# Insurance?

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#### TXFlyGuy

##### Well-Known Member
It appears that the experimental aircraft community will have challenges going forward obtaining insurance, at any cost.
Some friends (T-51 Mustang) are saying that the policy will not be renewed by the underwriter due to losses in the industry.

#### TXFlyGuy

##### Well-Known Member
In the helicopter world, insurance went up 100% and if you are over 70, they will not insure you at all. No matter time or licenses held. They don’t care if you are healthy.

With a couple of high profile aircraft and super car crashes and the huge payouts associated with them, I see insurance stopping insuring toys. The pool is too small. It will be soon like race cars, you wreck, it’s your problem. Don’t put your 401k in your toy thinking you are going to get it out. We can’t get rid of two helicopters now as anyone who wants to buy can’t get insurance and they don’t have the kind of money to throw away $500,000 if they crash. Smart business people don’t throw away 1/2 mil anytime. Owner of course is 70; 71 now. Me, unemployed as associated mechanic. In the T-51 world, again the sample size is miniscule. Only 250 in the worldwide fleet, with 150 flying today. There have been recent crashes, with the latest one being fatal. It appears there have been a total of 3 fatalities in this Mustang. But even a non fatal accident can wipe out the hull, being a total loss. #### TFF ##### Well-Known Member Insurance runs the show. I know someone with a rarer homebuilt, still in project stage, just as complex as yours. No way he will even be quoted when it gets done. #### Vigilant1 ##### Well-Known Member Lifetime Supporter FWIW, I found it very worthwhile to work with an agent (and I usually go direct-to-seller for products, when feasible). There aren't many underwriters and you just get one shot at each. An agent helped me present my case most effectively, and has an interest in getting me a policy. Sure, do research to see what a direct-from-seller policy will cost, but contacting a good agent before exhausting all the underwriters saved me some money. #### TXFlyGuy ##### Well-Known Member AVEMCO might be an option as they are self insured. But the premiums are going to be in the stratosphere. #### TFF ##### Well-Known Member Just to add insult to injury, my boss/friend is an insurance check pilot. They are not insuring the people they trust to check for good risk. #### BJC ##### Well-Known Member HBA Supporter 150K hull and liability. You realize, I’m sure, that if the insurance company totals it, you get$150,000 and they own whatever is left (i.e., the salvage value) of the airplane.
Next spring it looks like my policy will not be renewed
I would want to get as much of a phase I test program completed as possible before going to liability coverage only.

BJC

#### Wanttaja

##### Well-Known Member
It might help to reduce insurance risk if you take out the rear seat before next year.
Don't think that'd made a difference. My insurer gives me passenger liability coverage, no matter how many times I tell them it's a single-seat airplane.

I think it's the value of the airframe, and the rate of losses, that's causing the jump.

I've got 11 T-51 accidents in my 1998-2018 database. NONE of them involve the pilot's stick and rudder skills. All are due to issues with engine power outages. A few of those are pilot-induced, but I can see why the insurance industry might be getting leery of the T-51.

Ron Wanttaja

#### TXFlyGuy

##### Well-Known Member
Don't think that'd made a difference. My insurer gives me passenger liability coverage, no matter how many times I tell them it's a single-seat airplane.

I think it's the value of the airframe, and the rate of losses, that's causing the jump.

I've got 11 T-51 accidents in my 1998-2018 database. NONE of them involve the pilot's stick and rudder skills. All are due to issues with engine power outages. A few of those are pilot-induced, but I can see why the insurance industry might be getting leery of the T-51.

Ron Wanttaja
Is that 11 worldwide, or just in the USA? There are only 3 fatal that we know of, in Sweden, New Zealand, and the recent one in Colorado.

In the fatal cases, it appears (speculation alert) that the plane simply was allowed to stall prior to crashing, with the pilot losing control.

Several non-fatal accidents are related to gearbox issues, one being that it is suspected the PSRU had little or no oil.

One or two more were the result of prop gov failures (debris in the gov).

We are not familiar with any accidents that are the result of engine failures. The NZ fatality is thought to have been caused by the 80+ year old pilot switching the ECU off.

And a recent off airport landing (U.K.) after the Honda V6 quit, for unknown reasons. Little airplane damage, being rebuilt now.

I know of two events that were preceded by catastrophic engine failures, a Honda V6 and an LS3. In both cases, the factory test pilot simply dead sticked back onto the runway.

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#### Wanttaja

##### Well-Known Member
Is that 11 worldwide, or just in the USA? There are only 3 fatal that we know of, in Sweden, New Zealand, and the recent one in Colorado.
US only. None involved fatalities (the Colorado one is too recent for my database). Here's what I have in my database, including the NTSB Probable Cause:

CHI08CA103, 4/3/2008, Suzuki engine, "The failure of the propeller pitch control mechanism during approach."
ERA09LA221, 3/25/2009, Rotax 912. "A partial loss of engine power due to the carburetor not being secured to its mounting pad."
ERA10LA229 , 4/14/2010, Honda. "The builder’s use of inadequate material for the exhaust manifold adapters resulting in heat damage and chafing of the crankshaft synchronizer and timing wires that rendered an inoperative ignition system and loss of engine power."
WPR10LA316, 6/27/2010, Rotax 912. "A loss of engine power during approach due to thermal damage to the engine's electronic ignition module. Contributing to the accident was the builder’s placement of the ignition module near the engine’s exhaust. "
CEN13LA103, 12/11/2012, Honda. "The improper engine overhaul by the airplane kit manufacturer, which resulted in a catastrophic engine failure."
CEN13LA346, 6/11/2013, Honda. "Foreign debris in the propeller governor, which led to excessive wear in the governor and its subsequent in-flight failure."
CEN14LA168, 3/21/2014, Rotax 914. "The builder's improper wiring of both fuel pumps to the battery-powered bus, which resulted in a total loss of engine power when the batteries failed because all power to the fuel pumps was lost."
WPR16LA149, 7/23/2016, Suzuki. "A total loss of engine power due to the separation of a flywheel magnet, which impacted the attachment bracket for the primary and secondary ignition and disrupted the timing of the ignition system, rendering it inoperative."
WPR17LA121, 6/4/2017, Suzuki. "Failure of the propeller speed reduction gearbox input drive gear during the airplane’s initial climb for reasons that could not be determined due to extensive damage."
WPR18CA028, 10/28/2017, Suzuki. "The pilot's inadvertent contact with the engine control unit toggle switch during flight, which resulted in the engine shutting down."
ERA19LA032, 10/27/2018, Honda. No NTSB probable cause yet, but the engine started to surge after takeoff and led to a forced landing.

These include ONLY those cases where an accident was reported to the NTSB. Engine failures with successful forced landings are not required to be reported.

Typically, about 38% of homebuilt accidents are stick and rudder errors that don't involve engine issues. If the engine quits and the pilot stalls on approach, my database will list the engine failure as the initiator of the accident, not the pilot's failure to maintain airspeed.

But only one of the above (WPR18CA028) are in my "Pilot Miscontrol" category, due to the pilot's mishandling of the engine control switch....and that, of course, killed the engine. Typically, about 33% of homebuilt accidents involve a loss of engine power (either mechanical or human issues). It's 100% for the T-51 accidents above. That is unusual, in my experience.

Now, you can correctly argue that many of these accidents stem from faulty workmanship. But the topic of this thread is insurance, especially, "Some friends (T-51 Mustang) are saying that the policy will not be renewed by the underwriter due to losses in the industry. "

It may not be the fault of the aircraft, but it appears that the insurance industry is becoming skeptical of the ability of the typical builder to produce a T-51 with a reliable powerplant. By the FAA registration database, there are ~55 Titan T-51s in the US registry. They're not giving up a large market.....

Ron Wanttaja

#### TXFlyGuy

##### Well-Known Member
Ron - Thanks for the info. The fact that none of these were fatal should speak highly of the basic airframe. It is built like a brick out house.
But again, it's easy to total the hull and not have a fatality.

#### rv7charlie

##### Well-Known Member
Don't kid yourself that aviation risk is the only thing driving rates. Most companies insure more than a/c, and even the ones that just insure a/c have far bigger risks from weather than crashes (see any airport after a hurricane or tornado, and start counting planes). Many states regulate rates for homeowner, and even car insurance. Not so common for a/c insurance. If the insurance company is getting hit with a lot of homeowners or auto claims (weather...), guess who gets to help pick up the slack?

After watching rates since the early 1990's, I've found that you can just about time the stock market by watching a/c insurance rates. They make their real money by investing our premiums. If they are pessimistic about near-term investment growth (can you say, 'Covid'?), they're going to raise rates.

Also, contrary to popular belief, liability isn't their major concern. Their big worry is the plane they're insuring. Don't believe it? Ask for the liability only rate (which is typically inflated a bit if bought without hull), and compare that to full coverage. 'Follow the money.'

I feel your pain on rates, though. For once, I'm not that sorry my rotary powered RV7 is taking so long to finish...

Charlie

#### Vigilant1

##### Well-Known Member
WRT to insurance in general: Do we know if insurers are getting reluctant to write hull coverage, liability coverage, or both? I'd be fine with dropping my hull coverage (this is a hobby airplane, and its loss wouldn't be the same as losing my house, etc).

For a lot of folks, if they can't get liability coverage they can't even keep their plane at a typical muni airport.

HBA Supporter

#### TFF

The RV and certified are not as bad off. One offs or if you have money and are flying something like a Citation or a TBM on a private ticket are getting hammered. More than two seats starts going up. A friends Grumman and another’s RV are still about $1500. The last two helicopter quotes I heard was new to helicopter but high time 747/F16 pilot in a 1978 piston$17,000 and a relatively high time private with a turbine, $33,000. The turbine guy probably won’t be able to get insurance next year unless he gets a commercial license. #### Wanttaja ##### Well-Known Member Ron - Thanks for the info. The fact that none of these were fatal should speak highly of the basic airframe. It is built like a brick out house. Certainly, a stout airframe and a good harness will help. But the fatality rate in engine-failure instances is quite a bit lower. About 33% of all accidents begin with a loss of engine power, vs. about 22% of fatal accidents. This chart shows what percentage of each type of accident has minor or no injuries, serious injuries, or fatalities. Note that the fatality rate for "Engine Mechanical" is a lot lower, as is the rate for fuel system problems. When you think about it, we do a LOT of training for engine failures. There's a lot of student instruction on it, and shore 'nuf, the CFI is going to pull the throttle at one point during our BFRs. So we SHOULD be a lot better at engine failures than other trials a homebuilt pilot might face. We train for it, we practice it, and all we have to do is *one* landing. The key factor is *maintaining control of the aircraft*. It's tough. The prop is stopped, the trees are getting closer and closer, and maybe with juuuust a little back pressure you can make that clearing. But it's a reaction we have to fight; it's better hitting the trees shallowly at 70 MPH than straight down in a stall. But again, it's easy to total the hull and not have a fatality. Hence Byron's comments about the dangers of under-coverage. Say one has a homebuilt worth$200,000, but you only insure it to $100,000. You have an accident, mung it up a bit, and get ~$60,000 worth of damage. That's 60% of the insured value.

The insurance company decides to total the aircraft (remember, it's their decision, not yours). They give you the $100,000 you insured it for, and put the damaged airframe up for auction. With all the avionics, and (potentially) an engine with minor damage, they might be able to sell the wreckage for$80,000 or so... thus being out only $20,000 on the deal. You, of course, are out an airplane and have only half the replacement value of your bird...... If you insure it for full value ($200,000) and it gets \$60,000 damage, the insurance company either ponies up what it'll take to repair the aircraft, or you get a settlement for the actual value of the plane.

Ron Wanttaja

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#### pantdino

##### Well-Known Member
WRT to insurance in general: Do we know if insurers are getting reluctant to write hull coverage, liability coverage, or both? I'd be fine with dropping my hull coverage (this is a hobby airplane, and its loss wouldn't be the same as losing my house, etc).

For a lot of folks, if they can't get liability coverage they can't even keep their plane at a typical muni airport.
This is my main concern. No liability insurance, no airport use.
I could eat the hull loss.

#### pantdino

##### Well-Known Member
One thing I have noticed is that I am not aware of a single accident that resulted in a fire.
Probably much more survivable if you are knocked out, recover consciousness, and climb out than if you burn while you're unconscious.