Rates Lowered On TAAs, Homebuilts
This week at Oshkosh 2007, Avemco's Executive Vice President Jim
Lauerman announced changes with the company's underwriting
standards and risk management approach. He provided updates on previous announcements made
at Lakeland earlier this year, and also announced new changes.
Avemco, the only direct aviation insurance underwriter, has been
insuring pleasure and incidental business-use aircraft for years,
and is one of the most popular insurance companies amongst the
general aviation crowd.
Lauerman, who is an ATP-rated pilot as well as a CFI, left a
previous career as a chief pilot and CFI for a Beechcraft dealer to
join the Avemco team.
"We came to the conclusion that we were overly conservative."
explains Lauerman with regards to the company's past rates for
technologically advanced aircraft. He also announced Avemco has
lowered rates on Columbia aircraft after studying the statistical
data they have been compiling on the somewhat new single.
Lauerman pointed out that insurance companies must be extremely
prudent with rates on new aircraft entering the marketplace, "or
you get torched on the loss side."
Avemco has also expanded underwriting criteria to help insure
transitional pilots, and available liability limits have been
increased to $1,000,000 with no sub-limit. EAA members should be
glad to know that rates have been reduced on homebuilt aircraft and
passenger liability is now available for them. The standard
$1,000,000 policy previously covered only the damages occurring
outside the aircraft.
Lauerman says the company has been writing LSA aircraft for over
a year, and that the LSA category "is a natural market for Avemco."
He mentioned the importance of larger manufacturers entering the
market place (i.e. Cessna), as this will allow for lower rates and
further legitimize the light sport aircraft concept for insurance
companies.
Avemco continues to sponsor the Airmanship Education Research
Initiative, which compiles insurance company statistics to look for
patterns in behavior. The founder Bill Rhodes hopes the patterns
apparent in the statistics will highlight the decision-making
characteristics of "expert" airmen, which can be used to educate
the rest of the aviation community. "The response has been really
satisfying." says Lauerman.
Over 11 saltwater-inundated aircraft were recently donated to
the Build-A-Plane Project, which Avemco also sponsors. As ANN reported, the
Build-A-Plane Project aims to introduce young people into aviation
by allowing them to work on aircraft.
Avemco's commitment to furthering the aviation community is
inherent in their mission. The company does not insure commercial
aircraft operations and with a declining GA base, the team at
Avemco is certainly aware of the potential economic impact of such
a decline.