Hull/Liability Insurance Recommendations

(Rick Durden) wrote
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 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.

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.

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 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.

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.

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?

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.

Michael