Insurance - Guest Editorial
For new readers to this blog, this is the 23rd post that started April 11, 2006. For content on the previous 20, check the August 12 summary. Also, there are knowledgeable and thoughtful readers posting comments as well. This is especially true for the past three posts, the material is certainly worth reading.
One reader has knowledge of insurance issues and has evaluated the program offered by Eclipse. It is not my area of expertise, I don't know if he is right or wrong, but he is waving a warning flag so we are going to put it up.
Thanks for the comments. I would like to point out some of what I believe to be flawed data on the Eclipse website, specifically your insurance link.
First of all, did anyone notice the limits of liability at $1M, $5M and $10M respectively? A very important question is whether or not this is a 'smooth' limit or a per seat limit.
Secondly, their resource is a broker. I would like to preface my comment to follow by stating how important brokers are and the value they bring to many aviation businesses. In the case of policies however; they (as everyone else) are at the mercy of the underwriters. If anyone is even remotely familiar with aviation insurance coverage they will quickly understand who finite the market is with the availability of desirable underwriters. I would love to know which underwriter is willing to take the risk on a pilot (ASMEL) with only 500 hours of total time and limited instrument and multi-engine ratings.
Third, note how only a $1M policy is available for a pilot with the minimum qualifications. I anticipate many of the individuals purchasing this caliber of aircraft will have insurance policies in place at their place of business requiring far more than a $1M limit.
Fourth, as a point of comparison on the premiums, I find it intriguing how high some of the rates are, even for the experienced level pilots. I have personally seen premiums for single engine turbine aircraft which have a higher hull value and $5M smooth liability limits for what Eclipse considers to be an experienced pilot somewhere in the $18K - $20K range...not ~ $30K as indicated on the Eclipse web site.
Mark my words....insurance will be a well underestimated thorn in the side of Eclipse in the not too distant future.
I wonder as a point of interest how Vern has has product liability spread amongst the underwriters. God forbid, when the first Eclipse 500 becomes a smoking hole in the ground (hopefully it never will, but for the time being let's just pretend it might happen), the underwriting community will not be very kind to Eclipse and it's owners.
I don't know about anyone else but I have never heard of an insurance underwriter being forgiving or loyal to an OEM when it comes to policy renewal time.
2:00 PM, September 07, 2006