REFLECTOR:More Insurance Woes
Brian Michalk
reflector@tvbf.org
Tue, 6 May 2003 16:30:39 -0500
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I brought up this idea years ago, and still think it's viable.
I have too many irons in the fire right now, but would consider taking this
on after I finish my plane, and get some other personal business matters
cleared up.
The way I see it, it needs to get off to a healthy start, as you mentioned
with "seed money". It might be doable without seed money, but you need a
carrot to get the first people to sign up and get the bank account healthy.
Let's say you opt in for the coop, and we won't do it until we have 20
takers. Charge $5,000 up front, and you can't make a claim for at least a
year. After that, the premiums go down to something like $1000/year, or
whatever. If we make too much money, dividends go to the first takers.
Have someone do the actuarial tables for the bank that we need. Figure
100K max payout, and two, maybe three total payouts per year? Of course
there may be some salvage value.
It would keep everyone honest, and unlike a real company, the money couldn't
be siphoned off to support some other company division that's losing money.
-----Original Message-----
From: reflector-admin@tvbf.org [mailto:reflector-admin@tvbf.org]On Behalf
Of Chuck Jensen
Sent: Tuesday, May 06, 2003 3:56 PM
To: 'reflector@tvbf.org'
Subject: RE: REFLECTOR:More Insurance Woes
All,
The seeming endless inconsistencies and disparities of insurance practices
are not really incongruent when you consider that "they just make up the
rules as they go along." Honest, no kidding. Insurance underwriting and
the weather have one thing in common; they change daily...and usually for
the worse. As Hytec45 mentioned, the insurance companies took a whippin' on
9/11, and now we're the "whippees."
It's so darn complicated, but a Coop for hull insurance that was talked
about in the Newsletter really does make good sense. Hull insurance is a
different animal than liability insurance because hull damage is
quantifiable and estimable, unlike liability which only stops at the limits
of a lawyer's mind.
I'm not going to volunteer to set it up, but a non-profit Coop that
charged 3-5% of the hull value and rebated the excess over the paid-loss
experience (and overhead), could end up providing hull insurance for an
effective 1-2% of the hull value.....which is something we could all live
with. The loss experience on the Velocity since the Factory started their
Checkout and Aircraft inspection program has improved markedly (at least
according to anecdotal comments in the Newsletter).
If someone is brave enough (ne: stupid enough) to want to think about
setting up a Coop, I'd be willing to seriously consider putting in seed
money. I suspect that Velocity would be most helpful in establishing a
"relationship" to the factory for continued aircraft inspection and pilot
checkouts. Given the relatively low cost of repairing Velocities compared
to Kansas Cans after a fender-bender, there is little reason that hull
insurance should be 5% of the value of the plane....when we can even get it.
If I lived in FL close to the Factory, I'd try doing it tomorrow, but I
don't, so I won't, but that doesn't mean it's not a good idea for someone
else that has time on their hands, is organized, knows Velocities and is
hands-on.
Chuck
-----Original Message-----
From: reflector-admin@tvbf.org [mailto:reflector-admin@tvbf.org]On
Behalf Of Andy Millin
Sent: Tuesday, May 06, 2003 3:36 PM
To: reflector@tvbf.org
Subject: RE: REFLECTOR:More Insurance Woes
Bob,
Funny, I JUST renewed my "Aircraft Under Construction" with Avemco. It
was $550/yr.
Andy
-----Original Message-----
From: reflector-admin@tvbf.org [mailto:reflector-admin@tvbf.org]On
Behalf Of Bob Hugel
Sent: Tuesday, May 06, 2003 3:31 PM
To: reflector@tvbf.org
Subject: RE: REFLECTOR:More Insurance Woes
Larry,
I called Avemco on Thursday of last week to ask about Builders
Insurance. They told me that they do not insure Velocity Kits because they
felt that since they do not insure the plane when it is complete it was not
fair to insure the kit. This seems like a recent change on their part.
I was quoted for a $60K replacement cost kit, $600/yr by Falcon on the
same day (I'm instrument rated). Falcon suggested that I call Avemco
because they felt that Avemco could do a better price, but as it turns out,
they will not bother.
Today, I emailed Pam with all the particulars and I'm awaiting a
response on price.
Bob
-----Original Message-----
From: reflector-admin@tvbf.org [mailto:reflector-admin@tvbf.org]On
Behalf Of Milehitaz@aol.com
Sent: Tuesday, May 06, 2003 2:46 PM
To: reflector@tvbf.org
Subject: Re: REFLECTOR:More Insurance Woes
I am using Avemco for builders insurance. It runs me about 450 a
year. Your right, it's very strange that they will offer me the build Ins,
and the cheapest in the biz, but don't want me when it comes time to fly.
Oh well. Best to all,
Larry
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<DIV><FONT color=3D#0000ff face=3DArial size=3D2><SPAN =
class=3D510421721-06052003>I=20
brought up this idea years ago, and still think it's =
viable.</SPAN></FONT></DIV>
<DIV><FONT color=3D#0000ff face=3DArial size=3D2><SPAN=20
class=3D510421721-06052003></SPAN></FONT> </DIV>
<DIV><FONT color=3D#0000ff face=3DArial size=3D2><SPAN =
class=3D510421721-06052003>I have=20
too many irons in the fire right now, but would consider taking this on =
after I=20
finish my plane, and get some other personal business matters cleared=20
up.</SPAN></FONT></DIV>
<DIV><FONT color=3D#0000ff face=3DArial size=3D2><SPAN=20
class=3D510421721-06052003></SPAN></FONT> </DIV>
<DIV><FONT color=3D#0000ff face=3DArial size=3D2><SPAN =
class=3D510421721-06052003>The=20
way I see it, it needs to get off to a healthy start, as you mentioned =
with=20
"seed money". It might be doable without seed money, but you need =
a carrot=20
to get the first people to sign up and get the bank account=20
healthy.</SPAN></FONT></DIV>
<DIV><FONT color=3D#0000ff face=3DArial size=3D2><SPAN=20
class=3D510421721-06052003></SPAN></FONT><FONT color=3D#0000ff =
face=3DArial=20
size=3D2><SPAN class=3D510421721-06052003></SPAN></FONT> </DIV>
<DIV><FONT color=3D#0000ff face=3DArial size=3D2><SPAN =
class=3D510421721-06052003>Let's=20
say you opt in for the coop, and we won't do it until we have 20 =
takers. =20
Charge $5,000 up front, and you can't make a claim for at least a =
year. =20
After that, the premiums go down to something like $1000/year, or=20
whatever. If we make too much money, dividends go to the first=20
takers.</SPAN></FONT></DIV>
<DIV><FONT color=3D#0000ff face=3DArial size=3D2><SPAN=20
class=3D510421721-06052003></SPAN></FONT> </DIV>
<DIV><FONT color=3D#0000ff face=3DArial size=3D2><SPAN =
class=3D510421721-06052003>Have=20
someone do the actuarial tables for the bank that we need. =
Figure=20
100K max payout, and two, maybe three total payouts per year? Of =
course=20
there may be some salvage value.</SPAN></FONT></DIV>
<DIV><FONT color=3D#0000ff face=3DArial size=3D2><SPAN=20
class=3D510421721-06052003></SPAN></FONT> </DIV>
<DIV><FONT color=3D#0000ff face=3DArial size=3D2><SPAN =
class=3D510421721-06052003>It=20
would keep everyone honest, and unlike a real company, the money =
couldn't be=20
siphoned off to support some other company division that's losing=20
money.</SPAN></FONT></DIV>
<BLOCKQUOTE dir=3Dltr=20
style=3D"BORDER-LEFT: #0000ff 2px solid; MARGIN-LEFT: 5px; MARGIN-RIGHT: =
0px; PADDING-LEFT: 5px">
<DIV align=3Dleft class=3DOutlookMessageHeader dir=3Dltr><FONT =
face=3DTahoma=20
size=3D2>-----Original Message-----<BR><B>From:</B> =
reflector-admin@tvbf.org=20
[mailto:reflector-admin@tvbf.org]<B>On Behalf Of </B>Chuck=20
Jensen<BR><B>Sent:</B> Tuesday, May 06, 2003 3:56 PM<BR><B>To:</B>=20
'reflector@tvbf.org'<BR><B>Subject:</B> RE: REFLECTOR:More Insurance=20
Woes<BR><BR></DIV></FONT>
<DIV><SPAN class=3D229340120-06052003><FONT color=3D#0000ff =
face=3DArial=20
size=3D2> All,</FONT></SPAN></DIV>
<DIV><SPAN class=3D229340120-06052003><FONT color=3D#0000ff =
face=3DArial=20
size=3D2></FONT></SPAN> </DIV>
<DIV><SPAN class=3D229340120-06052003><FONT color=3D#0000ff =
face=3DArial size=3D2>The=20
seeming endless inconsistencies and disparities of insurance=20
practices are not really incongruent when you consider that "they =
just=20
make up the rules</FONT></SPAN><SPAN =
class=3D229340120-06052003><FONT=20
color=3D#0000ff face=3DArial size=3D2> as they go along." =
Honest, no=20
kidding. Insurance underwriting and the weather have one thing =
in=20
common; they change daily...and usually for the worse. As =
Hytec45=20
mentioned, the insurance companies took a whippin' on 9/11, and now =
we're the=20
"whippees." </FONT></SPAN></DIV>
<DIV><SPAN class=3D229340120-06052003><FONT color=3D#0000ff =
face=3DArial=20
size=3D2></FONT></SPAN> </DIV>
<DIV><SPAN class=3D229340120-06052003><FONT color=3D#0000ff =
face=3DArial size=3D2>It's=20
so darn complicated, but a Coop for hull insurance that was talked =
about in=20
the Newsletter really does make good sense. Hull insurance is a=20
different animal than liability insurance because hull damage is=20
quantifiable and estimable, unlike liability which only stops at the =
limits of=20
a lawyer's mind. </FONT></SPAN></DIV>
<DIV><SPAN class=3D229340120-06052003><FONT color=3D#0000ff =
face=3DArial=20
size=3D2></FONT></SPAN> </DIV>
<DIV><SPAN class=3D229340120-06052003><FONT color=3D#0000ff =
face=3DArial size=3D2>I'm=20
not going to volunteer to set it up, but a non-profit Coop that =
charged=20
3-5% of the hull value and rebated the excess over the paid-loss =
experience=20
(and overhead), could end up providing hull insurance for an effective =
1-2% of=20
the hull value.....which is something we could all live with. =
The loss=20
experience on the Velocity since the Factory started their Checkout =
and=20
Aircraft inspection program has improved markedly (at least according =
to=20
anecdotal comments in the Newsletter).</FONT></SPAN></DIV>
<DIV><SPAN class=3D229340120-06052003><FONT color=3D#0000ff =
face=3DArial=20
size=3D2></FONT></SPAN> </DIV>
<DIV><SPAN class=3D229340120-06052003><FONT color=3D#0000ff =
face=3DArial size=3D2>If=20
someone is brave enough (ne: stupid enough) to want to think about =
setting up=20
a Coop, I'd be willing to seriously consider putting in seed =
money. I=20
suspect that Velocity would be most helpful in establishing=20
a "relationship" to the factory for continued aircraft inspection =
and=20
pilot checkouts. Given the relatively low cost of repairing =
Velocities=20
compared to Kansas Cans after a fender-bender, there is little reason =
that=20
hull insurance should be 5% of the value of the plane....when we can =
even get=20
it. If I lived in FL close to the Factory, I'd try doing it =
tomorrow,=20
but I don't, so I won't, but that doesn't mean it's not a good idea =
for=20
someone else that has time on their hands, is organized, knows =
Velocities=20
and is hands-on.</FONT></SPAN></DIV>
<DIV><SPAN class=3D229340120-06052003><FONT color=3D#0000ff =
face=3DArial=20
size=3D2></FONT></SPAN> </DIV>
<DIV><SPAN class=3D229340120-06052003><FONT color=3D#0000ff =
face=3DArial=20
size=3D2>Chuck</FONT></SPAN></DIV>
<DIV><SPAN class=3D229340120-06052003><FONT color=3D#0000ff =
face=3DArial=20
size=3D2></FONT></SPAN> </DIV>
<DIV><SPAN class=3D229340120-06052003><FONT color=3D#0000ff =
face=3DArial=20
size=3D2></FONT></SPAN> </DIV>
<BLOCKQUOTE dir=3Dltr style=3D"MARGIN-RIGHT: 0px">
<DIV align=3Dleft class=3DOutlookMessageHeader dir=3Dltr><FONT =
face=3DTahoma=20
size=3D2>-----Original Message-----<BR><B>From:</B> =
reflector-admin@tvbf.org=20
[mailto:reflector-admin@tvbf.org]<B>On Behalf Of </B>Andy=20
Millin<BR><B>Sent:</B> Tuesday, May 06, 2003 3:36 PM<BR><B>To:</B>=20
reflector@tvbf.org<BR><B>Subject:</B> RE: REFLECTOR:More Insurance=20
Woes<BR><BR></FONT></DIV>
<DIV><SPAN class=3D929573419-06052003><FONT color=3D#0000ff =
face=3DArial=20
size=3D2>Bob,</FONT></SPAN></DIV>
<DIV><SPAN class=3D929573419-06052003><FONT color=3D#0000ff =
face=3DArial=20
size=3D2></FONT></SPAN> </DIV>
<DIV><SPAN class=3D929573419-06052003><FONT color=3D#0000ff =
face=3DArial=20
size=3D2>Funny, I JUST renewed my "Aircraft Under Construction" =
with=20
Avemco. It was $550/yr.</FONT></SPAN></DIV>
<DIV><SPAN class=3D929573419-06052003><FONT color=3D#0000ff =
face=3DArial=20
size=3D2></FONT></SPAN> </DIV>
<DIV><SPAN class=3D929573419-06052003><FONT color=3D#0000ff =
face=3DArial=20
size=3D2>Andy</FONT></SPAN></DIV>
<BLOCKQUOTE dir=3Dltr style=3D"MARGIN-RIGHT: 0px">
<DIV align=3Dleft class=3DOutlookMessageHeader dir=3Dltr><FONT =
face=3DTahoma=20
size=3D2>-----Original Message-----<BR><B>From:</B> =
reflector-admin@tvbf.org=20
[mailto:reflector-admin@tvbf.org]<B>On Behalf Of </B>Bob=20
Hugel<BR><B>Sent:</B> Tuesday, May 06, 2003 3:31 PM<BR><B>To:</B>=20
reflector@tvbf.org<BR><B>Subject:</B> RE: REFLECTOR:More Insurance =
Woes<BR><BR></FONT></DIV>
<DIV><FONT color=3D#0000ff face=3DArial size=3D2><SPAN=20
class=3D105402619-06052003>Larry,</SPAN></FONT></DIV>
<DIV><FONT color=3D#0000ff face=3DArial size=3D2><SPAN=20
class=3D105402619-06052003>I called Avemco on Thursday of last =
week to ask=20
about Builders Insurance. They told me that they do not =
insure=20
Velocity Kits because they felt that since they do not insure the =
plane=20
when it is complete it was not fair to insure the kit. This =
seems=20
like a recent change on their part.</SPAN></FONT></DIV>
<DIV><FONT color=3D#0000ff face=3DArial size=3D2><SPAN=20
class=3D105402619-06052003></SPAN></FONT> </DIV>
<DIV><FONT color=3D#0000ff face=3DArial size=3D2><SPAN=20
class=3D105402619-06052003>I was quoted for a $60K replacement =
cost kit,=20
$600/yr by Falcon on the same day (I'm instrument rated). =
Falcon=20
suggested that I call Avemco because they felt that Avemco could =
do a=20
better price, but as it turns out, they will not=20
bother.</SPAN></FONT></DIV>
<DIV><FONT color=3D#0000ff face=3DArial size=3D2><SPAN=20
class=3D105402619-06052003></SPAN></FONT> </DIV>
<DIV><FONT color=3D#0000ff face=3DArial size=3D2><SPAN=20
class=3D105402619-06052003>Today, I emailed Pam with all the =
particulars and=20
I'm awaiting a response on price.</SPAN></FONT></DIV>
<DIV><FONT color=3D#0000ff face=3DArial size=3D2><SPAN=20
class=3D105402619-06052003>Bob</SPAN></FONT></DIV>
<BLOCKQUOTE>
<DIV align=3Dleft class=3DOutlookMessageHeader dir=3Dltr><FONT =
face=3DTahoma=20
size=3D2>-----Original Message-----<BR><B>From:</B>=20
reflector-admin@tvbf.org [mailto:reflector-admin@tvbf.org]<B>On =
Behalf=20
Of </B>Milehitaz@aol.com<BR><B>Sent:</B> Tuesday, May 06, 2003 =
2:46=20
PM<BR><B>To:</B> reflector@tvbf.org<BR><B>Subject:</B> Re:=20
REFLECTOR:More Insurance Woes<BR><BR></FONT></DIV><FONT=20
face=3Darial,helvetica><FONT color=3D#0000ff face=3DTahoma =
lang=3D0 size=3D3=20
FAMILY=3D"SANSSERIF">I am using Avemco for builders insurance. =
It runs me=20
about 450 a year. Your right, it's very strange that they will =
offer me=20
the build Ins, and the cheapest in the biz, but don't want me =
when it=20
comes time to fly. Oh well. Best to all,<BR>Larry</FONT>=20
=
</FONT></BLOCKQUOTE></BLOCKQUOTE></BLOCKQUOTE></BLOCKQUOTE></BODY></HTML>=
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