lml@lancaironline.net Mailing List Archive

<<<<<<<<<<<<<<<<--->>>>>>>>>>>>>>>> << Lancair Builders' Mail List >> <<<<<<<<<<<<<<<<--->>>>>>>>>>>>>>>> Posted for Brent Regan <Brent@regandesigns.com> John writes: <<What can we do? We can work together to present to the insurance industry statistics that justify their underwriting our aircraft. Since the category "high performance homebuilt" has unfavorable statistics, we need to create a subset of that category that we can plausably claim is safer than the average.>> Insurance. Insurance allows a large group of entities to share risk on the concept that the result of the loss of wealth, like the loss of blood, is non linear. Lose a little, no big deal, lose a lot....dead. The larger the group, the lower the average cost per unit. It would seem that, rather than trying to pare the insured group definition to exclude pilots we know are going to be high risk, the reasonable thing to do would be to work to expand the member set to as large as possible (why not all GA pilots are charged the same per dollar of coverage). Insurance companies pray on every pilots belief that they are a lower risk then the next guy and it is in the "safe" pilots best interest to allow the insurance company to charge the other guy a higher premium or exclude them altogether. This allows the insurance company to charge a higher aggregate premium. We should be reminding insurance companies that their job is to spread risk, not focus it. It would be very interesting to take the industry total paid claims to GA and divide it by the total number of active pilots. I suspect that if this number was corrected for policy limits to get a cost per dollar of coverage we would see that this average is lower than the base rate for the "safest group". It can also be argued that there is no reason for the insurance company to offer incentives to make pilots safer. Insurance company income is based on a percentage of the "take". If there is no loss then there are no premiums and no profit. Lots of loss, large premiums and lots of profit. I have always been amused that there is a "Good Hands" insurance company and that a pick pocket is said to have "good hands" if they can get your money without detection. Regards Brent Regan John writes <<What can we do? We can work together to present to the insurance industry statistics that justify their underwriting our aircraft. Since the category "high performance homebuilt" has unfavorable statistics, we need to create a subset of that category that we can plausably claim is safer than the average.>> Insurance. Insurance allows a large group of entities to share risk on the concept that the result of the loss of wealth, like the loss of blood, is non linear. Lose a little, no big deal, lose a lot....dead. The larger the group, the lower the average cost per unit. It would seem that, rather than trying to pare the insured group definition to exclude pilots we know are going to be high risk, the reasonable thing to do would be to work to expand the member set to as large as possible (why not all GA pilots are charged the same per dollar of coverage). Insurance companies pray on every pilots belief that they are a lower risk then the next guy and it is in the "safe" pilots best interest to allow the insurance company to charge the other guy a higher premium or exclude them altogether. This allows the insurance company to charge a higher aggregate premium. We should be reminding insurance companies that their job is to spread risk, not focus it. It would be very interesting to take the industry total paid claims to GA and divide it by the total number of active pilots. I suspect that if this number was corrected for policy limits to get a cost per dollar of coverage we would see that this average is lower than the base rate for the "safest group". It can also be argued that there is no reason for the insurance company to offer incentives to make pilots safer. Insurance company income is based on a percentage of the "take". If there is no loss then there are no premiums and no profit. Lots of loss, large premiums and lots of profit. I have always been amused that there is a "Good Hands" insurance company and that a pick pocket is said to have "good hands" if they can get your money without detection. Regards Brent Regan LML website: http://members.olsusa.com/mkaye/maillist.html LML Builders' Bookstore: http://www.buildersbooks.com/lancair Please remember that purchases from the Builders' Bookstore assist with the management of the LML. Please send your photos and drawings to marvkaye@olsusa.com.