Michael,
You got good advise back when you got it.

When was that? I guess I'm really amazed how you are able to
determine when I got that advice.

The advise you described is about ten years old (give or take five)
and was the common approach back then.

The aviation insurance market has changed so much in the
last decade that it is not possible to get enough insurance to make
oneself a "target".

A million dollars is a pretty inviting target. On contingency, that's
$300K-$500K in the pockets of the attorney - worth a long shot.

Actually a contingency is one third, after expenses. Once you figure
in the time involved in putting together the suit, unless the damages
are huge and liability is a slam dunk, and the fact that the
plaintiff's attorney has to bankroll the case for two to five years,
it's not enough money to make a person a target. In this day an age,
it simply isn't.

Now, if you have the assets to own an airplane,
you have the assets to be a target.

Maybe that's the case if your airplane is an impulse purchase. For
most people I know, the airplane is the major asset - one they had to
borrow to purchase. I suppose that might be because I'm not an
attorney and don't know too many pilots who are.

With most people I know, once you take the house (if any) and the
airplane out of the picture, there's simply not much there in the way
of assets.

That's why insurance has to be a part of an objectively thought out
risk evaluation for each pilot. For the folks you know, $100,000
sublimits may very well be adequate. In my observation, for most
airplane owners, they are not.

You are correct that a
plaintiff's attorney will not go after a dry hole; the problem is that
sublimits of $100,000, is not enough to stop an attorney from going
after the owner's assets should there be a serious injury or death.

You're not making sense. If the owner is a dry hole (or close to one)
$100K is about all there is. Are you telling me a plaintiff's
attorney will pass up a $100K settlement to roll the dice on a
possible $200K? Now if we're looking at assets in the $1M range,
that's another story. I don't know too many light plane owners in
that range.

The problem is perception. If there damages are large, the
planitiff's attorney will simply take the $100,000 (the insurance
company can settle by paying limits without including the pilot in the
settlement, although that can vary, what your insurance company can do
is in the contract), use it as a war chest and go after the pilot's
assets, if there is reason to believe they are worth pursuing. If the
pilot does not have such assets, the $100,000 sublimit may be
adequate.

The fact that a person owns an airplane is a pretty good indication
that there are assets to be reached in the event of a suit, even if it
is the insurance check that went to the owner to pay for the airplane
after the crash.

That's less than $100K in most cases, and most people have a note so
the bank gets paid first and immediately. Go try to get that money
after the bank has it...

You know, there are those who can easily afford aviation, and there
are those who can only afford it because they make it a priority. I
think your advice may be relevant to the former group, but not the
latter. It's a very rare individual who makes enough money to support
a family, own an airplane, and have anything at all left over for the
lawyers to take.

That is a matter for each individual to evaluate. I've simply
observed that by the time a person with a family is able to own a high
performance airplane, that person has enough in the way of assets that
for him or her to protect the family financially, $100,000 sublimits
are not adequate for the task, it leaves to much at risk. By simply
paying a little more for insurance and getting smooth coverage, the
risk drops. Whether that is appropriate is an individual decision and
should be taken, in my opinion, with due regard for one's family.

Yes, some owners have structured their assets to get
them beyond reach of a lawsuit, or they think they have. They may
have moved them offshore, illegally, and the lawsuit may lead to a
discreet call to the IRS by the plaintiff's attorney that buys the
owner an opportunity to defend an action by the IRS and potentially,
criminal charges.

Or they may have put them into a house, untouchable even in the event
of bankruptcy.

True, but rare, in my observation over the years.

As for plaintiff's attorneys who have a habit of dropping the dime on
those who have illegally moved their assets offshore, they have a bad
history of getting their knees broken. People willing to break the
law are, well, willing to break the law.

given up on getting any higher limits, because they are no longer
available.

Want to clue us in - WHY are they no longer available? Would it be
because insurance companies have figured out that the settlement will
be based on how much coverage there is, rather than how much damage
was actually done? Would it be because they've figured out that the
increased coverage simply makes you too tempting a target?

The aviation insurance companies have only made a profit in about one
or two years of the last ten. Two have gone bankrupt. They have made
the decision to write lower limits and cocentrate on the $100,000
sublimit coverage for pilots because it makes them more money.

They have also simply stopped offering high limits because they lost
money on them. It was, in my opinion, based on observation, a
business decision. The aviation market is tiny, perhaps 250,000
airplanes out there, fewer than there are cars in a decent sized city.
The companies are competing for business in a small market and those
who were not extremely conservative in their underwriting have gone
under. Do you remember the Omni, back in the 1970s? They would write
about anyone flying anything for any coverage. They went under pretty
spectacularly. American Eagle had lower rates than most everyone and
offered some pretty high limits when others wouldn't. They went
under. The remaining companies stopped writing high limits because
they could not charge high enough premiums to make the risk
worthwhile.

Consider it as a simple matter of statitstics - if I'm wrong and the
amount of insurance is not a large factor in making you a target, you
could get $5M smooth simply by paying 5 times the rate for $1M smooth.

The amount of insurance can make you a target, it's just that a
million smooth isn't enough to do so (and that's only my opinion but
it is based on working in this business on a day to day basis). Ten
million might very well make you a target (although you still have to
have an accident for it to matter), and the insurance companies have
taken that option away from us.

It boils down to each pilot objectively analyzing risk and not simply
buying what is the least expensive. I've just seen too many pilots
get burned from doing so.

All the best,
Rick