Fly safe, pay less

Like all aircraft owners, I call my broker every year, update the annual application with flight times and any new ratings, and, within a few days, I receive several quotes offered by one or more insurance underwriters. With some advice from my broker, I select the quote that best fits my type of flying, then receive a notice that my policy is “bound”—good news—and then I get an invoice and pay it—not always good news. I deal with my broker, and they deal with the aviation insurance underwriters. I cannot remember ever having to communicate directly with the underwriter who provides the coverage (you may have had a different experience if you are covered by Avemco, one of the few direct-to-consumer underwriters).

The insurance industry is far more complex and globally interconnected than what I experience every year. From my perch in the AOPA Air Safety Institute, I am focused on driving the general aviation accident rates down, which we’ve been doing successfully for three decades. Safety is the essential ingredient in lowering aviation risk, and aviation insurance underwriters are in the business of insuring our aviation risk.

If you borrowed money to buy your aircraft, your lender probably specified requirements for insurance. My lender required exact coverage and deductible limits. They also required evidence of insurance on or before the date that funds were released. Had I paid cash for the aircraft, I would still have to satisfy state liability insurance statutes, but I could have chosen (foolishly, in my opinion) not to insure the hull value.

There are more than 100 aviation insurance agencies (brokers) in the United States serving the insurance needs of GA aircraft and pilots. These brokers present your insurance application to “the market,” which comprises about 28 aviation insurance underwriters. The underwriting companies are the ones who actually pay a claim. The “market” is international, with underwriters based in New York City, Munich, London, Tokyo, and elsewhere. Sharing the risk with these underwriters is the international reinsurance market. I intentionally simplified this summary of the insurance business to show that GA aircraft insurance premiums and claims are a very small part of the global insurance industry. This is why global crises like the Russia-Ukraine war and the two Boeing 737 Max 8 crashes in 2018 and early 2019 had an impact on the premiums we pay on our GA aircraft.

How can a war in Ukraine affect my premiums? International sanctions prohibiting the supply of aircraft or parts to Russia, followed by a Russian expropriation of hundreds of foreign-leased aircraft, have led to hundreds of aircraft stranded in Russia. These resulted in hull losses and large insurance claims. Similarly, the two 737 Max 8 crashes, which occurred outside the United States, resulted not only in 346 fatalities but also caused the grounding of all 737 Max 8s, a halt to the Boeing assembly line, and financial effects on airlines, airports, and businesses. The resulting insurance claims are huge and still being resolved. The underwriters (and reinsurers) who insure our aircraft also insure aviation, maritime, commercial, and other risks globally, and these crises have caused unexpected insurance losses. The premiums we pay, and the claims paid out, for GA aircraft are a very tiny slice of the very large global insurance market—and no segment of the insurance industry appears to be insulated from global impacts.

According to Sky Aviation Insurance, the cost of claims is also rising because of rising repair costs, social inflation (tripling of liability claims from 2007 to 2022), and supply-chain disruptions. This is why our GA premiums rose 15 percent per year between 2019 and 2021, 11 percent in 2022, 7 percent in 2023, and about 5 percent in 2025. Insurance industry analysts say that premium increases are leveling off now, but they do not expect premiums to go down anytime soon.

AOPA meets annually with leaders of about 20 aviation insurance underwriters to present GA industry trends and accident and insurance claim analysis. During these high-level meetings, we represent our members and work to resolve the issues they raise.

So, what can you do to protect your insurance premiums? Avoid filing a claim, practice good aeronautical decision making, seek recurrent training to improve your stick and rudder skills, and maintain your mental and physical health. The more your broker and underwriter know about you and your flying habits, the better your chances of keeping your insurance rates low.

Stay focused and stay safe!

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