As deliveries of very light jets (VLJs) begin, concerns that they might be difficult to insure have almost evaporated. Manufacturers have had the chance to brief underwriters in depth about their models’ designs, performance characteristics and systems.
Financing, Insurance and Taxes » Aviation Insurance
Issues regarding aviation insurance.
Jet Aviation, the aviation services company founded in Switzerland in 1967, was recently singled out for a prestigious safety award by its insurer, AIG Aviation of Atlanta. The company’s European aircraft management and charter divisions received AIG’s Operational Excellence Award for 2003.
Business aircraft and large charter operators may start seeing reduced insurance premium rates within the next few months, if they haven’t already. According to various brokers, insurance premiums for certain segments of the business aircraft and charter market have fallen by 25 percent or more in the past six to 12 months.
New European Union minimum liability insurance standards that took effect April 30 are causing some U.S.-based operators to rethink their trips to Europe.
Beyond the merriment that the very light jet is coming to market, the insurance industry is preparing to drop the curtain in the final act.
Pulling into position for takeoff or passing the final approach fix for landing, especially at a mountain airport, presents many challenges. The accident history of corporate jets indicates an apparent lack of preparation for contingencies, such as engine failure on takeoff, mountain wave turbulence, extreme cold temperature errors in altimeters, technology glitches, changes in IFR clearance and so on.
Former insurance competitors Aero Insurance and AirSure have merged to form what officials say is now the “largest general aviation insurance broker in the world.”
1. Don’t overinsure or underinsure your aircraft. Hull insurance policies are stated-value policies. In case of a total loss the insurance company pays the stated value of the policy. Be sure to know your aircraft’s true replacement cost and insure the aircraft for that amount. Overinsuring your aircraft results in higher premiums; underinsuring means you’ll need to pony up extra money to replace that aircraft if it’s lost.
After being forced into retirement at age 60, some former airline pilots turn to corporate aviation to continue their flying careers. It can become a problem for operators to obtain hull and liability coverage when these older corporate pilots reach age 70.
Various aviation insurance professionals seem to agree that the overall market has stabilized with premiums still significantly higher than pre-9/11 levels but with decreases in various segments. Some brokers have reported decreases in premiums as high as 25 percent, but those have turned out to be unusual cases. For those bizav operators who have seen decreases, the average reduction has been 5 to 10 percent.