Understanding Cirrus Insurance Issues

Guest Discussion
1

I have seen much written here regarding insurance lately. I would like to offer some insight for the discussion.

I am the Branch Manager for NationAir Insurance Agency’s Pleasure and Business (Light Aircraft) Office. Cirrus Designs has asked NationAir to help them with their current insurance situation. Cirrus refers anyone with insurance questions or problems to us. We insure many already and of course hope to write many more by providing this service and those described below to you all and Cirrus.

First, I recommend that you all read my article “Aviation Insurance 101” published in the latest (Sept 14) issue of GA News page 26 and InFlight (Aug) page 75. (Same article in both.) It sets the stage for this discussion as it identifies the players for you.

I hear some of you talking about one agent’s quote versus another. The aviation insurance agents you choose to deal with represent the same companies. And switching to another agent (by signing a broker of record (BOR) letter) merely assigns the existing quotes to the new agent. The quote remains the same.

With that being said, let me tell you a little about what NationAir is doing right now for you all and Cirrus:

  1. Educating underwriters (insurance company representatives) about Cirrus aircraft, pilot training, and accidents (i.e. the latest one which appears to be a maintenance failure as opposed to pilot error (i.e. scud running pilots)) with the hopes of calming them down, stabilizing and eventually lowering the rates.

  2. Getting other insurance companies into the market for Cirrus aircraft and keeping them there. Currently not all companies quote Cirrus Aircraft (one stopped writing coverages this summer, one has not yet begun but will, and one just knee-jerked and announced they were going to no longer write SR-22s and we are asking them to review that decision.)

None of this will happen overnight. Right now is an extremely difficult time to get the powers that be at the insurance companies to make rational descisions (or any at all). The are all extremely caught up in the War Risk cancellations/changes/requoting that is going on (mostly affects charter and large corporations that do a lot of overseas travel.) This will pass.

I think it is great that alot of the companies (including Phoenix which is no longer writing Cirrus Aircraft models) are renewing current policies as expiring or even with decreases. This is valiant of them, but honestly sort of makes the new purchase quotes right now look ridiculous.

Please feel free to reply with questions. Or you can contact me at jhelms@nationair.com.

Thank You

John “JT” Helms

Branch Manager

2

First, I recommend that you all read my article “Aviation Insurance 101” published in the latest (Sept 14) issue of GA News page 26 and InFlight (Aug) page 75. (Same article in both.) It sets the stage for this discussion as it identifies the players for you.

Here is the article that “JT” mentioned:

Insurance 101: Shop for a broker, not for a quote

By John “JT” Helms

9/14/2001

When insurance rates go up, airplane owners begin to wonder if they are getting a fair deal from their broker. When they try to “shop,” they get frustrated because they don’t know who’s who in the aviation insurance industry, and they don’t understand industry procedures.

For many airplane owners, shopping for aviation insurance must seem like dealing with people from a distant country or even outer space. This article should illuminate a little bit about your brokerÂ’s job and how the industry works. Hopefully, it will provide insight, spark some questions for you to ask your broker, and help you get the quote thatÂ’s best suited for your needs.

First, there are two types of aviation insurers.

Direct-writer insurance companies provide direct individual coverage through employee sales representatives.

Most insurance companies, however, use agents or brokers who handle many of the functions involved with providing coverage.

This article will mainly cover agents and brokers, but you should expect many of the same services from a direct writer.

How much do you know about your broker? You should ask questions about his services and which companies he uses.

Among other services, a broker should advise you on what type of coverage you may need, request and compare quotes from all the appropriate companies, explain your policy to you, update your policy (i.e., add or delete pilots and aircraft), keep records of your accounts and transactions, and initiate or assist you with claims.

As for the companies your broker uses, aviation offers few when compared to most other types of insurance. My firm, Nation Air Insurance Agencies, deals with only about 10 companies, all of which are highly rated by A.M. Best.

“Best quotes” may mean different things to different people. Policies come up for renewal annually. One of your broker’s jobs is to compare and contrast quotes each year. In these times when rates are increasing, many people get hung up on price. There are several other parts to your policy, however, that you may want to consider. One or more of the following questions may help you decide that a slightly more expensive premium is worthwhile:

What are the deductibles?

What are the Open Pilot Warranty requirements?

What is the A.M. Best rating of the insurance company? (Excellent or Superior, sometimes referred to as A or A+, are the preferable ratings.)

What is the companyÂ’s reputation for claim service?

I am planning a trip to . . . Is that territory covered in the policy?

If you are unhappy with the service you receive, you can change brokers. Some people fear that they will get locked in to one broker or blocked from dealing with another. Most insurance companies do use a clearance system when a broker requests a quote. Your name, your airplaneÂ’s N-number, or both, are blocked for as long as four months. So if you call a second broker and ask him to request a quote, that company will not provide one. Insurance companies do this for a couple of reasons; both relate to keeping down costs.

First, most of the companies have offices around the country, or at least many underwriters in the same office. The companies do not wish to compete with their own quotes and lower the premiums they are offering.

Second, the company does not want to have to underwrite the same account more than once per year. This saves them time, sometimes referred to as money, and they can forecast how many accounts they will have to quote each year. (There is a finite number of airplanes, airports and other accounts out there.)

The underwriting guidelines that the companies use are the same for all brokers. If you are unhappy with your broker, you can assign another one to handle your account by signing a broker of record letter (BOR, also known as an AOR or agent of record). However, if a company has already quoted your insurance, the quote will remain the same when transferred to the new broker. This is typically done at or near the renewal date of your insurance.

Shop for an insurance broker, not for a quote. Many airplane owners go to way too much trouble “shopping their insurance” without considering the benefits. Give a good broker up-to-date information, and he will give you the best options for making an informed decision. Don’t waste your time by doing work that you are already paying your broker to do.

John “JT” Helms is the branch manager of the Pleasure and Business office of NationAir Insurance Agencies, in St. Louis, Missouri. His office specializes in light aircraft insurance. He can be contacted at 877-475-5860 or jthelms@nationair.com. Nation Air’s website is at NationAir.com.

3

I have never met John, but I have insurance through someone in his office, presumably one of his employees.

My experience has been excellent.

One other thing on the subject. I cringe when I hear about $1 million coverage/$100,000 per person. This is almost no liability insurance at all, and leaves the pilot or his/her estate very vulnerable. Nationaire was able to get me $1 million smooth, with additional $2 million supplemental liability coverage. (Last April; 400 hours at the time/instrument rated) All economically. Thinking the unthinkable, go down with two passengers because of a dumb mistake, liability coverage is pretty important to protect your family or successors.

Andy

I have seen much written here regarding insurance lately. I would like to offer some insight for the discussion.

I am the Branch Manager for NationAir Insurance Agency’s Pleasure and Business (Light Aircraft) Office. Cirrus Designs has asked NationAir to help them with their current insurance situation. Cirrus refers anyone with insurance questions or problems to us. We insure many already and of course hope to write many more by providing this service and those described below to you all and Cirrus.

First, I recommend that you all read my article “Aviation Insurance 101” published in the latest (Sept 14) issue of GA News page 26 and InFlight (Aug) page 75. (Same article in both.) It sets the stage for this discussion as it identifies the players for you.

I hear some of you talking about one agent’s quote versus another. The aviation insurance agents you choose to deal with represent the same companies. And switching to another agent (by signing a broker of record (BOR) letter) merely assigns the existing quotes to the new agent. The quote remains the same.

With that being said, let me tell you a little about what NationAir is doing right now for you all and Cirrus:

  1. Educating underwriters (insurance company representatives) about Cirrus aircraft, pilot training, and accidents (i.e. the latest one which appears to be a maintenance failure as opposed to pilot error (i.e. scud running pilots)) with the hopes of calming them down, stabilizing and eventually lowering the rates.
  1. Getting other insurance companies into the market for Cirrus aircraft and keeping them there. Currently not all companies quote Cirrus Aircraft (one stopped writing coverages this summer, one has not yet begun but will, and one just knee-jerked and announced they were going to no longer write SR-22s and we are asking them to review that decision.)

None of this will happen overnight. Right now is an extremely difficult time to get the powers that be at the insurance companies to make rational descisions (or any at all). The are all extremely caught up in the War Risk cancellations/changes/requoting that is going on (mostly affects charter and large corporations that do a lot of overseas travel.) This will pass.

I think it is great that alot of the companies (including Phoenix which is no longer writing Cirrus Aircraft models) are renewing current policies as expiring or even with decreases. This is valiant of them, but honestly sort of makes the new purchase quotes right now look ridiculous.

Please feel free to reply with questions. Or you can contact me at jhelms@nationair.com.

Thank You

John “JT” Helms

Branch Manager

4

Thanks Andy. Maureen is your agent and helps me a lot with Cirrus customers.

The 1 Million limited to 100,000 per passenger (1 Mil/100) is actually very good coverage. The 1 mil/100 through most of the companies is very good because it provides the million of coverage for a devastating accident (running full steam into a loaded King Air or the like) and many accidents have very little or no bodily injury.

In most cases other than AVEMCO, that 100,000 sublimit only applies to passengers inside your plane. AVEMCO limits ALL bodily injury to 100,000 for customers with that limit. And the 1 Mil/100 is usually SO cheap compared to 1 Million Combined Single Limit (slang for this is a “smooth” limit, means no passenger sublimits).

It really depends on your assets you’re trying to protect. I agree that for you it is better to have more than that.

Thanks again for your nice words about Maureen. I will ask her to log on and read your post

Thanks

John “JT” Helms

Branch Manager

I have never met John, but I have insurance through someone in his office, presumably one of his employees.

My experience has been excellent.

One other thing on the subject. I cringe when I hear about $1 million coverage/$100,000 per person. This is almost no liability insurance at all, and leaves the pilot or his/her estate very vulnerable. Nationaire was able to get me $1 million smooth, with additional $2 million supplemental liability coverage. (Last April; 400 hours at the time/instrument rated) All economically. Thinking the unthinkable, go down with two passengers because of a dumb mistake, liability coverage is pretty important to protect your family or successors.

Andy

I have seen much written here regarding insurance lately. I would like to offer some insight for the discussion.

I am the Branch Manager for NationAir Insurance Agency’s Pleasure and Business (Light Aircraft) Office. Cirrus Designs has asked NationAir to help them with their current insurance situation. Cirrus refers anyone with insurance questions or problems to us. We insure many already and of course hope to write many more by providing this service and those described below to you all and Cirrus.

First, I recommend that you all read my article “Aviation Insurance 101” published in the latest (Sept 14) issue of GA News page 26 and InFlight (Aug) page 75. (Same article in both.) It sets the stage for this discussion as it identifies the players for you.

I hear some of you talking about one agent’s quote versus another. The aviation insurance agents you choose to deal with represent the same companies. And switching to another agent (by signing a broker of record (BOR) letter) merely assigns the existing quotes to the new agent. The quote remains the same.

With that being said, let me tell you a little about what NationAir is doing right now for you all and Cirrus:

  1. Educating underwriters (insurance company representatives) about Cirrus aircraft, pilot training, and accidents (i.e. the latest one which appears to be a maintenance failure as opposed to pilot error (i.e. scud running pilots)) with the hopes of calming them down, stabilizing and eventually lowering the rates.
  1. Getting other insurance companies into the market for Cirrus aircraft and keeping them there. Currently not all companies quote Cirrus Aircraft (one stopped writing coverages this summer, one has not yet begun but will, and one just knee-jerked and announced they were going to no longer write SR-22s and we are asking them to review that decision.)

None of this will happen overnight. Right now is an extremely difficult time to get the powers that be at the insurance companies to make rational descisions (or any at all). The are all extremely caught up in the War Risk cancellations/changes/requoting that is going on (mostly affects charter and large corporations that do a lot of overseas travel.) This will pass.

I think it is great that alot of the companies (including Phoenix which is no longer writing Cirrus Aircraft models) are renewing current policies as expiring or even with decreases. This is valiant of them, but honestly sort of makes the new purchase quotes right now look ridiculous.

Please feel free to reply with questions. Or you can contact me at jhelms@nationair.com.

Thank You

John “JT” Helms

Branch Manager

5

I asked my homeowners agent to look at my policy with a $1 mil umbrella, mine said I was covered for any liability. It may be a way to beef up coverage if you don’t have an umbrella policy. But I would check to be sure it is truly an umbrella. Rick

I have never met John, but I have insurance through someone in his office, presumably one of his employees.

My experience has been excellent.

One other thing on the subject. I cringe when I hear about $1 million coverage/$100,000 per person. This is almost no liability insurance at all, and leaves the pilot or his/her estate very vulnerable. Nationaire was able to get me $1 million smooth, with additional $2 million supplemental liability coverage. (Last April; 400 hours at the time/instrument rated) All economically. Thinking the unthinkable, go down with two passengers because of a dumb mistake, liability coverage is pretty important to protect your family or successors.

Andy

I have seen much written here regarding insurance lately. I would like to offer some insight for the discussion.

I am the Branch Manager for NationAir Insurance Agency’s Pleasure and Business (Light Aircraft) Office. Cirrus Designs has asked NationAir to help them with their current insurance situation. Cirrus refers anyone with insurance questions or problems to us. We insure many already and of course hope to write many more by providing this service and those described below to you all and Cirrus.

First, I recommend that you all read my article “Aviation Insurance 101” published in the latest (Sept 14) issue of GA News page 26 and InFlight (Aug) page 75. (Same article in both.) It sets the stage for this discussion as it identifies the players for you.

I hear some of you talking about one agent’s quote versus another. The aviation insurance agents you choose to deal with represent the same companies. And switching to another agent (by signing a broker of record (BOR) letter) merely assigns the existing quotes to the new agent. The quote remains the same.

With that being said, let me tell you a little about what NationAir is doing right now for you all and Cirrus:

  1. Educating underwriters (insurance company representatives) about Cirrus aircraft, pilot training, and accidents (i.e. the latest one which appears to be a maintenance failure as opposed to pilot error (i.e. scud running pilots)) with the hopes of calming them down, stabilizing and eventually lowering the rates.
  1. Getting other insurance companies into the market for Cirrus aircraft and keeping them there. Currently not all companies quote Cirrus Aircraft (one stopped writing coverages this summer, one has not yet begun but will, and one just knee-jerked and announced they were going to no longer write SR-22s and we are asking them to review that decision.)

None of this will happen overnight. Right now is an extremely difficult time to get the powers that be at the insurance companies to make rational descisions (or any at all). The are all extremely caught up in the War Risk cancellations/changes/requoting that is going on (mostly affects charter and large corporations that do a lot of overseas travel.) This will pass.

I think it is great that alot of the companies (including Phoenix which is no longer writing Cirrus Aircraft models) are renewing current policies as expiring or even with decreases. This is valiant of them, but honestly sort of makes the new purchase quotes right now look ridiculous.

Please feel free to reply with questions. Or you can contact me at jhelms@nationair.com.

Thank You

John “JT” Helms

Branch Manager

6

Rick,

What insurance company writes your umbrella policy? Mine (Le Mars Mutual Ins. Co.) only covers “auto, motorized land vehicles or watercraft”.

Randy

I asked my homeowners agent to look at my
policy with a $1 mil umbrella, mine said I was covered for any liability. It may be a way to beef up coverage if you don’t have an umbrella policy. But I would check to be sure it is truly an umbrella. Rick

I have never met John, but I have insurance through someone in his office, presumably one of his employees.

My experience has been excellent.

One other thing on the subject. I cringe when I hear about $1 million coverage/$100,000 per person. This is almost no liability insurance at all, and leaves the pilot or his/her estate very vulnerable. Nationaire was able to get me $1 million smooth, with additional $2 million supplemental liability coverage. (Last April; 400 hours at the time/instrument rated) All economically. Thinking the unthinkable, go down with two passengers because of a dumb mistake, liability coverage is pretty important to protect your family or successors.

Andy

I have seen much written here regarding insurance lately. I would like to offer some insight for the discussion.

I am the Branch Manager for NationAir Insurance Agency’s Pleasure and Business (Light Aircraft) Office. Cirrus Designs has asked NationAir to help them with their current insurance situation. Cirrus refers anyone with insurance questions or problems to us. We insure many already and of course hope to write many more by providing this service and those described below to you all and Cirrus.

First, I recommend that you all read my article “Aviation Insurance 101” published in the latest (Sept 14) issue of GA News page 26 and InFlight (Aug) page 75. (Same article in both.) It sets the stage for this discussion as it identifies the players for you.

I hear some of you talking about one agent’s quote versus another. The aviation insurance agents you choose to deal with represent the same companies. And switching to another agent (by signing a broker of record (BOR) letter) merely assigns the existing quotes to the new agent. The quote remains the same.

With that being said, let me tell you a little about what NationAir is doing right now for you all and Cirrus:

  1. Educating underwriters (insurance company representatives) about Cirrus aircraft, pilot training, and accidents (i.e. the latest one which appears to be a maintenance failure as opposed to pilot error (i.e. scud running pilots)) with the hopes of calming them down, stabilizing and eventually lowering the rates.
  1. Getting other insurance companies into the market for Cirrus aircraft and keeping them there. Currently not all companies quote Cirrus Aircraft (one stopped writing coverages this summer, one has not yet begun but will, and one just knee-jerked and announced they were going to no longer write SR-22s and we are asking them to review that decision.)

None of this will happen overnight. Right now is an extremely difficult time to get the powers that be at the insurance companies to make rational descisions (or any at all). The are all extremely caught up in the War Risk cancellations/changes/requoting that is going on (mostly affects charter and large corporations that do a lot of overseas travel.) This will pass.

I think it is great that alot of the companies (including Phoenix which is no longer writing Cirrus Aircraft models) are renewing current policies as expiring or even with decreases. This is valiant of them, but honestly sort of makes the new purchase quotes right now look ridiculous.

Please feel free to reply with questions. Or you can contact me at jhelms@nationair.com.

Thank You

John “JT” Helms

Branch Manager

7

I asked my homeowners agent to look at my policy with a $1 mil umbrella, mine said I was covered for any liability. It may be a way to beef up coverage if you don’t have an umbrella policy. But I would check to be sure it is truly an umbrella. Rick

Rick,

I would be amazed if your personal umbrella coverage extended to any aviation activities. Why don’t you double check with your agent/company, and if I am wrong, let all of us know what company is willing to extend this coverage under their umbrella.

Many thanks,

Chuck

I have never met John, but I have insurance through someone in his office, presumably one of his employees.

My experience has been excellent.

One other thing on the subject. I cringe when I hear about $1 million coverage/$100,000 per person. This is almost no liability insurance at all, and leaves the pilot or his/her estate very vulnerable. Nationaire was able to get me $1 million smooth, with additional $2 million supplemental liability coverage. (Last April; 400 hours at the time/instrument rated) All economically. Thinking the unthinkable, go down with two passengers because of a dumb mistake, liability coverage is pretty important to protect your family or successors.

Andy

I have seen much written here regarding insurance lately. I would like to offer some insight for the discussion.

I am the Branch Manager for NationAir Insurance Agency’s Pleasure and Business (Light Aircraft) Office. Cirrus Designs has asked NationAir to help them with their current insurance situation. Cirrus refers anyone with insurance questions or problems to us. We insure many already and of course hope to write many more by providing this service and those described below to you all and Cirrus.

First, I recommend that you all read my article “Aviation Insurance 101” published in the latest (Sept 14) issue of GA News page 26 and InFlight (Aug) page 75. (Same article in both.) It sets the stage for this discussion as it identifies the players for you.

I hear some of you talking about one agent’s quote versus another. The aviation insurance agents you choose to deal with represent the same companies. And switching to another agent (by signing a broker of record (BOR) letter) merely assigns the existing quotes to the new agent. The quote remains the same.

With that being said, let me tell you a little about what NationAir is doing right now for you all and Cirrus:

  1. Educating underwriters (insurance company representatives) about Cirrus aircraft, pilot training, and accidents (i.e. the latest one which appears to be a maintenance failure as opposed to pilot error (i.e. scud running pilots)) with the hopes of calming them down, stabilizing and eventually lowering the rates.
  1. Getting other insurance companies into the market for Cirrus aircraft and keeping them there. Currently not all companies quote Cirrus Aircraft (one stopped writing coverages this summer, one has not yet begun but will, and one just knee-jerked and announced they were going to no longer write SR-22s and we are asking them to review that decision.)

None of this will happen overnight. Right now is an extremely difficult time to get the powers that be at the insurance companies to make rational descisions (or any at all). The are all extremely caught up in the War Risk cancellations/changes/requoting that is going on (mostly affects charter and large corporations that do a lot of overseas travel.) This will pass.

I think it is great that alot of the companies (including Phoenix which is no longer writing Cirrus Aircraft models) are renewing current policies as expiring or even with decreases. This is valiant of them, but honestly sort of makes the new purchase quotes right now look ridiculous.

Please feel free to reply with questions. Or you can contact me at jhelms@nationair.com.

Thank You

John “JT” Helms

Branch Manager