CFI-to-CFI Newsletter - Volume 11 Issue 2 - 10

FLY WITH FOCUS

ASI MESSAGE

HELP LOWER INSURANCE RATES

BY RICHARD G. MCSPADDEN, JR.

WE PILOTS CAN DO MORE TO LOWER AIRCRAFT INSURANCE
RATES-A LOT MORE-AND WE COULD DO IT WITHOUT A MAJOR
OVERHAUL TO HOW WE OPERATE. We just need more focus,

more consistently. Those were my big takeaways from spending
time with insurance carriers earlier this year, working to
understand recent rate hikes.
To be sure, insurance rates are complex and involve some
dynamics beyond the control of most GA pilots, and there are
some age-related trends that AOPA is working to understand.
Tom Haines recently wrote about some of those dynamics
(aopa.org/pilot/insurance2020). But I want to come at the
issue from a different angle. Author Stephen Covey wrote about
the "circle of influence." What can we GA pilots do within our
circle of influence to positively affect the insurance issue?
NTSB accident reports and trends help us to understand the
most serious accidents, but insurers cover incidents well
outside of NTSB purview. In fact, most aircraft incidents
resulting in insurance claims do not have to be reported to
the NTSB. The dynamics of the business side of insurance
surprised me. To be clear, I didn't conduct a scientific study.
These observations are from conversations with and some
limited data sharing from insurance companies.

Not surprisingly, our most expensive accidents, as measured
by insurance payouts per accident, are controlled flight
into terrain and crashes on approach. In-flight breakup and
weather-related crashes are also among the most expensive per
incident. These claims typically include complete payout for
hull coverage, and liability and loss of life payments. However,
they are not the most costly to insurance carriers because,
thankfully, they are infrequent. The most costly accidents are
less expensive per event, but their volume creates more drag on
the profit and loss statement.
Our most costly problem in GA is gear-up landings and gear
collapses, although their cost per incident, $70,000, is lower than
the more catastrophic accidents. Gear-ups are a hidden issue in
GA accident statistics. These almost never meet NTSB reporting
criteria, so the only way to get a true feel for the actual number
is to review insurance claims. Gear-up landings are the second
most-claimed incident. The overwhelming number of gear-up
landings are inadvertent, meaning that through distraction
or some other complicating issue, the pilot forgot to extend the
gear. The cause behind gear collapses is more difficult to discern,
but a significant problem is pilots mismanaging the landing
gear handle while on the ground, such as after maintenance
procedures, or mistakenly grabbing the gear handle instead of
the flaps lever or some other knob.
https://www.aopa.org/news-and-media/all-news/2020/january/23/why-insurance-rates-are-increasing-10-to-100-percent
CFI-to-CFI Newsletter - Volume 11 Issue 2

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