Return-Path: Sender: (Marvin Kaye) To: lml Date: Tue, 23 Sep 2003 23:44:35 -0400 Message-ID: X-Original-Return-Path: Received: from mail.inter-linc.net ([12.10.101.4] verified) by logan.com (CommuniGate Pro SMTP 4.1.4) with ESMTP id 2601013 for lml@lancaironline.net; Tue, 23 Sep 2003 22:51:42 -0400 Received: from s0026980490 (unverified [12.28.51.22]) by mail.inter-linc.net (Vircom SMTPRS 2.0.244) with ESMTP id for ; Tue, 23 Sep 2003 21:48:45 -0500 From: "Ron and Marlene Brice" X-Original-To: "Lml" Subject: What you may not have known about aircraft insurance X-Original-Date: Tue, 23 Sep 2003 21:50:29 -0500 X-Original-Message-ID: <000001c38246$9f564aa0$16331c0c@s0026980490> MIME-Version: 1.0 Content-Type: multipart/alternative; boundary="----=_NextPart_000_0001_01C3821C.B6828C90" X-Priority: 3 (Normal) X-MSMail-Priority: Normal X-Mailer: Microsoft Outlook, Build 10.0.4510 Importance: Normal X-MimeOLE: Produced By Microsoft MimeOLE V6.00.2800.1165 This is a multi-part message in MIME format. ------=_NextPart_000_0001_01C3821C.B6828C90 Content-Type: text/plain; charset="us-ascii" Content-Transfer-Encoding: quoted-printable Things are well under way for N27RM to start a rebuild. =20 However, I am learning that insurance companies think differently than pilots. =20 Lets assume for explanation's sake that you have an aircraft that you = have $200,000 invested in. You figure that since you built it, you could = repair it if you had a relatively minor accident, like a gear up, loss of a = brake and ground loop, running into a hangar, etc., so you insured it for = $75,000 with the thinking that if it was a total loss, you most likely would not have "walked away" anyway, and who cares. The $75,000 insurance you = thought you bought should fix any likely damage you might expect for a minor accident. =20 Now, let's assume you land gear up. First thing is that Hartzell will = tell you (if you have the three blade scimitar I had) that you need a new = prop, your "slightly bent one" can't be repaired. $14,000 retail plus = shipping! Next thing is the engine, you can expect (in an IO-550-N like mine) a = bill for just under $7,000 plus tax, shipping, etc for an inspection and replacement of items required under Continental's specs...that is if = nothing is wrong inside...(a new crank is $3850.00,no core credit allowed), Continental says they won't "bend" but will crack. In 70% of cases with prop strike while at idle, no crank damage occurs, how lucky do you = feel? Mag gears are easy to break also. =20 >From there, let's figure that you could repair the belly/wing damage for $10,000 by buying parts and doing it yourself. =20 Would you be surprised that the insurance company would "total" your aircraft and write you a check for $75,000 less your deductible? Most likely they would. I learned that my insurance was not the face value I thought I bought. Insurance companies start with the insured amount, = then look at the repair cost and the salvage value. Lets go back to our hypothetical case. Your insurance company would look at the cost of = repair (in this case $14,000 plus $7000 plus $10,000 minimum, expecting to be lucky) $31,000, then look at the salvage cost which, lets say is $50,000 hypothetically, remember that fancy panel and radios, and the value of = your "slightly used" engine? =20 They may not want to allow you to rebuild, since writing you a check for $75,000 less deductible (let's pretend you had $2500 deductible) and = then selling your "slightly damaged" jewel for $50,000 would cost them only $22,500 out of pocket instead of paying you the rebuild cost of $31,000. That's $8,500 in their favor by paying you and walking away with your = little jewel. =20 My how things add up! My numbers are only arbitrarily chosen to wake = some of us up who may be underinsured (no, I don't get a commission when you = "up" your insurance, just pointing out how things work in the real world.) = You can't believe that your rebuild cost of $31,000 was not covered by your $75,000 insurance premium!!!!!!!!!!!!! =20 I'm not done yet.UUGGHH =20 =20 Are your log books perfect? Any lack of a required inspection (annual return to service, engine AD not accomplished, etc), or operating IFR without required log book entries (there are many, both aircraft and = your personal logbook) and it will be declared a non airworthy operation not covered by insurance. How about your medical and recurrent training? = If not up to date, likewise, you are operating illegally and not covered by insurance. =20 Just a few possible "gotcha's" to think about? =20 Fly safe out there! =20 Ron ------=_NextPart_000_0001_01C3821C.B6828C90 Content-Type: text/html; charset="us-ascii" Content-Transfer-Encoding: quoted-printable

Things are well under way for N27RM to start a = rebuild.

 

However, I am learning that insurance companies think differently than pilots.

 

Lets assume for explanation’s sake that you = have an aircraft that you have $200,000 invested in.  You figure that since = you built it, you could repair it if you had a relatively minor accident, = like a gear up, loss of a brake and ground loop, running into a hangar, etc., = so you insured it for $75,000 with the thinking that if it was a total loss, = you most likely would not have “walked away” anyway, and who = cares.  The $75,000 insurance you = thought you bought should fix any likely damage you might expect for a = minor accident.

 

Now, let’s assume you land gear up.  First = thing is that Hartzell will tell you (if you have the three blade scimitar I = had) that you need a new prop, your “slightly bent one” = can’t be repaired.  $14,000 retail plus shipping!  Next thing is the = engine, you can expect (in an IO-550-N like mine) a bill for just under $7,000 = plus tax, shipping, etc for an inspection and replacement of items required = under Continental’s specs…..that is if nothing is wrong = inside………(a new crank is $3850.00,no core credit allowed), Continental says they = won’t “bend” but will crack.  In 70% of cases with prop = strike while at idle, no crank damage occurs, how lucky do you feel? Mag gears are = easy to break also.

 

From there, let’s figure that you could repair = the belly/wing damage for $10,000 by buying parts and doing it = yourself.

 

Would you be surprised that the insurance company = would “total” your aircraft and write you a check for $75,000 less your = deductible?  Most likely they would.  I learned that my insurance was not the = face value I thought I bought.  Insurance companies start with the = insured amount, then look at the repair cost and the salvage value.  Lets = go back to our hypothetical case.  Your insurance company would look at the = cost of repair (in this case $14,000 plus $7000 plus $10,000 minimum, = expecting to be lucky) $31,000, then look at the salvage cost which, lets say is = $50,000 hypothetically, remember that fancy panel and radios, and the value of your = “slightly used” engine?

 

They may not want to allow you to rebuild, since = writing you a check for $75,000 less deductible (let’s pretend you had $2500 deductible) and then selling your “slightly damaged” jewel = for $50,000 would cost them only $22,500 out of pocket instead of paying you = the rebuild cost of $31,000. That’s $8,500 in their favor by paying = you and walking away with your little jewel.

 

My how things add up!  My numbers are only = arbitrarily chosen to wake some of us up who may be underinsured (no, I don’t get a commission when you “up” your insurance, just pointing out = how things work in the real world.)  You can’t believe that your = rebuild cost of $31,000 was not covered by your $75,000 insurance = premium!!!!!!!!!!!!!

 

I’m not done yet…UUGGHH  =

 

Are your log books perfect?  Any lack of a = required inspection (annual return to service, engine AD not accomplished, etc), = or operating IFR without required log book entries (there are many, both = aircraft and your personal logbook) and it will be declared a non airworthy = operation not covered by insurance.  How about your medical and recurrent training?  If not up to date, likewise, you are operating illegally = and not covered by insurance.

 

Just a few possible “gotcha’s” =  to think about?

 


Fly safe out there!

 

Ron

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