When Gerald McMullen of Spokane, Washington, went to renew the insurance on his Bonanza V-35 this year, he was in for a rude surprise.
While there was no increase in the premium, the now 80-year-old pilot would be required to have a “fully qualified Open Pilot Warranty pilot in the right seat for all flights.”
“Really?” he asked. “I’m an accident free pilot with over 8,000 hours IFR.”
His broker was able to shop around and get insurance through another company with no restrictions, but his premium was $600 higher.
“Start shopping early if you are over 80,” he warns other pilots. “Welcome to the ‘golden years.’”
McMullen isn’t the only pilot facing this situation.
According to insurance professionals, it’s common for insurance companies to put additional requirements on pilots over the age of 80, such as requiring a safety pilot, an annual medical, or annual flight review. To avoid these often burdensome requirements, you’ll end up paying more for your insurance.
Remember how insurance works: Thousands upon thousands of people pay premiums into specific categories, spreading the risk for everyone in that category.
“In car insurance, you have millions and millions of people in that category, so the risk is spread out. In our little part of the world, aviation insurance is a small group to begin with and an even smaller group of people over the age of 70 flying their aircraft,” said Teri Miller, vice president of AssuredPartners Aerospace, the Aircraft Owners and Pilots Association’s strategic partner for insurance.
It’s all based on data and statistics that show that the claims experience for older pilots is higher than for younger pilots.
But what if you are an accident-free 80-year-old pilot in great health like McMullen?
That doesn’t matter to the insurance companies.
“That may be true — and it probably is in a lot of cases — but the reality is he still has an 80 year old body and there’s no way for an underwriter to underwrite an individual physically,” said Jon Harden, founder of Aviation Insurance Resources (AIR). “Insurance companies are run by data and statistics and their statistics say the chances of him having an accident or forgetting to put the gear down are a whole lot more when he’s 80 than if he were 55.”
You can call it discriminatory, but it’s no different from an 18 year old who drives a Corvette, Harden notes. He’s going to pay whopping insurance premiums.
“Statistics show he’s going to have an accident and probably a bad one,” Harden said.
A Changing Market
It’s not just age affecting the insurance companies’ decisions. It’s also the current marketplace, according to Harden.
“The insurance market is changing this year and it’s changing considerably,” he said.
But the changes have been coming for a while now, according to both insurance professionals.
Insurance rates have been low for a really long time and, in fact, have declined over the last 10 years. Competition was behind most of that, according to Harden.
But now, even though the accident rates are falling in GA, the costs of repairing aircraft and dealing with losses are increasing.
“The expense of adjusting a loss, attorneys, and the cost of repairs has gone way up,” he said. “There’s also an increased frequency and severity of high liability claims.”
Both insurance pros also point out that it’s not just the aviation world affecting your claims. The recent spate of hurricanes and tornadoes has hit insurance companies hard, so rates go up for everyone, including general aviation.
All of that combines to fuel increases in premiums, usually about 10% to 15%, he said.
“But combined with the rate increases, the insurance companies have also adjusted their underwriting, and that mostly affects older pilots,” Harden noted.
While pilots over 80 have always paid higher premiums, companies now are placing more restrictions on them, like in McMullen’s case.
Harden notes that what type of airplane the older pilot flies makes a difference.
“A second pilot on board probably wouldn’t be required if it’s a Skyhawk, but if it’s a Bonanza or a twin, there are going to be additional requirements,” he said.
There are 16 insurance companies in general aviation and each one has its own underwriting requirements — and those requirements can change with the changing market conditions.
“We’re seeing this every day with our customers,” Harden said. “A company that was not a problem for an airplane owner last year has a new requirement, so we shop all the markets to see what’s available for him and give him options.”
Some Practical Tips to Protect Yourself
What can you do in this new market to protect yourself?
“You’ll just have to let your broker do their job and find you the best solution for your situation,” Harden said. “I’ve had customers decide to downgrade their airplane and go from a twin to a single so they could continue flying without the restrictions that were being imposed.”
Miller offers several other tips:
- Avoid switching insurance companies after the age of 70. A new company may offer you a policy for $100 or $200 less, but a company you have been with for years is more likely to continue insuring you into your 80s and beyond. Many insurance companies won’t even consider a new policy for a pilot over the age of 75 or 80.
- Maintain your proficiency and make sure you can document it. The hours flown in the last 12 months is a good indicator to the insurance company of your risk, according to Miller. The more you fly, the better.
- Get regular training, such as an annual flight review. This shows you are going “above and beyond” to make sure that you are as safe as you can be, Miller added.
I just went through the process of obtaining (renewing insurance, changing aircraft) insurance flying a Beech 35 Bonanza at the age of 86. I have been with the same company for over 20 years. I have never had an accident for which I am the cause. In one instance I restricted an outcome to airplane damage only vice a crash and loss of life. I have hit 2 Canadian Geese at 12,500 Feet Altitude! While parked, my airplane ruddervator was struck by an unknown airplane. I have owned and flown BE-35/BE-33 airplanes and flown a BE-36 since 1966. I have over 7500 hours in these Beech aircraft. Bottom line, the skill and success of an older pilot does not matter to the insurance company. The insurance rate for hull, (physical damage to the airplane) is 6.1617 % of the insured value. I have to have 3 hours dual, a Flight Review and Instrument proficiency check before I am covered by insurance. In accordance with FAA Regs, I am legal to fly the airplane VFR with the Flight Review and IFR with the IPC check. The insurance company requires an instructor pilot, to be covered by insurance, to have 500 hours PIC, 100 hours in like retractable landing gear airplanes, and 25 hours experience in the BE 35 Bonanza. Except for the BPPP instructors with the American Bonanza Society, there are very few local instructors who meet those requirements. This probably is the last year I will be flying, unless I fly without aircraft hull insurance.
There are old pilots, and there are bold pilots.
But, there are no old bold pilots.
Therefore, old pilots are not bold [and being experienced they do not do dumb things (any more)].
Resultantly, their insurance rates should be lower than all others until they [the others] have proved themselves, and you have to be old to do that.
Do the insurance companies understand the Phase completion in the FAA Wings Program? In order to complete a phase, you normally have to fly with an instructor twice a year. That would be more evaluations by an instructor than the typical flight review. Plus you normally have to complete 3 flying ground lessons, which translates to more than an hour orals with an instructor.
You can complete the flying part of a WINGS phase in one day. The three online portions can be done over a year’s time. The completion of the phase gives gives you a Flight Review that often results in your insurance company giving you a discount on your insurance, which aids in paying for the flying part of the WINGS phase.
There are many free instructional seminars and EAA VMC/IMC Clubs (you need not be an EAA member) one can attend for WINGS credit. Having a documented history of attendance does go a long way with the insurance companies, and even the FAA should you have an “event” which would involve them.
Join a local EAA Chapter. It’s a very social group. You might befriend one of the CFI’s who might only charge a lunch for the flight time. The advantage is also finding a CFI who is more inline with your experience level and aircraft, rather than going cold to a flight school instructor who has minimal knowledge of your airplane type.
See www.faasafety.gov for details on the WINGS program. The more you review and the more you fly quality time, the better you’ll be at the flying game and the more the insurance company will like your style.
Janice,
Thanks for writing this article advising us older pilots to be careful what we fly and who we insure with.
I’m in my early 70’s and fly a simple, fixed gear, single engine Cessna so I’m hoping to continue with the insurance co. we’re with.
Do you know if there is any difference if we were to fly an experimental or lightsport ?
Sorry I don’t. I suggest calling Jon Harden, an expert in all things aviation insurance related. His website is air-pros.com
Hello Jim,
As the article indicates, if you stay with the same carrier for the next few years, you’ll likely be able to renew the policy. You can contact CFM Aviation Insurance if you want to talk to someone. They’re based at LGB…562…497…9000 or info@cfmaviation.com