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In a new report released today, a leading broker in the aviation insurance specialty market raises the alarm about fast increasing insurance rates. The report indicates rate increases between 20% and as high as 100% are coming fast to aircraft owners and commercial aviation operations. These rate increases are driven by many years of a soft-insurance market, higher aircraft repair costs and a new trend in litigation awards which are more frequently awarding maximum policy limits.
According to the article, published by BWI Aviation Insurancehttps://bwifly.com/aircraft-insurance/aviation-insurance-market-update-june-2020-insurance-rates-rising-fast/ aviation insurance carriers are increasingly raising rates with significant bumps over renewal premiums. The aviation insurance market typically runs in multi-year cycles of higher premiums, stricter underwriting guidelines and fewer carriers for about 8-10 years before swinging back in the other direction. In 2016 there were nearly 20 different aviation insurance carriers in the United States and by the end of 2018 that number had dropped to only 11.
According to Matt White, owner of BWI Aviation Insurance “Compounding the problem is the low number of aviation insurance providers in the market. There is simply not a lot of room for one provider to undercut the rest and survive. If you pull up to a gas station and some guy whispers from the shadows, “hey, want some cheap aviation insurance?” Please do not be fooled. Increasing premiums are where the true market is at and it will likely continue throughout 2021. “
Owning an aircraft for private individuals is already an expensive hobby. With increased fuel prices, the ADS-B requirement and now rising aviation insurance rates, many aircraft owners may struggle to continue funding their beloved hobby. Many aircraft owners want to know when will they see some relief on these rising prices. Most industry experts agree that the first signs of relief may come towards the end of 2021 but others aren’t convinced. Insurance carriers have to constantly evaluate litigation costs, rising repair costs not including the added effects to the COVID-19 pandemic and even the recent civil unrest. All of these contribute to the prices and market fluctuation for aviation insurance.
For now the best that any aircraft owner can do is to consult with an experienced aviation insurance broker and maintain pilot proficiency. With increased underwriter guidelines, it’s more important that every to maintain currency, build make and model hours and have the right aviation insurance broker to advocate for you.
Release ID: 88961287