Financing and Insurance

vmirv8bldr · #1 11-29-2007, 03:49 PM

Part of this is a vent, part educational for other builders to consider, and part a request for knowledge and experience.

I am financing the engine and avionics on my -8, the price of a nice car. Everything else I've paid for to date without even credit card debt. I contacted an extrememly reputable aircraft financing company with an inquiry, and one of their requirements is to carry FULL FLIGHT insurance on the plane, even though it won't be finished for another 12-18 months. Ok, that's weird, but what the hey, call the EAA insurance guys. Underwriters seem to be unwilling to insure with less than 250hrs, with a substantial amount of that in TW. (I still do not know what a substantial amount actually comes to in the decimal / arabic number system we use, and neither do the people explaining it to me.) I have about 40 TW, 110 total, and am flying at about 20hrs per year right now.

So for financing, no problem, there are several viable opportunities. I'll give someone else my business. But when it comes time to fly, it looks like I will be stuck if I don't have 250 hrs logged. 250 hours is doable, but that's about $10k (assuming fuel / rental prices don't change much) that I would much rather throw at an RV than at a FBO.

What do low time aircraft owners do for insurance??!! Who is the "Progressive" aircraft insurance company.

(I fully understand insurance companies are all about numbers and statistics, and I honestly can't blame them. But I expected to pay MORE for insurance, not be flat out DENIED.)

Thanks for letting me vent, I hope this encourages other low timers to fly while they build, and I hope someone on this awesome and extremely helpful forum has traveled this path before and can shed some light for the rest of us.

Thanks,

(This really kills building motivation!)

alpinelakespilot2000 · #2 11-29-2007, 04:10 PM

Talk to Jenny Estes at Nation Air (877) 475-5860. As I am in the process for getting builder's insurance--with liability coverage so that my county will lease me their hangar--she offered that I should have 25 hours of tailwheel time to get hull coverage once I get to flying stage.

PJSeipel · #3 11-30-2007, 05:20 AM

Depends on the underwriter, not the broker, and I think most of them have similar requirements. Jenny told me last time I spoke to her that if I didn't get my total time up over 250 hours by the time I was ready for in-flight insurance, that I'd be unable to get coverage on my RV-10. Just another data point.

PJ Seipel
RV-10 #40032

pierre smith · #4 11-30-2007, 05:49 AM

Hi Bart,
I've bought several airplanes over the last 20 years and always got the best financing deal from our local bank.....ag airplanes to Cessna 310's, my AT-6 and my RV. I didn't need insurance until it flew. They love the airplane business too.

Regards,

vmirv8bldr · #5 11-30-2007, 02:53 PM

Thanks Alpine Lakes. I checked with Jenny and was able to get a quote. As expected, it's high, but that's what low time entails and I'm prepared for that.

So for others going this route....

FLY WHILE YOU BUILD!!!!!

Expect underwriters to require 150 - 250 hours depending on the plane and gear configuration. So if you don't have 150 hours logged, by all means, DON'T STOP BUILDING, but you also need to get out and fly.

If you're going TW, you will need a MINIMUM of 25hrs TW time ON TOP of any other time you have. If you're low time, like me, more is definitely better.

Furthermore, you will be required to do transition training. If you are high time, then a minimum 5 hour in type will work. Low time like me, expect them to require 10 hours in type.

That covers getting insurance to fly. Now what about the financing predicament?

As stated by the replies above, there are alternative routes that do not require full-motion hull insurance while you are building. If your lender does NOT require full-flight but does need insurance, you can get Builder's Liability which is a loss payable plan that will cover you (your lender actually) while building, but not for flight.

I hope others find this information useful. Feel free to PM me for more information.

asav8tor · #6 11-30-2007, 03:23 PM

If it makes you feel any better, when I bought my RV (finished and flying), I had to get transition training. I had over 10,000 hrs total time and over 700 hrs tail dragger.

Each time they pay out a claim consideration on restrictions to the next policy might be considered. If someone says "All I had to have/do was...." Well, that might have been 5 years ago. Expect over time as the years pass for items to creep in; number of hours, currency, time in type, transition training, etc. If this works as it should hopefully the claim loss rate would be held in check and premiums would not skyrocket. If they did not add restrictions it's possible the underwriters could exit the market if the premiums became so high not enough people bought insurance to spread the risk.

Sam Buchanan · #7 11-30-2007, 03:33 PM

Quote:

Expect underwriters to require 150 - 250 hours depending on the plane and gear configuration. So if you don't have 150 hours logged, by all means, DON'T STOP BUILDING, but you also need to get out and fly.

If you're going TW, you will need a MINIMUM of 25hrs TW time ON TOP of any other time you have. If you're low time, like me, more is definitely better.

At the risk of raising the ire of those who feel safe in their RV even though they are very low-time, I suggest that you need at least 150-175 hrs before you even consider flying an RV.

I know, I know, a pilot or two has gotten his primary training in an RV, but when I hear of a very low-time pilot planning to fly an RV.....I cringe and say a prayer for them.

That is my position and I'm sticking to it.