Insurers May Continue To Offer Coverage In Weak Market

In the aftermath of Jimmy Leeward's crash at the Reno Air Races on September 16, much of the speculation has focused on whether lawmakers or regulators will put an end to the event and others built on the same model. But they may not have to. The tragedy's impact on the insurability of air races in general, and Reno in particular, may be a faster-acting force.

Dan Reynolds, senior editor of Risk & Insurance Magazine, in a September 27 article on the publication's website cites newspaper reports that the event had $100 million in insurance through Lloyds of London, and that may not be enough to cover the claims, given the number of fatalities and injuries. He quotes Finley Harckham, a New York-based insurance recovery partner with Anderson Kill & Olick, who says, "I could easily see this exceeding that limit."

But in a scenario which might otherwise make the event uninsurable going forward, its ironic savior might be the recession. Steve Johns, president of aviation broker LL Johns & Associates, tell Reynolds the aviation insurance market has been very soft, resulting in premium rates 40 percent below 2002 levels.

Reynolds notes that other factors which will get a look from underwriters are the representations made regarding the airworthiness of the modified P-51 and the health of the pilot, and the fact that many of the casualties occurred not in the designated seating area, but among spectators who'd pushed out onto the ramp.

Read the complete analysis using the FMI link below.

FMI: www.riskandinsurance.com/story.jsp?storyId=533341612&topic=Main