Comparing Insurance Companies

When comparing aviation insurance policies, is it enough to look only at price and quoted coverage limits?

The answer may surprise you: No. Aviation insurance policies are not one-size-fits-all, and unlike auto or homeowners insurance, they do not rely on standardized policy forms.

That distinction matters more than many aircraft owners realize. The limits shown on a quote apply only when coverage is confirmed under the policy. In other words, the loss or accident must qualify as a covered loss.

POLICY DEFINITIONS MATTER

Policy terms are typically defined within the policy itself, and those definitions can vary significantly from one company to another.

Even a seemingly simple term like “aircraft” may be defined differently across policies. Does it include handheld radios and headsets? Depending on the policy, the answer could range from no coverage to a limited amount of coverage to full coverage.

The same is true for a newly acquired or replacement aircraft. Does the policy include it? If so, what qualifies as newly acquired or replacement aircraft under that specific policy?

Each company prices its policies based on the losses it is willing to cover under the terms of its policy.

QUESTIONS TO ASK WHEN COMPARING INSURANCE COMPANIES

Here are a few other factors to consider when comparing aviation insurance companies:

How easy is it to do business with the company? If it is difficult to reach someone for a quote, a policy change, or a payment question, will that process feel any easier when you need help at claim time?

If you use an agent or broker, are they keeping you with the same insurance company year after year, or are they moving you to a different company for better terms? If they do switch you, do you understand how the new policy differs from the old one?

Open pilot clauses, for example, can vary widely from company to company. A friend you see a few times a year and allow to fly your aircraft might meet your current policy’s open pilot clause, but would they meet the new one?

Is your policy issued by one company or by a group of companies? It may not seem important at first, but if several companies share a policy, each company is responsible only for its percentage of the loss.

If one company is unable to pay, the others may not be required to cover that portion.

WHY FINANCIAL STRENGTH MATTERS

How financially stable is the company? An aircraft damage claim is often paid within a relatively short time frame, but serious injury claims can take years before a lawsuit is filed and even longer before it is resolved.

Will the company continue paying defense costs, and will it be able to pay the final settlement when the time comes? 

Remember, you are paying a premium today in exchange for a promise to pay a covered loss in the future.

REPUTATION AND COMMUNITY SUPPORT

What is the company’s reputation? What are other pilots and customers saying about its service and, more importantly, how it handles claims?

Does the company support the general aviation community? Does it sponsor events, safety programs, or training initiatives that help pilots stay informed and engaged? These are questions we should be asking to make a more informed decision when choosing an insurance company.

When comparing aviation insurance companies, make sure you're comparing more than just price. Review the policy wording, ask questions about claims handling and financial strength, and understand exactly what protection you're buying.

Insurance is a promise, so compare the company and policy, not simply the premium.

Kim Skipper has been with Avemco Insurance Company since 1987. Kim earned her Chartered Property Casualty Underwriter (CPCU) designation - the industry’s highest achievement - in 2002. She has been diligent and instrumental in educating customers and callers about general aviation insurance, as well as managing and training the team of aviation underwriters at Avemco. Kim also holds a property/casualty insurance license in all 50 states. She says, “I love the fact that my experience combined with being a direct underwriter allows me to deliver immediate answers to the customers.” In her free time, Kim enjoys crocheting, spending time with her family, and is an avid Baltimore Ravens fan.