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Thread: Insurance - Over or Under Insure on Hull Value

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    Insurance - Over or Under Insure on Hull Value

    I can see both sides to this argument but thinking about insuring it for a little less than it's "worth" - my rationale is that you don't get that back unless it's a total loss and can't salvage any of the components buying it back. What are your thoughts?

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    hotrod180's Avatar
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    I've seen airplanes underinsured--
    insurance company totals it out,
    pays the owner, then sells the salvage off to recoup it's payout.
    Better IMHO to insure for replacement value or close anyways.
    Cessna Skywagon-- accept no substitute!
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    G44's Avatar
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    Quote Originally Posted by TxAgfisher View Post
    I can see both sides to this argument but thinking about insuring it for a little less than it's "worth" - my rationale is that you don't get that back unless it's a total loss and can't salvage any of the components buying it back. What are your thoughts?
    Insure it for what you are willing to sell it for or what it would cost to replace it. I have seen friends underinsured “Totals” loose a big time. Don't under insure would be my advice.

    Kurt
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    I don't think you save much by under-insuring. Ten bucks?
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    mvivion's Avatar
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    Do NOT under insure. If you're going to do so, just buy liability coverage and forget the hull coverage.

    MTV
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    JimParker256's Avatar
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    Insurance seminar at SnF a few years ago aligns with what G44 said above: Insure it for what it's actually worth (true replacement cost). Insurance companies will often "total" a plane if the damage comes to 75% of the value (sometimes a LOT lower).

    Under-insuring means the insurance company might total an airplane that could be easily fixed. Let's say your plane is worth $80K and you insure it for $50K, then wind up having an incident that could be repaired for $40K. In this case, the insurance company will total the plane and pay you the $50K. You not only don't have the plane, but you don't have enough to replace it.

    Over insuring isn't a great idea, either. You may wind up in a situation where the pane SHOULD be totalled by the insurance company, but they elect to repair it instead because it is less money for them... Now you're left with an airplane that's had major damage and repair history that could dramatically impact your ability to sell it again. (Though I would think this is far less of a concern for Cub-type airplanes than for something like a King Air...)

    Best bet is to insure it for what it would cost you to replace it.
    Jim Parker
    2007 Rans S-6ES
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    Depending upon the airplane and insurance company, you may have to ‘show your work’ on an airplane they believe may be over-insured. I’ve had agents call regarding highly modified floatplanes to understand what replacement cost would actually be.

    I have also seen more than one person hosed by underinsuring an airplane just in the past year. One ended up with an airplane not as nice as his totaled one, and one is eating some big repair costs. Not worth saving a few bucks in my opinion.

    I even increased the ground value of my airplane as a project when we completed major parts of the work. That way, if there was a fire or hangar collapse or goodness-knows-what, I’d be able to replace it with a comparable airplane instead of having to go back to square one and buying a flying project that would need the same rebuild treatment in a few years.

    —Amy


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    Proud owner of a collection of airplane pieces (sometimes in one big piece) known as the Oklahoma Kid.
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  8. #8

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    Good advice, thanks. $25k on the hull made about 20% difference in premium - good news is it's still way less than insurance on my 180!
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    I’ve seen to many airplanes under insured and totaled when they are still airworthy since the insurance company knows the salvage will be more than what the owner insured it for. If you do under insure, don’t ever put a claim in unless you really know it is totaled!


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    I just had my cub "data plate" rebuilt and the insurance co. won't insure for what I just put in it plus the airplane was worth something before I had it rebuilt so they are way off what I think I could sell it for. And I submitted a list of what I did. But to not insure would be crazy if I did like $50,000 damage; I would have to pay that. So I guess ill insure for what they say there max is but it's way short.
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    www.SkupTech.com mike mcs repair's Avatar
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    Also remember the helicopter trip back home comes off the top of that value


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    mvivion's Avatar
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    Quote Originally Posted by The Kid View Post
    I just had my cub "data plate" rebuilt and the insurance co. won't insure for what I just put in it plus the airplane was worth something before I had it rebuilt so they are way off what I think I could sell it for. And I submitted a list of what I did. But to not insure would be crazy if I did like $50,000 damage; I would have to pay that. So I guess ill insure for what they say there max is but it's way short.
    What company? I’ve been questioned on three airplanes, but when I provided documentation, they said fine. Go to Barnstormers right now, copy the prices of rebuilt Super Cubs, forward to your insurance and ask them what gives.

    Unless you’re asking Carbon Cub “values”.....

    MTV
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    In my case, I bought a good Dec for 42 grand, and the agent said "no, bob, you really need $52k. So that's what we did. That agent taught me a lot about insurance - aviation insurance is complicated and widely misunderstood.

    We have several fairly wealthy guys teaching in expensive airplanes with just regular non-commercial policies. Hope they never have an insurable incident.

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    Quote Originally Posted by mvivion View Post
    What company? I’ve been questioned on three airplanes, but when I provided documentation, they said fine. Go to Barnstormers right now, copy the prices of rebuilt Super Cubs, forward to your insurance and ask them what gives.

    Unless you’re asking Carbon Cub “values”.....

    MTV
    I had the same experience yesterday. Insurance company said the best they could do was 40k on my PA-12. I have more than that into the engine and landing gear. I’d never do it again but probably have 80k into it.


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    So, what was your reply, you going with that company or continuing to shop?
    Clearly these planes are seeing a pleasant rise in value which portions of the industry are reluctant to accept.
    I am curious as to what the insurance companies will allow on my one off EX plane.
    Regards, Charlie
    Super Coupe E-AB build in process
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    behindpropellers's Avatar
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    Quote Originally Posted by boarfish View Post
    I had the same experience yesterday. Insurance company said the best they could do was 40k on my PA-12. I have more than that into the engine and landing gear. I’d never do it again but probably have 80k into it.


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    They are trained to tell you that. It doesn't take long to show them true replacement costs.

    T
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  17. #17

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    MTV,
    EXCELLENT idea to go to Barnstormers and copy what rebuilt cubs are for sale for and send that to my insurance company. I'll do that. My insurance co. is Regal in Oregon. I sent them a list of what we have done and they came up with the $127,000 value. My value is more like $185,000. Avemco would only value at $110,000 but they said they hadn't received my list but even at that they were double the premium that Regal is charging me.

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    I’m waiting on other quotes. I just got one quote for $90k on hull insurance. $2900. a year. I built a show quality airplane, and want to protect it, but now I may not be able to afford to keep it. It’s all very disheartening.

  19. #19

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    FYI, First, my insurance co. said they wouldn't take asking prices to establish value. They want an appraisal if I want more. . Also my premium for a $million/$100,000 liability and $127,000 hull is like $2,000 quoted a year.

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    I got a better quote today. Shaved off $1100.00 and got the coverage I wanted. At $90k my labor works out to about $2.00 an hour. I guess it only maters if I wreck it.

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    jimcrawford01's Avatar
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    Quote Originally Posted by mvivion View Post
    Do NOT under insure. If you're going to do so, just buy liability coverage and forget the hull coverage.

    MTV
    Mike

    Is Liability ONLY an available option.
    I asked a few years ago and was told NO. Must get (and pay for) Hull and Liability.
    If Liability ONLY is available, what company offers it?

    Jim

  22. #22
    Steve Pierce's Avatar
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    Upped the value on my Super Cub $10K for just under $100. Too many expensive parts on a beater Cub not to do it.
    Steve Pierce

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    Will Rogers
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  23. #23
    G44's Avatar
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    Quote Originally Posted by jimcrawford01 View Post
    Mike

    Is Liability ONLY an available option.
    I asked a few years ago and was told NO. Must get (and pay for) Hull and Liability.
    If Liability ONLY is available, what company offers it?

    Jim
    Yes Jim, unless something changed liability only is available. My dad never purchased hull insurance, liability only, he never wrecked or scratched an airplane over all the years so he is way ahead in savings.

    Kurt
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  24. #24

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    Liability only on my J3. Saved enough over 58 years to buy another really primo aircraft.
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    mvivion's Avatar
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    Quote Originally Posted by jimcrawford01 View Post
    Mike

    Is Liability ONLY an available option.
    I asked a few years ago and was told NO. Must get (and pay for) Hull and Liability.
    If Liability ONLY is available, what company offers it?

    Jim
    Every company I’ve ever dealt with offers liability only. I’d bet an insurer would rather sell liability only, frankly, though they don’t make as much money. Ask your insurer, I’ll bet they’ll quote.

    MTV

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    They insured my experimental PA12 on wheels at $200,000 hull, ground and flight, for $2,490. $183 more for $1M liability, 100k per passenger.

    I think that is very reasonable.

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    Hey Paul,

    That sound incredibly reasonable, almost too good to be true in this current insurance world. Would you mind sharing the outfit you are going with. I am shopping insurance now.
    Thanks much.
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  28. #28

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    Try this:

    Maggie Anderson

    Aviation Account Manager | Fifth Third Insurance
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  29. #29
    hotrod180's Avatar
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    Quote Originally Posted by bob turner View Post
    Liability only on my J3. Saved enough over 58 years to buy another really primo aircraft.
    OTOH you would be way ahead if you totalled an valuable airplane with hull coverage after say 10 years of flying.
    10 years at $1200/yr = $12,000 vs $70K hull value payout.
    Cessna Skywagon-- accept no substitute!

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    I am curious where I will be when I come to buying insurance. There are no true comps for them to compare to for estimating value or risk.
    Regards, Charlie
    Super Coupe E-AB build in process

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    Yeah - that is why rates are going up - if we wreck evey ten years the premiums would have to be $700/year not counting overhead and profit.
    When you go without hull, you are making a bet - you could lose, but more likely you will win. Question is only "can you afford to lose that $70 grand?"
    Life insurance is the opposite - you only win if you die young. ? (Joke, sort of)

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    They wouldn’t up mine much more than $110 after the rebuild. I sent them the invoice from the rebuild and pictures of it being a new airplane. They upped it.


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    Steve Pierce's Avatar
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    Quote Originally Posted by RaisedByWolves View Post
    They wouldn’t up mine much more than $110 after the rebuild. I sent them the invoice from the rebuild and pictures of it being a new airplane. They upped it.


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    I have had to write up several Super Cubs and my Dad's Clipper rebuild for the same reason.
    Steve Pierce

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  34. #34
    irishfield's Avatar
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    Go ahead and under insure it. Tweak it one day, call the adjuster that then takes a shine to your ride and it'll be here's your cheque.. thanks for the plane!
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  35. #35
    jimcrawford01's Avatar
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    Quote Originally Posted by mvivion View Post
    Every company I’ve ever dealt with offers liability only. I’d bet an insurer would rather sell liability only, frankly, though they don’t make as much money. Ask your insurer, I’ll bet they’ll quote.

    MTV
    Thanks.
    I will gladly self insure for the hull. If I can find it.
    Coming up for renewal shortly. I will pursue and report back.
    Jim
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  36. #36
    hotrod180's Avatar
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    A friend of mine recently put his C185 on it's back.
    Fuselage was straight & undamaged, but vertical, both wings, & prop were all wiped out.
    Plus of course a prop strike on the engine.
    He had it insured for $200K, which I'd thought would be adequate,
    but the insurance outfit totalled it, which kinda surprised me.
    Cessna Skywagon-- accept no substitute!

  37. #37
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    If that’s the plane I’m thinking of, it had an IO-550 and G3X panel. Underinsured at 200k.
    Lou
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  38. #38

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    I bet it cost half that to make it brand new. New engine/prop fifty grand, trip to Beegles another fifty?

  39. #39
    skywagon8a's Avatar
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    Quote Originally Posted by bob turner View Post
    I bet it cost half that to make it brand new. New engine/prop fifty grand, trip to Beegles another fifty?
    Just the engine is $51k http://www.airpowerinc.com/productca...9&prodID=24131 You are way low Bob, time marches on.
    N1PA

  40. #40

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    Hah! Picked up a whole darn 180 - corrosion free, new paint, good engine - and flew it IFR out of Vero Beach after a Piper tour. Sixteen thousand. Loved that plane. My student sold it and bought a Cherokee! I cried.

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