Reducing Insurance Coverage/Premiums for Private Aircraft

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Ahola88
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Reducing Insurance Coverage/Premiums for Private Aircraft

Post by Ahola88 »

Hello All,

A partner and myself own a Cessna 172 that is on floats basically all of the time. This fall we decided to bring it in our private hangar to complete some extensive maintenance and since it will be grounded for the unforeseeable future we called our insurance provider to see if they would reduce our coverage to reflect this. This is the first time we have made this request and after much back and forth and a few arguments the official response was "we can reduce your coverage, but the premium will remain the same".

So i am wondering if any of the private folk's insurance provider will let them reduce the coverage for cases like this? Or even the planes on floats that don't get changed over in the winter months and don't fly from November-April?

Thanks in advance for any responses.
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ahramin
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Re: Reducing Insurance Coverage/Premiums for Private Aircraft

Post by ahramin »

This is a common request. Of the 3 or 4 aviation insurance underwriters in Canada, none of them will refund you anything for cancelling early unless the aircraft is sold. Similarly, none of them will refund anything for changing the undercarriage or doing anything that would reduce the cost during the period.

You can basically forget about it and move on, they have your money and you aren't getting any of it back.
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Inverted2
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Re: Reducing Insurance Coverage/Premiums for Private Aircraft

Post by Inverted2 »

Same thing with motorcycles, snowmobiles, classic cars etc. Gotta pay the full year for something that doesn’t get used all year. I ditched my in-motion hull insurance years ago and now pay about $450/year for basic liability and hull not in motion. I figure I save over $1000 bucks a year.
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photofly
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Re: Reducing Insurance Coverage/Premiums for Private Aircraft

Post by photofly »

ahramin wrote: Mon Nov 23, 2020 7:16 pm This is a common request. Of the 3 or 4 aviation insurance underwriters in Canada, none of them will refund you anything for cancelling early unless the aircraft is sold
That’s not my experience. Every policy I have taken out has come with a refund schedule. It’s not pro-rata, but I got a considerable refund cancelling a policy mid-term. The aircraft was not sold.
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New Antique Pilot
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Re: Reducing Insurance Coverage/Premiums for Private Aircraft

Post by New Antique Pilot »

ahramin wrote: Mon Nov 23, 2020 7:16 pm This is a common request. Of the 3 or 4 aviation insurance underwriters in Canada, none of them will refund you anything for cancelling early unless the aircraft is sold. Similarly, none of them will refund anything for changing the undercarriage or doing anything that would reduce the cost during the period.

You can basically forget about it and move on, they have your money and you aren't getting any of it back.
A friend has his floatplane parked for the winter of course. He claims that his insurance company is giving him a layup credit to next years policy. He has to send them a copy of the last page in the logbook.

NAP
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unrestrcitedvisual
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Re: Reducing Insurance Coverage/Premiums for Private Aircraft

Post by unrestrcitedvisual »

New Antique Pilot wrote: Mon Nov 23, 2020 9:10 pm
ahramin wrote: Mon Nov 23, 2020 7:16 pm This is a common request. Of the 3 or 4 aviation insurance underwriters in Canada, none of them will refund you anything for cancelling early unless the aircraft is sold. Similarly, none of them will refund anything for changing the undercarriage or doing anything that would reduce the cost during the period.

You can basically forget about it and move on, they have your money and you aren't getting any of it back.
A friend has his floatplane parked for the winter of course. He claims that his insurance company is giving him a layup credit to next years policy. He has to send them a copy of the last page in the logbook.

NAP
This is exactly correct. Super common in the helicopter world for machines that sit for extended periods of time over the winter months. Send in a few logbook pages showing your aircraft wasn’t flow and then youre put on layup insurance. Saved a few guys I know big bucks $$
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ahramin
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Re: Reducing Insurance Coverage/Premiums for Private Aircraft

Post by ahramin »

Well hell, thanks everyone. I just checked all my insurance policies and the Marsh one does indeed offer a return for cancellations. Insurance can be cancelled at any time for any reason.

All the others ones I looked at state that the entire premium - amazing that insurance companies call their bills a "premium" isn't it? - is minimum retained unless aircraft is sold. I guess you really need to look at who is insuring you.

Aloha88, who are you insured with? You should go through the policy and look for a cancellation clause. If it's there, go back to the broker and tell them that unless they get you a credit for next year you are going to cancel the policy. I wouldn't actually cancel it unless you have another option for insurance though, you don't want to get orphaned.
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photofly
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Re: Reducing Insurance Coverage/Premiums for Private Aircraft

Post by photofly »

If you ask for a layup credit, does the not-in-motion coverage continue? If the hangar collapses under the snow load and destroys the airframe...
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DId you hear the one about the jurisprudence fetishist? He got off on a technicality.
Ahola88
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Re: Reducing Insurance Coverage/Premiums for Private Aircraft

Post by Ahola88 »

Thanks for all the replies everyone. We're insured with Global and our broker is Air1. I've went through our policy and in my opinion it is pretty cut and clear on the cancellation policy. It reads as follows:

"You may cancel or reduce the Coverages of this Policy by sending us an advance notice in writing stating the date of cancellation or reduction and, in such case, the Policy cancellation or coverage reduction will take effect at 12:01 a.m., at your address as shown on the Policy Data Page, on the date of cancellation or reduction. If you cancel this Policy or reduce coverages, you will be entitled to a return of part of your premium, based on the unused number of days of coverage on the short-rate basis shown in the Short Rate Table of this Policy. If one or more of your aircraft has been subject of a loss exceeding the premium paid for the aircraft, you will not be entitled to any return premium for such aircraft."

This is what developed the first argument with our broker, they said the only way we can cancel is if the aircraft is sold and we'd have to produce a bill of sale. We then went around the broker to the insurance provider for who seemed receptive on the phone but then went through the broker for the answer and they gave the response of "you can reduce your coverage, but there wont be a reduction in premium".

We understand that if we reduce the coverage and our hangar collapses we aren't insured, and we're willing to accept that risk. We also didn't want to cancel and then start looking for another provider when they plane is flying again, but with the above experience that may be the only option.
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Re: Reducing Insurance Coverage/Premiums for Private Aircraft

Post by AirFrame »

Never tried to cancel aircraft insurance, but the cheapest way to insure a motorcycle for 8 months in BC is to insure it for 12 months and cancel after 8 months. You get 4 months worth back. This is the only option when the weather allows 8 months of riding and ICBC only offers the option of insuring for 6 months or 1 year.

@Ahola88, if you've copied the wording exactly from your policy, then your broker is blowing smoke up your *ss. There's nothing in that paragraph that says your premium won't be returned, in fact it explicitly states that it *will* be returned if you elect to cancel your insurance early, in writing. And there's nothing that says you have to sell the plane to do it.
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Ahola88
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Re: Reducing Insurance Coverage/Premiums for Private Aircraft

Post by Ahola88 »

ahramin wrote: Mon Nov 23, 2020 10:38 pm
Aloha88, who are you insured with? You should go through the policy and look for a cancellation clause. If it's there, go back to the broker and tell them that unless they get you a credit for next year you are going to cancel the policy. I wouldn't actually cancel it unless you have another option for insurance though, you don't want to get orphaned.
This is currently my biggest concern. I would cancel now and then shop when needed but i don't want to be stuck without. Would the ones who responded be willing to share their provider that does reduce the coverage at times when the plane isn't flying. Be it maintenance, float planes in winter, etc. Feel free to PM if you're more comfortable with that.

Thanks
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New Antique Pilot
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Re: Reducing Insurance Coverage/Premiums for Private Aircraft

Post by New Antique Pilot »

photofly wrote: Tue Nov 24, 2020 5:17 am If you ask for a layup credit, does the not-in-motion coverage continue? If the hangar collapses under the snow load and destroys the airframe...
I believe you will still have not-in-motion insurance while the aircraft is parked. You would send the last few pages of your logbook to the insurance company when you renew the policy assuming it is next year when float season starts. Then you get the layup credit.

NAP
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JasonE
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Re: Reducing Insurance Coverage/Premiums for Private Aircraft

Post by JasonE »

My Cherokee was insured with Magnes. It was straight forward when I cancelled, no questions. Refund was processed as per the agreement.
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CruiserNU
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Re: Reducing Insurance Coverage/Premiums for Private Aircraft

Post by CruiserNU »

(This is the response I got today from my broker (Nacora). The insurance is EAA's C-Plan.)

The insurance companies advise that their rating models are built with the understanding that there is significant downtime in the colder months in Canada and little to know (sic) flying is done during these periods.

So their rates already take seasonal use into consideration so they don’t need to be amending coverage multiple times a year on almost all their private aircraft policies.

They would need to issue a return premium and endorsement for the reduction of coverage and then another endorsement and invoice for additional premium for reverting back to full coverage.

The amount of admin work to do this on multiple accounts every year would be overwhelming so they built the rating with this in mind.

There was one market that used to offer a Seasonal Endorsement where the coverage automatically reduced to Ground Risks Only from November 1 to May 1 and they would provide approximately a 15% credit on the premium.

Unfortunately they do not offer this anymore.

Sometimes if the aircraft was being grounded for unusual circumstances, like an extended overhaul, the insurance companies have agreed to reducing coverage midterm.

Hope this helps,

Let me know if you have any questions,
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DHC2eater
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Re: Reducing Insurance Coverage/Premiums for Private Aircraft

Post by DHC2eater »

I have coverage with Magnes through COPA..... there rates were comparable to the rest and they offer layup.....all you do Is phone and ask for the layup to begin then phone again to reinstate the motion insurance.... liability and not in motion coverage continue and are in effect!

Quite simple really..... until you make a claim then I’m sure the fight is on!!😂

Eater
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Ahola88
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Re: Reducing Insurance Coverage/Premiums for Private Aircraft

Post by Ahola88 »

CruiserNU wrote: Wed Nov 25, 2020 7:59 am (This is the response I got today from my broker (Nacora). The insurance is EAA's C-Plan.)

The insurance companies advise that their rating models are built with the understanding that there is significant downtime in the colder months in Canada and little to know (sic) flying is done during these periods.

So their rates already take seasonal use into consideration so they don’t need to be amending coverage multiple times a year on almost all their private aircraft policies.

They would need to issue a return premium and endorsement for the reduction of coverage and then another endorsement and invoice for additional premium for reverting back to full coverage.

The amount of admin work to do this on multiple accounts every year would be overwhelming so they built the rating with this in mind.

There was one market that used to offer a Seasonal Endorsement where the coverage automatically reduced to Ground Risks Only from November 1 to May 1 and they would provide approximately a 15% credit on the premium.

Unfortunately they do not offer this anymore.

Sometimes if the aircraft was being grounded for unusual circumstances, like an extended overhaul, the insurance companies have agreed to reducing coverage midterm.

Hope this helps,

Let me know if you have any questions,
I received a response similar to this one when I first inquired, but it contradicts the way the policy terms are written so I didn't want to let it go.

Thanks everyone for their responses, they've been very helpful.
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CruiserNU
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Re: Reducing Insurance Coverage/Premiums for Private Aircraft

Post by CruiserNU »

DHC2eater wrote: Wed Nov 25, 2020 3:16 pm I have coverage with Magnes through COPA..... there rates were comparable to the rest and they offer layup.....all you do Is phone and ask for the layup to begin then phone again to reinstate the motion insurance.... liability and not in motion coverage continue and are in effect!

Quite simple really..... until you make a claim then I’m sure the fight is on!!😂

Eater
Thanks for that info. I'm wondering what dollar amount you'd save if the layup was, say, four months?
I may decide to switch insurers next year if it's worthwhile.
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ahramin
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Re: Reducing Insurance Coverage/Premiums for Private Aircraft

Post by ahramin »

CruiserNU wrote: Wed Nov 25, 2020 8:38 pmThanks for that info. I'm wondering what dollar amount you'd save if the layup was, say, four months?
I may decide to switch insurers next year if it's worthwhile.
Just guessing here but my Short Rate table shows a 20% refund for cancellation after 8 months. Not in motion hull is very roughly 50% of total so maybe around 10% refund or credit for 4 month layup.
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DHC2eater
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Re: Reducing Insurance Coverage/Premiums for Private Aircraft

Post by DHC2eater »

It depends on the amount you are insured for but without looking through my files......my full coverage premium is a little under 3G and I received about $75 per month back when layed up......

Eater
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