Airplane Insurance: It's a Buyer's Market
By Bob Mackey
EAA Aircraft Insurance Plan
December 1, 2011 — When you hear people say, “It’s a buyer’s market,” you’d figure they’re talking real estate or cars. What if I told you it’s a buyer’s market and airplane insurance is where you’ll find the bargains? You’d probably say I’m nuts - certainly not the first time I’ve ever heard that - but I am here to tell you it’s a buyer’s market for airplane insurance!
Think back to Econ 101, when the professor put a chart up on the board with the two lines, one for supply and the other for demand. According to the chart, when supply exceeds demand, the price of the product goes down. Conversely, when demand exceeds supply, the price goes up. That’s exactly what has happened in the aircraft insurance industry for the past several years.
Over the past 10 years, the number of insurance companies offering aircraft insurance has grown three-fold. At the same time, the number of airplanes needing insurance has stayed relatively flat and competition has driven down the price of the insurance. The softness of the aviation insurance market has not been absolute. There are still some airplanes that are difficult or more expensive to insure. Nonetheless, it is still a classic buyer’s market.
So, what’s my recommendation? Well, first make sure you are dealing with an insurance agency that understands the type of airplane you own and the type of flying you do. Second, talk to other aircraft owners you know and find out who they deal with and whether they think you should check with their agent. (EAA chapters are great place to do this.) Pare your list of agents down to only two - maybe your current agent and one other - or if you choose just work with your current agent if you’re satisfied.
Next, make sure your agent knows you know the airplane insurance market is soft and you are looking to save money. And yes, I do recommend if you aren’t insured through the EAA Aircraft Insurance Plan administrated by Falcon Insurance Agency, you should go online to www.eaainsurance.org to submit a quote request, or call 866-647-4322. Who knows? You could gain substantial savings, and then you can perhaps use the extra cash for few hours of brush-up dual with a CFI!
When you insure your airplane through the EAA Aircraft Insurance Plan you’re helping support EAA Member Safety and Youth Education programs. And if you would like to share any stories, ideas, comments, or suggestions with Bob, send him an e-mail.
Read about more insurance topics here.