What's new
Van's Air Force

Don't miss anything! Register now for full access to the definitive RV support community.

Co-op Airplane Insurance

David_Nelson

Well Known Member
Asking for a good friend:

Has anybody considered and/or thought about co-op airplane insurance? Apparently this is unheard of in the GA world and he was wondering as to why?

Thanks,
 
Asking for a good friend:

Has anybody considered and/or thought about co-op airplane insurance? Apparently this is unheard of in the GA world and he was wondering as to why?

Thanks,

I wonder exactly was is meant, by a "co-op airplane"? Certainly, there are partnerships; and some are owned by a limited liability corporation.
 
Well what? I would not use the word CO-OP. "Co-op" usually refers to a cooperative society (socialism), business, or enterprise. It is overused and misunderstood to the point it means nothing. In general is is a WORK agreement, everyone works for the group. Your idea of "SELF INSURED" group is not really workable except in context of a aircraft partnership where the insurance is paid by all the partners in the aircraft.

If you mean GROUP discount, EAA use to have discount insurance for EAA members. That is who I used when I had hull insurance.

As Per above comment you can have partnership's and share all expenses in an AIRPLANE, including insurance premium. The INSURANCE will be based on the lowest least experienced pilot (hours, ratings) in the partnership. The other factor is value of hull. This however will save everyone money in the plane partnership. This is by far the most practical way to fly cheaper. The DOWNSIDE? You lose some freedom of being able to hop in your plane, anytime, go anywhere, as long as you like. Also the people in the partnership can have a good relationship or not. I was in a partnership with another pilot in a Piper. I flew the plane the most, but paid more of the hourly reserves and fuel of course. However the other pilot who flew little was deferring half the fixed cost. I could basically fly it anytime I wanted or go on trips.

Setting up your own insurance company or "self insured group" where many aircraft owners pay into the "insurance pot" with premiums, that would be a good trick and require some lawyer stuff. I think it would make everyone's liability greater potentially. To be blunt SOME PILOTS suck. I don't want to be associated with their liability.

If a plane crashes and hits other people and property, or passenger hurt or worse there is liability that can (and likely) exceeds any CO-OP Insurance group funds. Say you get 10 pilots and plane owners to pay $5000 yr. That is $50K a year. However the CO=OP has no solvency. Say no payout after 10 yrs. Then a RV10 takes out 4 souls and hits a house and kills someone there? Well that on large claim will exceed funds. They will go after each person in the group, and everyone will have to shell out. The chance of getting 10 pilots to agree to this much less 100 pilots is slim to none. INSURANCE COMPANIES HAVE 100's of MILLIONS or BILLIONS IN ASSESTS. That is what you are buying their POT OF MONEY to pay out any claim against you.

To set up as an insurance underwriter (not agent or agency that sells insurance) is a big deal and takes big money and lots of legal regulations, federal and state. No insurance company can exist if they pay out mire than they take in. As far as the current premium you would like to think it is based in statics. If the accident rate in RV's is higher they charge more. Personally I think insurance companies are gouging. Second NO COMPETITION. Each state has insurance commissioners and holds insurance (underwriters) accountable for car and home insurance. There are many more cars and homes insured than Van's Aircraft RV's. When you get into real exotic insurance, for a satellite as example you go to Lloyd's Of London. You can insure anything if willing to pay the premium.

GA planes are a niche market. Airlines have a large fleet. Some of the planes they own outright, the hull is "self insured", some are insured because they are leased or financed. The airlines have an advantage of better accident rate. The down side is the size of liability with passengers and cost of aircraft if total loss. I can't image what they pay. In any case I am sure they have liability insurance. If a accident happens lots of money is paid out. If you read the FINE PRINT on your ticket there is a LIMIT to what you can sue for.

Insurance is buying something you hope you never have to use. Insurance is like gambling and if you win (by losing and bending your plane) then you get a PAY OUT. Most of the time the payout is not enough to "make you whole".

Last is NO (hull) insurance and just liability (or no insurance of any kind, it's not required), if you bend it you bought it. After that is liability. You can be sued for everything you have or will ever have in the future. There are games people play putting their assets in other peoples name, i.e., hide wealth. That seems pretty duplicitous.

If I bend my plane, I own it, will have to fix it. I built it after all. As far as liability I am insured, but have been san's any insurance at times. I did not take passengers. Some say you can have passengers sign a release. Not sure how well that would work. For me I want to do transition training in my plane or do transition training in others. Liability is of concern.

Some point out that if you sell a KIT PLANE you built and it crashes you might be libel and sued (even if you did nothing wrong building it). There was a guy who made several Mustang II's and sold them. Two of them had inflight structural failures killing the pilots who bought these planes. The builder had passed away of old age. Can't sue a dead person with no assists. If you are not trying to provide for a spouse, kids, family, friends, when you pass away, be it natural causes or accident, not to be morbid who cares about your estate. You're dead.

I have a Trust and Will. Everyone should have one (a good one set up by lawyer in accordance to the state you live, not some online rubbish). I know what will happen when I die, I hope peacefully in my bed with my favorite pet at my feet and my 30yr old girlfriend at my side. Ha ha. I can dream can't I? If someone sues me after my death they will have to fight the estate, which has lawyers and is funded.

I have insured my RV for full hull value in the distant past. I recall it was well under $1000 a year. Those days are over. Insurance increase is the value of Van's RV's has got to ridiculous values (all planes have inflated in the last 3yrs). A good RV decades ago cost $30K-40K, $60K was high. You can add another zero to the end of those numbers. Look at what people want for a RV-10 or fancy RV-14. Granted in the 70's and 80's many RV's were built with a used 150-160HP out of a C-172, fixed wood prop, basic day/night VFR. Now planes have CS composite props, new high HP engines, full glass panels with autopilots, custom pro paint, interior that. So Insurance is charging what the value is based on.

One of my cars is 12 yrs old and anther 7 yrs. Both have way more value than what Insurance would pay me if a total loss. One is a Diesel VW that is no longer made. So I am "self insured" on both. If I have a loss I can fix it or have enough money to replace it. I have liability of course. First it is not that much and second it is required by law.... My home insurance I was paying $2000/yr to a company I was with for 37 years. I shopped around and went with another company (name brand) and save about $400 a year, for similar coverage. One reason I switch was my long time insurance company fought me on a legit claim due to storm damage. Cars and homes have way more competition. Airplanes? There are few underwriters. Many planes are uninsured.
 
Last edited:
Group Captive

Appreciate the feedback thus far.

Some more appropriate words look to be 'captive insurance' or 'group captive'. Based on chats with my friend, sounds like some lawyers are being consulted to better understand the workings and requirements.

Do any VAF members have experience with forming/joining/operating a 'group captive'?

Thank you,
 
Back
Top