Clear on Top

For the past six years, the aviation insurance marketplace has seen a fairly steady increase in the amount of insurance capacity (insurance companies doing business in the US) and,  as a consequence, a steady decline in premium levels from the record highs of the early 2000’s.  This environment has been good news for the aviation insurance consumer and a fortuitous bright spot amid otherwise difficult economic circumstances. 

From a broker’s standpoint, the premium decline hits the bottom line.  Insurance brokers (yours truly included) are compensated based on a percentage of the premium for each policy – a commission, technically paid by the insurance company, but ultimately paid by the policy holder.  Combined with falling aircraft values, declining payrolls and sales, and fewer new purchases, many insurance agencies have struggled in recent years, if they weren’t prepared to deal with the market conditions.   Like any industry, whenever there are economic struggles, we see the emergence of schisters, cons, and gimmicky sales tactics. 

Overall, the aviation segment of the insurance industry is a delightful place to work.  The niche is small enough that there are still a lot of personal relationships.  It’s difficult for jerks and crooks to survive, simply because the world is so small and everyone seems to at least know of everyone else.  But every once in a while, our clients cross paths with a “deal” that is too good to be true.  Some of them fall for the gimmick.  Others share their experiences with us. 

Lately we’ve seen a number of aviation insurance brokers begin some aggressive sales efforts.  They write letters and send emails to hundreds of random airplane owners that make it sound like the broker has discovered some new deal in aviation insurance that only they have access to.  “Just sign this form and I’ll be able to get you the deal of a lifetime from brand new company XYZ,” they say.  What they don’t say is that the form they have you sign fires your current agent and hires the slick salesman as your new representative. 

Do you really want a slick salesman as your insurance and risk advisor?  Are they giving you any real advise, or just providing you an insurance quote?  How will they handle the liability ramifications on the new hangar contract or dry lease partnership?  What’s their strategy for dealing with your pilot training plan?  Are they even appointed to work with the most important insurance markets or licensed to do business in your state? 

I’m all for changing insurance representation, if there’s a logical reason to do so.  Heck – that’s how I make my living, too.  But watch out for  lizards and cavemen promising to “save you 13% or more” based on some new deal that you’ve never heard of.  The handful of good, strong aviation insurance brokers throughout the country are already up to speed on all the latest changes in the industry and will have a strategy in place for you, based on your operation and your particular needs.