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From: Dan O'Brien <limadelta@gmail.com>
Reply-To: Dan O'Brien <limadelta@gmail.com>
X-Original-To: Lancair Mailing List <lml@lancaironline.net>
Subject: Re: [LML] Re: Insurance
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...Yes, gentlemen I DO NOT HAVE AN UNLIMITED INSURANCE BUDGET...


Guys,

Before going apoplectic about insurance for this class of airplanes,
consider that the average driver pays over $700 per year on auto insurance
in the U.S. Suppose that this amount is for a $30,000 car. Let's make the
premium $600 to make the math simple. The premium would then be 2% of the
value of the car. This probably understates the premium as a percentage of
value, because the average car isn't woth $30K.

Now note that your airplane is worth roughly 10 times your car, at least as
an order of magnitude. Is it surprising that the premium is about 10 times
the premium paid for your car? If the probability of an accident when you
step in your plane is 7 times higher than when you step in your car (I once
heard a number in this range), but if you step in your car every day and
your plane once a week, then these balance out. Then if damage is roughly
proportional to the value of the asseet, rates should differ in proportion
to value. They do, don't they?

This makes me think that the rates Lancair has negotiated is about as good
as we can expect. (I realize that this is a gross simplification, but the
point is that it isn't hard to argue that the rates aren't far off from
where we'd expect them to be :)

Yes, gentlemen I DO NOT HAVE AN UNLIMITED INSURANCE BUDGET.
>
>

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<div><div>...Yes, gentlemen I DO NOT HAVE AN UNLIMITED INSURANCE BUDGET...<=
font color=3D"#000000" face=3D"Arial" size=3D"2"><br>
</font><br>
<br>
Guys,<br>
<br>
Before going apoplectic about insurance for this class of airplanes,
consider that the average driver pays over $700 per year on auto
insurance in the U.S.&nbsp; Suppose that this amount is for a $30,000
car.&nbsp; Let's make the premium $600 to make the math simple.&nbsp;
The premium would then be 2% of the value of the car.&nbsp; This
probably understates the premium as a percentage of value, because the
average car isn't woth $30K. <br>
<br>
Now note that your airplane is worth roughly 10 times your car, at
least as an order of magnitude.&nbsp; Is it surprising that the premium
is about 10 times the premium paid for your car?&nbsp; If the
probability of an accident when you step in your plane is 7 times
higher than when you step in your car (I once heard a number in this
range), but if you step in your car every day and your plane once a
week, then these balance out.&nbsp; Then if damage is roughly
proportional to the value of the asseet, rates should differ in
proportion to value.&nbsp; They do, don't they?<br>
<br>
This makes me think that the rates Lancair has negotiated is about as
good as we can expect.&nbsp; (I realize that this is a gross
simplification, but the point is that it isn't hard to argue that the
rates aren't far off from where we'd expect them to be :)<br>
</div><br><blockquote class=3D"gmail_quote" style=3D"border-left: 1px solid=
 rgb(204, 204, 204); margin: 0pt 0pt 0pt 0.8ex; padding-left: 1ex;"><font c=
olor=3D"#000000" face=3D"Arial" size=3D"2"><div>Yes, gentlemen I DO NOT HAV=
E AN UNLIMITED INSURANCE BUDGET.
</div><br>
</font></blockquote></div><br>

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