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Choosing between agency and broker for aviation insurance
One of Australia’s largest and most diverse insurers, QBE, lists a range of aviation insurance products on their website, including insurance for aircraft (for owners and non-owners), hangar insurance, and even agricultural style and rotary winged (helicopters) aircraft. Aviation Insurance Brokers, meanwhile, has a range of extended products covering unique situations, such as marine transport of aircraft and components. The main difference between these two (and similar other companies) is that the broker essentially deals in one area, in this case aviation products (and associated industries). This means that you can be assured of dealing with someone that specialises in aircraft categorically, and not as an extra to home or business insurance.
As a rule, brokers will make judgement calls on a case by case basis. Using car insurance as a comparative guide, two car owners of a similar model will most often find their rates to be similar. However, with aviation insurance, brokers will work each application out individually, not using a common baseline. A broker can therefore tailor packages specifically to each individual’s situation, guaranteeing the best possible personal service. Specialist brokers such as Boston Marks have an extensive product range and, by working solely in the aviation industry, may offer more competitive rates than an agency covering numerous areas of insurance.
Naturally, rates vary for different craft within a class, for example a small dual seater will attract a higher premium than a large gas turbine craft. Rates to insure a helicopter may also be comparatively higher than a small airplane, since they are more likely to be “written off”.
Premiums for aviation insurance
If you were to get a quote to insure your 1928 Rolls Royce and match it against a 1988 Hyundai, you’d notice a substantial difference in price. As with cars, aircraft has many variables. Factors influencing insurance premiums for aircraft include (but are not limited to):
- Aircraft type and value
- Usage of aircraft
- Pilot’s experience
- If the craft is stored in a hangar or outdoors
An aircraft being used to train a new pilot would be considered a high risk craft whereas a pilot flying his own aircraft would be deemed a lower liability. Furthermore, the way that an actual craft is stored or used can affect the policy. For example, a “hangared” aircraft (one stored in a hangar), avoiding exposure to the elements and potential risks of damage or theft, is seen as lower risk. Additionally, a passenger transport is seen as lower risk than a small aircraft being used as a crop sprayer.
Aircrafts, helicopters and premises (hangars, etc) can all be covered under aviation insurance and policies can also include insurance for airport owner’s liability, a pilot’s loss of licence and instances of chemical drift. Aside from individually-owned planes, plans are also available for airlines wishing to arrange “fleet policies”, in order to blanket cover all operating aircraft in their charge. All policies may also cover personal injury and “war and allied risk” (including search and rescue costs), so check with your insurance provider. Given the considerable cost of aircraft and the relatively risky nature of air travel, aviation insurance is almost certainly an essential purchase.
