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How many of us Self-Insure?

Tram

Well Known Member
I've been toying with the idea of self-insuring or maybe carrying liability only.

Am I nuts?
 
You're not nuts. If you can afford the potential loss, certainly enjoy the savings!

Personally, I would always carry at least liability from an institution.
 
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My uncle has a Rans S7, the insurance premium for full coverage was in excess of 10% of the aircraft value per year.

He self-insures.
 
As Bill said, even if you can afford your own plane x 5, carry some sort of liability insurance. With that said, your questions is interesting because we discuss all the time with the folks that we fly with. Outside the money factor, you should consider what type of plane you are flying. Everything from being a nose wheel to a tail dragger, to an all metal vs. tube & fabric, and even what type of engine and prop you have should be considered. Here is why I say that. RV7A for example, loses the engine and has to put it down in muddy field, chances are its going on it's back or the nose wheel completely collapses and destroys the front end... Tail dragger, probably not. Most likely damage wheel pants and some minor damage but it's not going over.
Same field same scenario, take a SuperCub vs. a Cirrus of course different results. Also, with all of them, is there a 3 blade prop vs. a 2 blade.. maybe luck is on your side and the blade stops horizontally on a 2 blade, no chance on a 3 blade.

My point is you have look at what you fly, and what an off airport landing will most likely result in based on what you fly. Of course you skills come in to picture too but that is an entirely different conversation.

For me, I carry insurance mostly to protect other people and my family incase of catastrophic loss.

AB
 
I have considered it often and actually did for a year when I saw the premium they wanted to add my son as a student (switched to liability only). Self insuring makes good sense for the older 2 seat varieties that many of us have built for under 100K, especially if one does not require the plane for any meaningfull purpose and could live without it. It doesn't make as much sense for the 10 and others that are worth hundreds of thousands, IMHO.

I pay around 1100 for the 6A (used to be less before my son was added) and could get liability only for $200 or less. Going naked without liability is insane in my mind. $1M of coverage for damage you created for a $200 annual cost is almost stupid to not accept unless you are worth MANY millions; Even then it is an economically poor risk decision IMHO. Engine failures are very real risks and often can't control what you are going to hit and how much it will cost to replace it. This is especially true if you live and fly in a densely populated area. Even the farmer is going to have his hand out for the crop you trashed.

So that leaves me $900 for a potential total aircraft loss. In today's market that plane is worth probably 80-90K, so about a 1% annual cost and therefore about a .75% statistical risk of losing that plane to a total loss. If you would replace that plane and don't have 100K burning a hole in your pocket, that is painfull. If you self-insure other stuff and have accumulated many savings from doing so and have 100K laying around, not so much, and just a part of the ebb and flow of savings/cost when self-insuring. Tough I would expect that this item may be disproportionately sized in that risk portfolio.

For me, I insure the 10 just because of it's value (just not worth the savings to lose that much money in an asset loss). On the 6A, it is mostly due to the fact that it sits on the ramp and TS or hail damage is far more likely than me totalling the plane from an accident. We had an F1 tornado hit our airport this summer though I was spared. The delta from full coverage to GNIM is not great enough for me to not accept the extra coverage. All of my cars are liability only. However, I would do the repairs from most minor accidents, so that puts me in a bit different of a category. I have saved enough in premiums over the years to fully cover any individual total loss in our fleet, so wouldn't lose a minutes sleep if/when it happens. If you can't say that for your situation, think long and hard before self-insuring.

This is a very personal decision based upon one's risk stance and economic strategy in dealing with loss. That said, if a total loss of the aircraft would create financial problems for the owner, insurance for an asset of this value is kind of a no brainer, considering that RV rates fall near the reasonable end of the spectrum.

Larry
 
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Not going to blindly agree with the previous tri-gear versus tail dragger flip-over probability.

My opinion only but the certified versus EAB would probably be a huge factor if nit the biggest. Parts are so expensive in cert world that even slight damage can economically total an aircraft. If you know any Cessna 18x owners, ask them about the "hockey stick" AD. Before some of the related STCs came out, Cessna was getting $14K for the main parts. I assume that was for the pair but don't know. That didn't include labor which was extensive. It effectively grounded many aircraft for a while. My point? The parts would probably have been a few hundred in EAB world.

Anyway, an accident in a self insured, certified aircraft would most likely turn most into scrape; thus, probably the biggest impactor in my mind. Thankful I'll be living in this world versus Mooney world going forward.
 
I split the difference with ground-not-in-motion (GNIM) coverage. This offers full liability at all times and covers hull loss if something catastrophic happens to the hangar (we have tornadoes). Cost is not much more than a liability only policy.
 
Insurance

You're not nuts. If you can afford the potential loss, certainly enjoy the savings!

Personally, I would always carry at least liability from an institution.

There are, as many have said, more factors to consider. Take the very nice 10 for example. Lets say it is worth $300k ( I know at least one that sold for $325k). My son in law had his insurance company refuse to offer more than $200k for his recently finished 10. If he damaged it, the insurance company would likely total it, give him a check for $200k and take the airplane. He spent $200k building it and it is excellent. I asked him if he would sell it for $200k and he said no of course. If it got damaged he could sell the panel alone for $50k and if the engine were not damaged he could sell that as well. The math just doesn't work. If it was damaged he could fix it, he built it after all.

You really have to decide if you can afford the loss and consider what you will get if you have relatively minor damage and they total it. You wind up with a check and no airplane.

Personally I do not insure my 9A for hull, but do for liability of course. Almost no one can afford to risk a liability event and EAA requires it for Young Eagles Flights and I do those. My wife and I ran a flight school for years and most of the time had 5 aircraft operating...none were insured for hull coverage. We operated for almost 15 years and never had a complete loss and only one case of damage, and it was minor, costing about $2k to repair. In hurricane Hugo we had some wing damage to our Aerobat, which was repaired for about $4k and had to replace a prop blade on our Arrow, but that's it. We have saved untold tens of thousands in hull coverage insurance over that period because hull coverage is high for flight instruction and student solo flight.

The bottom line is to consider what would you get from the insurance if totaled and could you stand that loss if you did not and sold off the parts or repaired it.
Ed
 
I split the difference with ground-not-in-motion (GNIM) coverage. This offers full liability at all times and covers hull loss if something catastrophic happens to the hangar (we have tornadoes). Cost is not much more than a liability only policy.

Exactly what I do. Not too worried about tornados here but with the climate changes we're seeing, it might happen. It does get windy from time to time.

Insurance is sure strange around the world - we have to have liability here of about 5 million euros. 350 euro deductible.

Looks at the countries that are excluded! :D

Les garanties de la présente police s’exercent dans le Monde Entier à l'exclusion
des pays suivants : ETATS-UNIS D’AMERIQUE ; ALGERIE, BURUNDI, REGION EXTREME NORD DU
CAMEROUN, REPUBLIQUE CENTRAFRICAINE, REPUBLIQUE DEMOCRATIQUE DU CONGO,
ETHIOPIE, KENYA, MALI, MAURITANIE, COTE D’IVOIRE, LIBERIA, NIGERIA, SOMALIE,
REPUBLIQUE DU SOUDAN, SOUDAN DU SUD ; COLOMBIE, PEROU ; AFGHANISTAN, JAMMU &
KASHMIR, COREE DU NORD, PAKISTAN ; REGIONS UKRAINIENNES DE ABKHAZIA, DONETSK &
LUGANSK, NAGARNO-KARABAKH, DISTRICT FEDERAL DU CAUCASE NORD, OSSETIE DU SUD ;
IRAN, IRAK, LIBAN, LIBYE, PROVINCE EGYPTIENNE DU NORD SINAI, SYRIE, YEMEN; TOUT PAYS
OU L’AERONEF ASSURE EST OPERE EN VIOLATION DES SANCTIONS DES NATIONS UNIES ET/OU
DE L’UNION EUROPEENNE.
 
After my first year flying my RV-10 I switched to ground-not-in-motion (GNIM) coverage due to the premiums going up 40%. It made no sense to me I go from zero hours make and model to 150 hours and the premium jumps. Well I do understand but I wasn't willing to accept it.
 
How Many RV's have accidents?

How many RV's on a percentage basis have been involved in accidents?
In 2015, out of 9202 RV's in the FAA database, there were 538 accidents. That is 5.8%. The risk is not trivial.
In my case, I was sitting still at OSH this year for departure and had a RV8 run into me, cut the rudder and elevators off. Added two RV's to that number in an instant.
 
Very helpful posts! Looking at the annual premiums as a percentage of estimated hull value (.8%) confirms my decision to continue full coverage on the 10.
 
I have always self-insured my RV-4 from day 1. As others, I carry a liability policy that is about 1/2 to 1/3 of the hull cost, depending on the current market conditions.
 
The concept of forgoing hull insurance and going liability-only is part of my plan if my premium gets out of bounds. I (my estate) can afford the $100,000 loss of the airplane but I certainly don't want to subject myself (my estate) to a liability claim that could go into the million$. I do think that I'd want not-in-motion insurance, depending on the cost, to mitigate against an act of god damaging or destroying my airplane. Emphasize depending on the cost...

ETA: by the way, I have a $3 million liability umbrella policy. My home insurance agent informs me that aviation accidents are totally excluded from that policy, and he tells me that that is the norm for that type of policy.
 
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If you have ever had any involvement with the ambulance chasing lawyers you will NEVER NEVER NEVER go without at least liability.
I can only get a million on my $100,000.00 RV-6A, But, would never go without it at the small cost of $425.00 per year.
If you put it down in somebodies house they will sue you for 10 million before you get out of bed.
If you don't have any money for them to get FINE Go "bear"
I've put together enough money that I don't want them to get it.
I want to spend it myself.
I can afford to buy another aircraft, I can't afford to buy somebody else a Lamborghini. And a new house. And their retirement.
My three cents worth. Art
 
I was quoted $2180 for liability only (no hull coverage, even on the ground, nor theft coverage). This was for an Arion Lightning with declared value of $46500 (what I paid). Truthfully half of what a "typical" Lightning sells for. Adding hull coverage (only got 1 quote for that) takes the number to $6433.

I believe there has only ever been 1 fatal accident with a Lightning which was a student and instructor flying into trees that were in the airport glideslope at night. I believe 1 was lost in a ground fire due to flammable brake fluid leaking onto a hot brake disk rotor (I believe ATF is used for brake fluid). Beyond that one has the typical nosewheel failures similar to Vans and usually the aircraft are repaired. There have not been many flip overs as seen with the Vans models. Therefore I have a hard time understanding why the risk is apparently so elevated to justify such high insurance premiums.
 
I’ve self insured since the mid 60’s….carry 3 million liability at a cost of around $300.00. :)

This is simply too good to believe. Is this a Canadian thing? Or are there per passenger restrictions? If ‘no’, I’m very interested. Can you share the name of the company?
 
Don't forget the airport requirement. It may only require Liability but they do often require it.
 
As Bill said, even if you can afford your own plane x 5, carry some sort of liability insurance. With that said, your questions is interesting because we discuss all the time with the folks that we fly with. Outside the money factor, you should consider what type of plane you are flying. Everything from being a nose wheel to a tail dragger, to an all metal vs. tube & fabric, and even what type of engine and prop you have should be considered. Here is why I say that. RV7A for example, loses the engine and has to put it down in muddy field, chances are its going on it's back or the nose wheel completely collapses and destroys the front end... Tail dragger, probably not. Most likely damage wheel pants and some minor damage but it's not going over.
Same field same scenario, take a SuperCub vs. a Cirrus of course different results. Also, with all of them, is there a 3 blade prop vs. a 2 blade.. maybe luck is on your side and the blade stops horizontally on a 2 blade, no chance on a 3 blade.

My point is you have look at what you fly, and what an off airport landing will most likely result in based on what you fly. Of course you skills come in to picture too but that is an entirely different conversation.

For me, I carry insurance mostly to protect other people and my family incase of catastrophic loss.

AB

That is quite a statement......
flip.JPG
 
Now this is a quite a clean accident. The propeller cone of the airplane doesn't even look like it is damaged.
 

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RV7A for example, loses the engine and has to put it down in muddy field, chances are its going on it's back or the nose wheel completely collapses and destroys the front end... Tail dragger, probably not.

Here is a few I found by searching all of about 1 minute, exclusively for RV-6.
 

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Funny how everyone decided to prove me wrong rather than actually thinking about what my point was. If you really want to prove me right or wrong, why don’t you look at how many nose wheels stay upright during an off airport landing … compare .
 
Funny how everyone decided to prove me wrong rather than actually thinking about what my point was. If you really want to prove me right or wrong, why don’t you look at how many nose wheels stay upright during an off airport landing … compare .

The actual point is it depends.

It depends on the condition of the surface. It depends on who is flying the airplane.
To make a true comparison we would have to have the data of what percentage of all tail dragger‘s of a particular model flipped on off field landings versus the percentage of tricycle gear airplanes of a particular model flipped on off field landings. One thing that definitely SKUs The perceived data is that there are quite a few more tricycle gear airplanes of each model (with the exception of the RV eight and of course the four and the three which don’t have a tri-gear version ) then there are Taildragger’s of each model. So unless you dig into the details of the data the perception is being skewed.
 
Aaaanyyyywaze......., I bought a little airplane about 5 years ago for which I could not find anyway to satisfy any kind of insurance "transition training" requirement.

Rather than contacting an insurance company and trying to jump through their hoops before flying, I did 10 hours of "starboard D" along with a whole bunch of take-offs and landings (full stop at first, till the peanut gallery gave up, put the fire extinguishers away, and quit applauding every bounced landing attempt).

Then, after that I called the insurance company for a quote, and truthfully told them I had 10 hours in make and model. I still only got the liability coverage.
 
Funny how everyone decided to prove me wrong rather than actually thinking about what my point was. If you really want to prove me right or wrong, why don’t you look at how many nose wheels stay upright during an off airport landing … compare .

RV7A for example, loses the engine and has to put it down in muddy field, chances are its going on it's back or the nose wheel completely collapses and destroys the front end... Tail dragger, probably not. Most likely damage wheel pants and some minor damage but it's not going over.


I was not trying to prove you wrong. In fact the above statement in blue is fairley accurate and I would agree that if you didn't flip in that situation, luck was on your side.

On the other hand, (with all due respect) the statement above in BOLD black is just a flat out lie. If I knew that statement to be true, I would convert my 6A tomorrow and never worry about an off field landing.

ps.... I do apologize for being so harsh.....:eek:
 
As has been alluded to above - consider where you fly.

Some airports down here require $35,000,000 USD liability coverage no matter what you're operating. Guess they reckon you're going to scuff the paint on a 787 or summat....:confused:
 
If I have to pay over $2k just for liability coverage, I guess they are just going to have to do without my business.

Here in Michigan we have the most expensive car insurance in the US and a vehicle of the same value as my plane will cost about $1600 a year to comprehensively insure. Given icy roads for 5 months of the year, millions of car/deer collisions a year especially in summer and it makes me think that the likelihood of crashing the plane is lower than the risk of getting in a car crash.

Oh, and we get to pay for our own damage here regardless who is at fault (a "no fault" state). So no chance for the insurance to recover costs from the guy actually at fault. So I will never never be paying $6k+ to insure something I bought for $46k.
 
I don’t insure my planes or cars, only my house, must have saved myself a fortune over the years!
 
I don’t insure my planes or cars, only my house, must have saved myself a fortune over the years!

Country, culture, laws, financial circumstances, family circumstances, employment circumstances, litigation climate, risk tolerance, luck…many variables involved in the decision as to whether or not “going bare” is a good idea.
 
Always done liability only. Fairly cheap. And there have been circumstances where I needed a few hours in M/M but instruction was not possible so I flew bare for a little bit to build the hours.

I am comfortable with liability only because I have some level of control over the outcome of my actions and if I screw up, I'll "own" the result. I also have paid cash for all my airplane purchases to date so their loss will not impact my family's future. They are "just" playthings in the grand scheme.

I do like the idea of GNIM though, because there ARE circumstances that can damage my airplane that are not covered by the other guy or my own skills - the tornado at Sun n Fun a few years back comes to mind. That said, the GNIM coverage on my Rocket was still pretty expensive last time I checked. Now that I'm over 500 hours M/M I'll have to re engage.
 
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