AOPA Pilot Magazine - August 2018 - 84

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on risk-say, a low-time tailwheel pilot or
a noninstrument-rated pilot with a piston
twin-depends on that carrier's philosophy
and recent claims history. And a smaller
market means more volatility: One bigticket insurance claim can wipe out years
of premiums in a given risk category for an
aviation insurance company.
"In aviation insurance, you're dealing
with a smaller sample size, and when you
get into older pilots an even smaller group,"
Bowman said. "They're basing their pricing and underwriting decisions on their
best interpretation of the accumulated data
that they have."
Age is one of several factors carriers consider when they analyze claims
payouts, so it's hard to specify a cutoff of
when pilots will start to see higher rates or
more restrictive terms. But Bowman said
age starts to become a factor at about age
70, particularly when insuring faster, high
value, or complex aircraft.
The carriers AOPA Insurance spoke
to reported that all things being equal, the
average claim payout is higher for pilots
over age 70. Does that mean older pilots
are getting in more accidents and incidents
than their younger counterparts? Not necessarily. The higher average claims cost for
older pilots is driven by a higher severity,
not a higher frequency, of claims, Bowman
said. Insurers are paying more for each
claim.
And from a statistical perspective, the
smaller population of over-70 pilots means
a single high-severity claim can erase years
of premiums from that demographic group.
Insurance companies set their premiums
to cover the expected claims payouts for
a group, so even claims-free, active pilots
can expect higher rates or lower limits of
liability as they age.
But age alone is rarely a reason for
denial of coverage. Insurers view risk factors as a package, so a 75-year-old active
pilot with an instrument rating may have
no trouble renewing his policy on a Cessna
152-but a VFR-only pilot of the same age
with the same total time, but fewer hours
the previous year, may have tighter underwriting requirements to insure his new
Mooney. Those could include a requirement for an annual medical certificate, an
84 | AOPA PILOT August 2018
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AOPA Pilot Magazine - August 2018

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