keep paying based on my positive experience.
Larry Tompkins
N544WB -6A
W52 Battle Ground WA
...of stated value.
I have had my one hailstorm loss. Must have been unpredictable. The fabric on the Aviat Husky demonstrator tied down 100' away was shredded and Driggs, ID is only 40 miles from the factory. BTW, they had full coverage from AIG, too. When I called to make my claim, they had already paid out on the Husky, and didn't bat an eye.
Does that mean I should quit buying full hull coverage since the insurers expect me to have no more than one claim every 50 - 66 years?
I'm pretty sure I won't live another 50 years - I would be 113.
Just the same I think I'll keep paying based on my positive experience.
Larry Tompkins
N544WB -6A
W52 Battle Ground WA
Neither of these statements is true, from where I sit. And I deal with this almost every day.
From a practical standpoint, it if FAR more profitable for the insurance company to write you a check for 20-30-50-100,000 dollars on a hull claim quickly, with just the minimum required documantation, than it is for them to fight with you for two years about what they'll pay. The policy language is VERY clear and it describes EXACTLY what will be paid. Most problems come when the policy holder doesn't understand what he's bought and assumes something should be paid, when the policy has said all along that it shouldn't be.
A good example of that is an engine teardown / repair. The policy is designed to repair or replace (their choice) with like kind and quality. If you have a 2000 hour engine, then no, the insurer isn't going to buy you a brand new IO-360. You'll get payment for the value of the at-TBO engine you already owned. The claims adjuster doesn't make that up as he goes along - it's all right there in black and white years ahead of time.
They also don't AUTOMATICALLY total at 70%. Generally, the rule of thumb is when the estimated repairs minus the estimated salvage value approaches the insured value, they consider a total. Work with the adjuster on this. Tell him what you would like to see happen, and they can generally work with you to achieve that goal, within the confines of the policy.
