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Thread: Hull Insurance

  1. #1

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    Hull Insurance

    My PA12 project is nearly finished and we are preparing for its first flight. Before then I need to get her insured and I hope someone here can provide some guidance as to where to get it and how to set a reasonable Hull value.

    Is it reasonable for me to want the Hull Insurance to cover the actual replacement cost of everything in the event of a total loss? And how does one figure its replacement cost?

    Or is it based on market value of a comparable airplane? As many of us are aware, there is a big difference between what I have in it as opposed to what it would bring on the open market.

    First off, it’s an experimental category; built from the ground up using all new parts mostly from Univair. The engine is from Cubcrafter; a lightweight Lycoming XO-340 180hp with a 3-blade Catto propeller. It has flaps, 18 gear and tail, skylight, GWI, extended baggage, float fitting, glass instrument panel, etc., etc., etc.

    I know that there are kit manufacturers out there that charge less for a “complete” PA12 Kit, but if I had to purchase again all the exact parts I did purchase at today’s prices it would total somewhere between $130-150,000. That’s just in the bare parts alone. So, the cost of the parts is fairly easy to calculate—it’s the labor cost that is difficult to figure.

    How many hours would an experienced builder expend building an experimental PA12 clone starting from a new bare fuselage? 1,000? 2,000? 3,000? And if it were even possible to find an experienced builder with that much time on their hands, what labor rate would an insurance company think reasonable?

    Is it unreasonable insure the plane for $200-250,000?

    Any personal experience, insight, and guidance about Hull Insurance that you can provide would be helpful. Thanks in advance.

  2. #2

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    Not unreasonable at all but you may not like the premium you will have to pay. I raised the hull value of my cub when I started looking at what I would need to replace it.
    DENNY
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  3. #3
    www.SkupTech.com mike mcs repair's Avatar
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    Depending on how custom build is, it can take upwards of 1300 hours. Or it can take much less if it’s just bolting together standard parts..... all depends and how fancy the customer wants it. But they all ball up just the same!


    Sent from my iPhone using SuperCub.Org

  4. #4

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    You should already have it insured!!!
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  5. #5
    85Mike's Avatar
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    Starting in '99 and finishing in '03, we spent around 60k hard dollars and about 4000 man hours to build our certified PA 12-180, with 43 certified mods. Did our own one time STC for the 180 hp. At $20/hr for our labor, I guess it was worth $140k. Insured it for $100k and unfortunately had to collect that after 10 yrs. and 700 hours. Damned nice cub!! Had to argue with the insurance carrier on how a 1947 airplane could possibly be worth that much!!!

    Mike
    Last edited by 85Mike; 07-13-2019 at 09:06 PM.
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  6. #6
    RVBottomly's Avatar
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    Not an airplane, but the thread reminds me of the boat I built a few years ago. I built it from scratch from $1500 in materials. Then I bought a new 20 hp outboard for $2500. It took about 350 hours to build.

    I wanted liability insurance, at least, before launching. I talked to our auto agent who was clueless. She referred me to some specialist in Florida who wanted pictures of the completed project, and sample pictures of the building process.

    They seemed to be stonewalling me. I just wanted liability insurance and maybe coverage to replace what I had into her. I called a couple of times and didn't get responses. Then suddenly I was told that they'd insure it for $30000 and no higher. The coverage was very affordable.

    Well, OK. If you insist.... I took it.
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  7. #7

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    I insured the first one I built for $110,00 plus $20,000 for the floats through the Seaplane Pilots association. I guess they now just refer you to Avemco or something.

    At the time the SPA also insured my Beaver and Mooney. The Beaver was $6,000 on floats at $450,000 Hull, the PA12 was $900 on floats, and the Mooney was around $1,000 for $35,000 coverage. I got the multi-plane no accident history discount. Today, $2-3000 range for $200,000 coverage would be acceptable. Is that anywhere close to what DENNY has?

    The SPA treated me really well for a $130,000 hail damage claim and didn’t even raise my rates. Once they saw my current medical certificate and that the plane was in annual they asked where should we send the checks! No problems whatsoever. I wish they were still around. I would happily use them again

    They told me horror stories about planes being underinsured and they would total a plane with minor damage, pay the owner 5 cents on the dollar and walk away with a half million dollar plane that needed only $25,000’ in repairs.

    My agent kept bugging me to increase the Hull values so it would be impossible to total the aircraft unless the truly catastrophic accident happened. Good advice. Now I just need to find a good, honest insurance broker again.
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  8. #8

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    Paul
    I pay little over 2 grand for 85,000 + liability on the cub. I have two ATP'S and myself (private pilot) on the policy. Mike, I had the same talk with the people about the price of a 1951 aircraft. Insurance will usually cover 70 percent of insured value for repairs. After that they total the plane and give your insured value. They sell what the wreck for whatever they can get for it. Anyone that would insure a half million dollar plane for less than it is worth gets what is coming to them. Alaska Insurance companies have taken a beating last few years. I hope but do not expect my rates to stay the same.
    DENNY
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  9. #9
    hotrod180's Avatar
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    Quote Originally Posted by Paul Heinrich View Post
    …...They told me horror stories about planes being underinsured and they would total a plane with minor damage, pay the owner 5 cents on the dollar and walk away with a half million dollar plane that needed only $25,000’ in repairs. …..
    I know a guy this happened to.
    Smaller $ numbers, but the same idea.
    Foolish to under-insure just to save a few bucks on the premium.
    Cessna Skywagon-- accept no substitute!

  10. #10
    hotrod180's Avatar
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    Quote Originally Posted by 85Mike View Post
    …..Had to argue with the insurance carrier on how a 1947 airplane could possibly be worth that much!!!
    Doing that when purchasing the insurance would be bad enough,
    I hope this didn't happen when you made a claim.
    IMHO if you were willing to pay the premium for a specific value,
    they shouldn't kick about insuring for that value,
    or about paying out a settlement for that amount..
    Cessna Skywagon-- accept no substitute!
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  11. #11

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    Insurers are very sensitive to over insuring and will question the stated value if it seems high. For obvious reasons!

    I shopped pretty hard for insuring my Cub and was met with a bit of resistance to insure an expensive exp in Alaska but at that time we had several very expensive exp Cub claims. A couple of underwriters weren't interested in any new business in Alaska and the ones who would quote me were all reluctant to insure the value, likely because they don't understand the exp Cub market. I ended up adding my Cub to my long time Avemco policy because the package offered the best coverage and price. FWIW, Avemco has a $200K limit on exp aircraft (at least for me). At $200K they were the best price and above $200K the other bidders' prices escalated steeply. Remember, that's for an Alaskan plane. We're accustomed to high aircraft insurance prices here. $200K insures the hard dollar investment leaving my time and effort uninsured. I'm okay with that because I've enjoyed every moment wrenching on this plane and would happily jump into another one. Exp Cub value is hard to quantify. CC can sell $300K airplanes as fast as they build them. That doesn't represent a comp when evaluating my plane. From the asset standpoint there's good reason to buy a CC. The tricked-out replicubs and Backcountry modifieds aren't fetching those prices. Hats off to CC for schooling us on the value of building the brand.
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  12. #12

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    My Decathlon is covered for $52K. I bought it for $42K, and my favorite agent said no - make it 52. He has since left Avemco, but I learned a lot from him.

    I now insure through "Southwest" and apparently "Global Aerospace" is this year's underwriter. $900 and change, and I get renter's insurance with the same hull. Avemco sent me a bid $600 or so higher for the same coverage.

    Avemco has advantages - if I forget my flight review I am not covered, but would be under Avemco. And apparently the Stearman policy with Avemco was the absolute cheapest way to go, with four owners and me as covered instructor.

    One bid on the Stearman policy wanted 100 hours of dual prior to solo for a low time tailwheel pilot. Avemco just wanted an instructor signoff. I would say 25 hours if I were an insurer.

    My guess - if Avemco comes anywhere close, they are a good choice. I have no experience with claims, so that is not an expert opinion.
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  13. #13
    mvivion's Avatar
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    Quote Originally Posted by Paul Heinrich View Post
    I insured the first one I built for $110,00 plus $20,000 for the floats through the Seaplane Pilots association. I guess they now just refer you to Avemco or something.

    At the time the SPA also insured my Beaver and Mooney. The Beaver was $6,000 on floats at $450,000 Hull, the PA12 was $900 on floats, and the Mooney was around $1,000 for $35,000 coverage. I got the multi-plane no accident history discount. Today, $2-3000 range for $200,000 coverage would be acceptable. Is that anywhere close to what DENNY has?

    The SPA treated me really well for a $130,000 hail damage claim and didn’t even raise my rates. Once they saw my current medical certificate and that the plane was in annual they asked where should we send the checks! No problems whatsoever. I wish they were still around. I would happily use them again

    They told me horror stories about planes being underinsured and they would total a plane with minor damage, pay the owner 5 cents on the dollar and walk away with a half million dollar plane that needed only $25,000’ in repairs.

    My agent kept bugging me to increase the Hull values so it would be impossible to total the aircraft unless the truly catastrophic accident happened. Good advice. Now I just need to find a good, honest insurance broker again.
    Paul,

    Just as a point of clarification, SPA has never offered aircraft insurance. They had agreements with a specific broker to provide insurance to SPA members. In my experience, at least, I could get the same rates from that insurer SPA member or not. For a number of years they used Falcon, and I always found Falcon to offer reasonable rates.

    On my current airplane, I stated a value I wanted coverage for from Avemco, and, as has always been my experience with them, they never balked at that value. I state what I consider a realistic cost to replace with something similar.

    Theres little point in buying hull coverage if youre going to underinsure it. False economy.

    MTV
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  14. #14

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    Paul,

    i can’t believe no one else is suggesting get it insured now! I would have insurance on it tomorrow. Where ever it’s at if it is destroyed tomorrow sitting in a hanger you may have zero coverage on it!
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  15. #15

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    FWIW Avemco insures projects. You can adjust the value as the project grows and you gather parts and components. Very reasonable.
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  16. #16

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    The underwriter on my -12 doesn't cover experimental, so can't really comment on point, but some hopefully helpful hints:

    - Get it insured now as a project in process.
    - Get as much hull value as you can: in my case, the insured value is a bit less than documented rebuild cost, but it's with my long term underwriter and they have a history of arguing about hull value at the time of writing the policy, not so much when a claim is filed, although they will declare a total at 80% of the value vs. cost of repairs
    - When you get your policy, read it thoroughly.

    My agent called me in May (renewal time) all excited about a reduction in rates...so I'm thinking about how I'll spend all my savings: when it came down to it, my reduced rate of $12 bought a couple gallons of avgas.
    Back In Alaska
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  17. #17

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    I found my old insurance agent, Hayes-Utley out of Louisville. They are now Fifth Third Insurance Agency and we started the process.

    If any of you high Cub/SuperCub/12/14 drivers in the Poplar Grove, Illinois area want to help burn off the initial flight proving hours, forward your name, hours, hours in make and model, and accident history to me and I’ll see about getting you named as insured.

    Those of you with money burning a hole in your pocket can take part in the certification and registration process. What better time to evaluate a new build than to participate in its initial hours.

    You guys have been mostly positive, with the typical 10% needing filters. Overall I’m happy to have been on this site, making my own unfiltered 10% back at them.

    The tragedy is we we ran out of time for Airventure 2019. If we had a month more time. Oh well. It happens.

    I hope to post some pictures tomorrow and look forward to your response.

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