On Thu, 14 Jul 2005 03:11:19 -0400, "TaxSrv"
wrote:

"OP" wrote:
Ah, I think you may be forgetting that the insurance company has
lawyers on staff or on retainer. There is no extra cost involved
for them to pursue a law suit. As for "bad word of mouth" they
couldn't care less... all insurance companies have the same policy,
namely, recover costs and minimize losses in their quarterly report.

Ron


My only argument is experiernce in tax and accounting since 1960.
Lawyers on staff or retainer have a real cost, according to what
workoad you give them by company policy on how much potentially
wasteful activities they should pursue. And to suggest to that bad
public reputation has no effect on profits is really naive. If you
drop and break merchandise in a store, what's the better decision in
approaching that embarassed customer? That's small dollars, so that's
easy.

I agree, that for small dollar damages, (dropping and breaking
something in a store), or maybe even dinging a wingtip while
parking, the insurer might make a cost-benefit judgement and not
come after the renter. But if you get a prop strike or bend a wing
spar and the damages go upward of $30,000 or $40,000, I think the
insurance company is coming after the renter to recoup as much of
their costa as they can.

But airframe damage to aircraft are small dollars per incident too in
the industry, relative to the big payouts on personal injury/death
liability. The latter is so potentially deleterious to shareholder
interests, the industry has to universally lay it off with like Lloyds
of London, the "reinsurance" market under the concept of large pooling
of risk. It's actually all explained in detail in the SEC 10-K
filings of aircraft insurers, unlike the auto insurance industry where
this isn't necessary. Even there, have you ever heard of an auto
insurance company going after an uninsured motorist for the insured's
vehicle damage with litigation? Keep it real.


I think uninsured motorists are completely different. Most
uninsured motorists have no money, no assets, some even have no home
address. If you are renting an airplane from any FBO around here, I
can guarantee they will have an address, credit card number and
enough personal information about you to find you.

I respect your experience in tax and accounting. I may have
misinterpreted your original post, but you seem to be saying that
the FBO's insurance company will not come after the renter in the
case of airframe damage that is the fault of the renter. I've had
too many people, including FBO owners and insurance agents, tell me
different. I guess it all comes down to the level of risk you are
willing to accept. I tend to err on the side of caution.

Ron