LLJohns Aviation Insurance marked 50 years of insuring clients in the aviation industry last month. Since 1971, LLJohns has advocated for thousands of aviation-related businesses and individuals with a personalized approach to providing insurance and peace of mind.
You’ve read about the safety and financial risks of illegal charter. What impact might these activities have on your aircraft insurance coverage?
Competition among underwriters has kept aviation insurance rates low for more than a decade – unsustainably low. That’s why those good times have come to an end, resulting in fewer insurers, tighter underwriting standards, and more scrutiny of pilot experience and training – creating today’s hard market with increased rates.
In early 2018, most buyers began hearing that their aircraft insurance rates would be increasing for the first time in years. Rate increases of 3-5% for operators with clean loss records were common, and 15% for those who’d had claims. By the end of 2018, claims free operators were seeing 10-15% rate increases, and those with claims history even higher.
The market — not you — determines the worth of your aircraft. In the case of aircraft disappearance or serious damage, that market value also determines what action your insurer will take. And therein lies the danger in overvaluing an aircraft on your insurance policy.