Everyone seems to be talking about insuring their Cirrus at what they paid for it. Is that its real value? Is the insurance company really going to pay that in a total loss? Aren’t they going to pay the depreciated value, rather than replacement cost – the value of a similar used airplane? So, why state the value so high?
Everyone seems to be talking about insuring their Cirrus at what they paid for it. Is that its real value? Is the insurance company really going to pay that in a total loss? Aren’t they going to pay the depreciated value, rather than replacement cost – the value of a similar used airplane? So, why state the value so high?
I was an aviation insurance broker and consultant for over 25 years. Almot all reputable insurers insure the aircraft hull for “insured/stated value” rather then “actual cash value” which is the method used in insuring most cars. Stated value will pay the face amount of the policy less any deductibles where actual cash value will pay the depreciated value or market valur
If I understand it right:
The insured value is what the insurer can buy you out for if you have a claim.
You want it very close to the value of the plane, not what you paid for it.
For instance an SR20 which cost an early buyer about $205,000 with taxes would cost about $252,000 and a two to three year wait to replace.
If insured for $230,000, it might sound reasonable that if you do $200,000 of damage to your aircraft they would buy you out for the insured value of $230,000 and part out the damaged aircraft to perhaps recover more than the $30,000 difference.
The problem is, if you had a $3,000 claim, might they pay you the $230,000, take the plane, fix it for $3,000, and sell it for $260,000.
Everyone seems to be talking about insuring their Cirrus at what they paid for it. Is that its real value? Is the insurance company really going to pay that in a total loss? Aren’t they going to pay the depreciated value, rather than replacement cost – the value of a similar used airplane? So, why state the value so high?