Sept. 14, 2020
Recent dramatic increases in aircraft insurance premiums are just one more challenge aircraft owners and operators are dealing with this year. A new white paper entitled, “Four Questions to Ask When Renewing Your Insurance Policy,” by NBAA Domestic Operations Committee Vice Chair Eric Canup is now available to members on the association’s website, offers a case-study example of how businesses can reduce their insurance costs.
Suggestions offered in the paper include:
- A regular review of insurance coverage, starting with your insurance agent. Depending on how they’re compensated, brokers sometimes may offer more expensive coverages, even when you ask for a less costly plan. Don’t let a long-term relationship with a broker steer you away from cost savings.
- When shopping for insurance from various underwriters, choose those who are highly rated financially. These ratings, which vary, can affect your premium. They also indicate an insurer’s ability to pay on claims.
- Look for an underwriter who will take the time to get to know your business.
- Carefully review each underwriter’s proposal to ensure the coverage they’re offering fits your business and avoid paying for coverages you don’t require.
- Make sure you review with your broker the standard premium reductions each underwriter offers for risk mitigation tools that are more widely recognized, such as training frequency, the presence of an SMS or IS-BAO certification.
- Review aircraft hull values in your coverage, since most aircraft decrease in value over time. An underwriter who is not on the hook for a hull value that’s as much as when the plane was first purchased can pass their reduced risk on to you in the form of lower premiums.
“Earlier this year, we went through the process of evaluating our existing insurance relationship with another provider, and what I discovered convinced me that a change was long overdue,” added Canup, senior vice president – head of operations at Live Oak Bank. “There are things you can be doing right now to at least mitigate the impact of insurance premiums on yourself or your employer.”