Reply-To: <IIP@hawaii.rr.com>
Reply-To: lancair.list@olsusa.com
From: "IIP" <IIP@hawaii.rr.com>
To: "Lancair Mail List" <lancair.list@olsusa.com>
Subject: Insurance Association
Date: Thu, 13 Dec 2001 23:16:10 -1000
Organization: Inter Island Petroleum
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I've gotten several direct positive responses to the idea of a
self-insured Association. One negative was posted, which related to
personal liability. On that subject, I believe the Association would be
a corporation, thereby removing the member/owners from personal
liability. Do we have any attorneys out there? What would be the
structure?

Another comment was that this is just like being an insurance company.
Well, yes. Think of it like a private insurance company that only takes
one specific kind of risk, makes its own rules, and limits its liability
to its capital. Impossible to lose more than you put in, and any
insurance premium is lost as soon as it is paid anyway. As someone said,
a couple of gear up landings could put it out of business. That may be
true in the first year, as I think I pointed out. In the second year, it
would not be true, and it would get better and better as the members pay
in annually and big accidents do not happen. I would want a large
deductible so we don't have to deal with "bloopers"...maybe $50,000. I
think I am typical, in that I worry most about the catastrophe that
could bankrupt me and/or my family. The airplane is kind of secondary.
The great thing about Lancair owners, unlike, say, Beechcraft owners, is
that we can fix the minor stuff ourselves. A bump in the hanger that
would cost $10,000 in a Bonanza is a few weekends of labor for a Lancair
owner.

I think this is the only way many of us are going to get the coverage we
want. The key is assessing the risk of each insured member. Personally,
I think this involves factors beyond hours or ratings. For example, I
wonder if there is a correlation between a pilot's auto accident record
and his flight accident potential? I wonder if pilot's who are
entrepreneurs are higher risk than pilot's who are government employees?
I wonder if pilots who have annual incomes of less than $50,000 are
higher risk than those who make over $100,000? And what about the
airplane itself? Can't we inspect airplanes and rate their risk of
failure? There are lots of interesting ways to look at limiting risk
when you are dealing with a very specific group.

I also think the price of admission is training. Anyone who balks at
this is, to my mind, someone we would not want to insure. Insurance
companies have general requirements, which are somewhat arbitrary, and
which rely on the FAA as the authority. Is an IFR pilot inherently safer
than a VFR pilot? A Lancair training requirement might be quite
different.

It would be interesting to outline a program, do the numbers and see how
many Lancairs would be seriously interested in an insurance Association.

Brian Barbata

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