Any insurance plans for high-deductible, low premiums?

On Sunday, January 18, 2015 at 6:45:19 PM UTC-5, wrote:
Hank, what am I missing? I understand my own choice is more severe, but his inquire was for a $3K deductible.
Value Damage Insurance Deductible Action Settlement Net Cost
$70,000 $60,000 $67,000 $1,000 Repaired $59,000 -$1,000
$70,000 $65,000 $67,000 $1,000 Repaired $64,000 -$1,000
$70,000 $67,000 $67,000 $1,000 Totaled $66,000 -$4,000
$70,000 $70,000 $67,000 $1,000 Totaled $66,000 -$4,000
~Barny

What you're missing is the fact that the insurance company will generally draw the line at something in the neighborhood of 70% to maybe 80% of the insured value before calling the deal a "total" ($50k-$55K in your example). In that case, they figure they're better off paying you the insured value, taking the glider AND all of the instruments as salvage, then bidding out the salvage. So, each of the above examples would end up with you no longer owning the glider. Repair shops love these situations, because it enables them to bid on wrecks that can be rebuilt and sold at a decent profit.

That aside, the example isn't really accurate anyway. In fact, the rating is is a little more complex. While there is a "per X of insured value" component, there are other factors included. Still, at something in the neighborhood of $40 to $80/1000 of insured value, trying to finesse your coverage to save $100 to $200 against $70K asset seems like a poor bargain.

FWIW, I asked a bunch of questions like this when I was working on project for a major commercial carrier with an aviation business. It turns out that small programs like ours tend to be pretty marginal, especially as the value of individual sailplanes continues to escalate. So, the willingness to offer a lot of variations in the coverage is pretty minimal.

Papa3 wrote on 1/18/2015 5:42 PM:
On Sunday, January 18, 2015 at 6:45:19 PM UTC-5,
wrote:
Hank, what am I missing? I understand my own choice is more severe,
but his inquire was for a $3K deductible. Value Damage Insurance
Deductible Action Settlement Net Cost $70,000 $60,000 $67,000
$1,000 Repaired $59,000 -$1,000 $70,000 $65,000 $67,000 $1,000
Repaired $64,000 -$1,000 $70,000 $67,000 $67,000 $1,000 Totaled
$66,000 -$4,000 $70,000 $70,000 $67,000 $1,000 Totaled $66,000
-$4,000 ~Barny

What you're missing is the fact that the insurance company will
generally draw the line at something in the neighborhood of 70% to
maybe 80% of the insured value before calling the deal a "total"
($50k-$55K in your example). In that case, they figure they're
better off paying you the insured value, taking the glider AND all
of the instruments as salvage, then bidding out the salvage. So,
each of the above examples would end up with you no longer owning the
glider. Repair shops love these situations, because it enables them
to bid on wrecks that can be rebuilt and sold at a decent profit.

That aside, the example isn't really accurate anyway. In fact, the
rating is is a little more complex. While there is a "per X of
insured value" component, there are other factors included. Still,
at something in the neighborhood of $40 to $80/1000 of insured value,
trying to finesse your coverage to save $100 to $200 against $70K
asset seems like a poor bargain.

FWIW, I asked a bunch of questions like this when I was working on
project for a major commercial carrier with an aviation business.
It turns out that small programs like ours tend to be pretty
marginal, especially as the value of individual sailplanes continues
to escalate. So, the willingness to offer a lot of variations in the
coverage is pretty minimal.

As I understand it, the premium is not directly proportional to the
insured value; ie, insuring a plane for $50,000 instead of $100,000 will
not cut your premium in half, but by much less than half. The rationale
is most insurance claims are for much smaller amounts than the insured
value. That's also the reason a high deductible can make a significant
difference in premiums: the company doesn't have to mess with a lot of
small claims (the majority of the dollars they pay out), and that are
also relatively expensive to process.

So, knocking $3000 of the insured value would not save you nearly as
much on the premium as a $3000 deductible.

--
Eric Greenwell - Washington State, USA (change ".netto" to ".us" to
email me)
- "A Guide to Self-Launching Sailplane Operation"
https://sites.google.com/site/motorg...ad-the-guide-1
- "Transponders in Sailplanes - Feb/2010" also ADS-B, PCAS, Flarm
http://tinyurl.com/yb3xywl