How The Aviation Insurance Market Works
Do you get frustrated when you call for a quote on your aircraft insurance only to find out the market has been "blocked"?
The US general aviation market place is very unique because it is so small. Look at these statistics and compare them to the huge auto and homeowners market where there are hundreds of insurance companies and thousands of agencies:
- Civil aircraft - 224,000 (est.)
- Insurance Companies - 15
- Aviation Insurance Agents - Hundreds, but beware! For many insurance agents, aviation is only a sideline to other types of insurance, and they don't have full access to all markets.
What does a "blocked" market mean?
If agent "A" submits your quote request to the insurance markets, and then you contact agent "B" to obtain additional quotes, agent "B" will be "blocked" from getting a quote from the same markets. The handful of aviation insurance companies will only provide one agent with a quote. They have to do this out of sheer defense of their administrative overhead.
Further, not all companies will quote all risks and not all agents work with all markets. This is why it is important to select an experienced aviation insurance specialist who deals with the major underwriting companies.
Likewise, submitting the wrong or incomplete information initially to an underwriter can lead to inaccurate pricing or worse yet, no quote at all.
Ultimately, you as the client have the right to deal with an agent of your choice. If the need arises to change agents, this can be accomplished with an "agent of record" letter. This form letter authorizes the companies previously approached by another agent to release your quotes to your agent of choice.
Fortunately, thanks to technology advancements and the Internet, most of the general aviation underwriting companies are moving away from “blocking” the market. This has helped foster a more competitive environment beneficial to the consumer.
How to choose your aviation insurance agent
As stated earlier, it is important to deal with an aviation insurance specialist. This is one area of insurance where it pays to have a specialist. Not only will you have access to all the major markets to obtain the best price and coverage, chances are you will be dealing with a fellow pilot/aircraft owner who understands your unique needs. Questions you should ask a prospective agency are:
1. How long have you been in business?
This speaks for itself. Having someone experienced on the other end of the phone makes all the difference in the world when servicing your policy and more importantly, addressing a claim.
2. How many insurance company’s do you have access to?
Having access to all the major markets is a big plus in order to get the best coverage along with the best price. Some agents only have access to a few of the aviation insurance companies.
3. Are you shopping all the insurance companies at renewal?
We have discovered that some agencies do not shop the entire market at renewal. This is either because they do not have access to some of the markets or they are just being lazy. Your agency should be able to give an account of what companies quoted at renewal.
Don’t let insuring your aircraft bring you down or frustrate you. Deal with an experienced agency that will walk you through the available coverage options and company choices.
IFA Aircraft Insurance Program Agency of Choice
After doing its due diligence of the general aviation insurance agencies, IFA chose Aviation Insurance Resources (Air-Pros) as its agency of choice to administer its aircraft insurance program. Aviation Insurance Resources is an independent aviation insurance agency that has more than 180 years of combined experience insuring all lines of aviation insurance. It is licensed in all 50 states with regional offices across the country. Learn more.
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