Message-ID: <3C178C7E.1010404@regandesigns.com>
Date: Wed, 12 Dec 2001 10:57:34 -0600
From: Brent Regan <Brent@regandesigns.com>
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To: Lancair List <lancair.list@olsusa.com>
Subject: Re: Lancair Association - Insurance
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I would like to thank Dave Riggs for putting in the effort and research 
on an insurance association. My first reaction was that it sounded like 
a good idea but after some consideration I would decline from 
participating as I do not believe that, in my case at least, there would 
be a net savings. IMHO Dave's assumption about non recurring and 
recurring costs, read "dues", being nominal is a little naive. The costs 
in time alone to run the simplest of associations is considerable (right 
Marv?).

The insurance companies "generous" offer of a 10-15% discount has 
nothing to do with the training and everything to do with the fact if 
you have 100 pilots as a group then the "average" pilot in that group is 
closer to their actuary tables' average pilot.

I am not convinced that Dave Morss' point that insurance to non members 
would be non available is valid, but it certainly is a risk.

I am also unconvinced that the assumption that more training necessarily 
makes a safer pilot is true. If this were true then new pilots would 
have the highest accident rate followed by a STEADY decline in that 
rate. This is not the statistical case. Many accidents are the result of 
pilots overestimating their ability to manage a given situation. This 
failure of judgment is independent of training and experience (really 
the same thing). Experience generally increases the skill level of a 
pilot and therefore reduces the probability that they will encounter a 
situation that their skills can't match. It could be argued that being a 
coward would be more important that stick time in determining how "safe" 
a pilot is or is not. We will never know until psychological profiling 
becomes part of recurring training and NO I AM NOT RECOMMENDING THAT!

Dave R. made the point that because our planes are worth a lot they must 
be insured against loss. This is a common misconception, promoted by the 
insurance industry, that you must have insurance for everything. A wise 
man once advised me that you only need insurance for something you 
cannot afford to loose. By paying an insurance premium you are wagering 
that you will be less lucky that the average person. You don't need 
insurance on anything that is paid for and is non-essential in your 
life. Old people without dependents and debt do not need life insurance. 
Young people with new families and mortgages do. Ask yourself that if 
your airplane vaporized, would you still be able to provide for your 
dependents and keep a roof over your head? The answer better be yes and 
if it is then you can "afford" to loose it.

By paying an insurance premium you are wagering that you will be less 
lucky that the average person. It is a suckers bet unless it is a bet 
you cannot afford to loose. Insurance is NOT an investment. Your net 
worth always decreases with insurance. In the event of a loss it just 
doesn't decrease as much.

Brent's plan to save %70 on insurance and provide for your retirement as 
well (yes you have herd this from me before and I am glad to see some 
have taken my advice). The logic is simple. As the builder I can fix any 
damage from a crash that I can live through. I have health insurance and 
life insurance that covers my hull regardless of the severity of the 
crash.  I have liability and hull Not In Motion insurance to protect me 
from the legal vultures and fully cover the airplane 99% of the time. 
The $10,000 a year that I don't pay to the insurance company I keep in 
an investment account which in the six years since I started flying my 
IV has ballooned to over half the replacement cost. In another 4 years 
I'll have an airplane AND an airplanes worth of cash in MY pocket 
instead of the insurance companies'.

Life is full of risk. Whether or not you have insurance has no bearing 
on whether something bad will happen to you. To make you a safer pilot, 
practice your emergency procedures, get recurrency training from 
different instructors, never push the endurance of your airplane, be 
meticulous about maintaince, get your instrument rating in your 
airplane, avoid low and slow wherever possible and above all.....be a 
coward.

Live long, fly safe.

Compliments of the season.
Brent Regan


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