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Date: Thu, 23 Sep 2004 13:19:13 -0400
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From: "Robert M. Simon" <lancair@ustek.com>
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Subject: [LOLL] Re: What would you expect your insurance co to do ???]]
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Some notes from SkySmith, my favorite AvInsurance broker, on what NOT to 
do during an engine failure (i.e. land gear-up to get the engine paid 
for): 


Let me apologize for the length of this reply but it doesn't work that 
way and can cause a lot of problems for the pilot/insured who tries it. 


Let's put this in another perspective......if your car is burning a lot 
of oil, would you target a telephone pole at a high speed (risking a lot 
of damage) just so the insurance company would rebuild the engine?  As a 
person that has rebuilt wrecked cars for fun, I can tell you a "pole 
kit' was an easy fix.  Although, the associated head and facial injuries 
from the windshield and airbag are not.


An insurance company only has to pay for returning the aircraft to the 
condition it was, prior to the accident (or claim).  ALL aviation 
insurance policies are good at describing what they will and won't 
cover.  Getting new upgrades and improvement from a claim is usually 
called "betterment", and that is something that insurance companies 
don't do.  They are happy to put it back in a condition similar to what 
it was prior to the accident.   I think it is quite naive to think that 
aviation insurance underwriters and claims investigators have not seen 
this type of "logic" before.   


Anyway, I had a customer that had an aircraft with a run out engine 
(past TBO) when the nose gear collapsed.  The collapse caused a prop 
strike that required the engine to be inspected.  Yes, the insurance 
company paid for the tear down and inspection, but they did not pay for 
the replacement engine (since TBO).  The mechanic, in this case, would 
not put the engine back together as a run out (past TBO) engine and the 
owner opted to rebuild. The rebuild was cheaper than normal because the 
insurance company paid for the teardown and reassembly.


Maybe a better example...I had a twin engine customer that had one of 
his two engines go bad during flight.  He landed short of the airport in 
gear up situation. (sounds like what is being recommended?).  There was 
no damage to the bad engine because it had quit running prior to the 
gear up.  The insurance company paid for the damage caused by the gear 
up and off airport landing.  But since the engine failed due to a 
mechanical break down, it was not covered.  Any damage to the wind 
milling prop would be covered (it was caused by the accident) but not to 
the failure of the engine.


Another way to think of this, if he would have landed and taxied to the 
hanger with one bad engine, would insurance have paid for the engine 
repair? No, insurance companies do not pay for wear and tear or 
mechanical failures.

 
If there was damage to the engine from the prop strike, that would be 
covered by the insurance.  But if it was already worn, broken or 
damaged prior to the prop strike, they would not have to pay for those 
repairs.  Again, don't think that the claims people haven't seen it 
all.  They use forensic labs and elaborate test facilities, if needed, 
to establish a cause of failure.  There is no way that an engine that 
drops a valve or blows a hole in a piston is going to be covered up by a 
prop strike on a gear up landing.

 
Additionally, from the Lancair, Glasair or even Cirrus aircraft 
perspective, damage history is not something I would want on my 
aircraft.  My background is from the FBO and aircraft sales and I will 
accept a metal or tube and fabric  aircraft with damage history if the 
repairs have been completed correctly.  I will take the damage into 
account  and I will pay a price for an aircraft based on the history.   
Composite?  I am not sure I would want  any damage history to a 
composite aircraft I am considering buying or brokering. (And I worked 
in a fiberglass factory for years!)


I also do not think the market (general aviation buyers) will 
consider damage history on a composite the same as on a Piper or 
Cessna.  Gearing up an aircraft and having the risk of damage (however 
minor) on the aircraft is not worth the cost of the engine, in my opinion.

 
My experiences from people that have made or attempted to make gear up 
landings, (most try their best to do everything correctly), often end up 
with more damage to the aircraft then expected.  Often it slides off the 
runway and cartwheels, catches a crack in the cement and breaks in half 
or hits a rut in the grass and tears the wings off.  And that's just a 
few of the recent ones.  I can not imagine that an engine rebuild is 
worth the risk of major damage to the aircraft or the risk of injuring 
your passengers or yourself.

 
Besides the associated costs and record of damage, a gear up could 
potentially keep the aircraft in a repair shop for months and months and 
the owner would still be paying the associated costs yet not be able to 
use the aircraft.  An insurance company might opt for a repair shop, not 
an owner repair and that would increase the down time even more.  Plus, 
maybe the owner will not want the aircraft back after the botched gear 
up...but because of the insured value and the type of damage, it is 
rebuilt over the next year and returned to the owner. 


Sorry for the ramble.  In summary, it is not worth the risk to gear up 
an aircraft with the hope that the insurance company will pay the cost 
of an engine failure.  Remember, every aviation application asks about 
any history of loses or claims and the gear up will follow the pilot and 
the owner of the policy forever.  Also, the NTSB and FAA will 
investigate a gear up with the risk of certificate action.  I know there 
are probably people that won't agree with me, but there is way too much 
at stake compared to the cost of an engine.  I would not doubt 
that there are cases that people have done what you are mentioning, but 
it is a basis for insurance fraud and it could cause more problems than 
the engine failure.   Hope that helps.
 

Scott Sky Smith
 
   
    Subject: 	[LML] Re: What would you expect your insurance co to do ???
    Date: 	Wed, 22 Sep 2004 00:42:18 -0400
    From: 	Barry Hancock <radialpower@cox.net>
    Reply-To: 	Lancair Mailing List <lml@lancaironline.net>
    To: 	Lancair Mailing List <lml@lancaironline.net>


My insurance guy says when you have an engine failure to go in gear up 
if  you want the engine covered.   Silly, but that's the way it 
works...  I guess it depends on the company, too.