Aircraft Insurance

HGeorgeC*

Hi All!
Quick question, asking for a friend!
He is a new Helicopter Pilot and now owns a Bell 47.
It’s a nice machine and is appraised at about $150,000.
His full coverage insurance premium is $9,000.
He also owns a Piper Warrior and a similar policy runs him $1200.
His question to me today was…
“George, would it make any sense at all to only carry Liability on this Helicopter and cut my insurance bill down to about $1700 a year?”
He’s a Doctor, great guy, more money then God, or at least as much and I’d like to help him…
So I thought I would ask for any input.
The negative side is obvious with a hull loss, while not bankrupting him, it would be a financial hassle to replace the helicopter.
On the positive side, with obtaining Liability only, he’s saving several thousands a year.
I know some guys do this with their Condo’s in Florida. Hurricane Insurance is basically unaffordable and so guys just “self insure” and eat any losses IF they occur.
So, have any of you guys out there adopted that frame of mind and are pretty much “self insuring” the hull on their airplanes, keeping Liability on so you’re not sued into the Poor House??
Hope the question makes sense!
Thanks in Advance for your Help!
Fly Fun, Stay Safe!
George
N8434M
KLPR

empannin

George,
If it was a total loss would he have to pull kids out of college, delay retirement, sell property, find another spouse? If not, then likely a good candidate for liability only. He should be seeking out the highest liability coverage possible as his biggest risk is likely not the loss of airframe but claims against him or his estate.

He should also take the delta between full and liability only and invest it annually.

This approach only works if you have the risk tolerance for it, you are the only pilot, you are a good pilot, and it is not financed. From the insurance company perspective you have "skin in the game" = the value of the aircraft (as well as your own skin). That is a pretty good bet.

He might want to keep not-in-motion coverage with a high deductible to cover some risks out of his control.

It might be an interesting insurance product to have catastrophic insurance only. Similar to a high deductible health plan. Maybe pays out only if damage exceeds 50% of value? If financed they would likely want a higher down or even an escrow to minimize their risks.

HGeorgeC*

Thanks Eric!
All Great Points!
I’ll discuss it with him.
Thanks Again!
G

MikeJJ

Helicopter ownership and airplane ownership; different worlds. The 8% to 10% of hull value for insurance is just the tip of the iceberg. In the helicopter world there is very little “on condition” maintenance. Its mostly TIME on each component; either calendar time or operating hours before MANDATORY replacement. The Bell 47 is a bit better with regard to the main rotor if he has the older rotors. They are on condition and rebuildable but for a Robinson, well, after 12 years they are scrap and must be replaced at about $35k
regardless of hours (or at 2200 TT when the ENTIRE aircraft must be rebuilt at $120k +

I’m in envy he has the resources to support Bell 47 ownership. I have a commercial helicopter rating but ownership of a normally certificated helicopter is financially out of reach. Even experimental homebuilt is hovering around $100,000, no pun intended.

With regard to the insurance, there is no such thing as minor damage to a helicopter, so if you are going to go the owner route, you might as well get fully insured and realize that owning a helicopter is EXPENSIVE…just say’in.

HGeorgeC*

Thanks Mike!
I will pass your information along to the Owner!
Appreciate your time!
George