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How The System Works

By Bob Mackey, Vice President, Falcon Insurance Agency, Inc.

This week Iíd like to share with you a (hopefully) simple explanation of the different roles played by insurance agents and insurance companies in an attempt to give some insight into how the aviation insurance system works.

As an insurance agent, itís my job to make sure I understand the customerís needs, that they always get the right insurance at the best possible price, and provide advice and counsel when they have questions about their insurance.

Insurance companies provide the products (insurance policies) and endorsements; underwrite individual risks, (review information provided by the agent); and set the price and requirements.

There are currently nine insurance companies that offer some type of aviation insurance, eight of which that offer aircraft insurance. Falcon Insurance Agency works with all of them for the customers we serve.

One of an agentís most important jobs is collect as much pertinent information as possible regarding the customer, their airplane, and the type of flying they do. The more information the agent obtains and provides to the insurance company, the better the price and terms the agent will get for his customer. If the agent does a poor job of gathering information, itís more difficult to get a good price.

Itís also extremely important for the agent to know the aviation insurance market. Aviation insurance companies have become very specialized; different insurance companies choose to insure certain risks and choose not to insure others. For example, the agent needs to know which insurance companies will offer insurance for homebuilts. Not all companies do. There are four or five companies that offer insurance for homebuilts and, like homebuilts, each case is unique.

On the other hand, if the aircraft is a Cessna 172, the list of insurance companies willing to offer insurance is larger. But the agent still needs to know which insurance companies will offer the best policy and the best price. Since the landscape is always changing, the agent needs to stay engaged with the insurance companies to learn about price adjustments and/or new products.

The aviation insurance business is about knowledge and reputation. If you work at staying knowledgeable about what the insurance companies are looking for and you strive do a thorough job for your customers while providing the insurance companies with complete details, youíll build a positive reputation with the insurance companies, and your customers benefit by getting the right insurance at the best price.

EAA INSURANCE TIPS is a special EAA Member benefit. If you have an insurance related topic youíd like to see addressed or if you have any comments, please email Bob Mackey. If you need an insurance quotation call 866-647-4EAA (4322) or submit the online quote request form.

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