The King Air insurance market has been on a tumultuous journey over the past several years with plenty of unexpected twists and turns. This has not necessarily been the most expensive hard market the King Air community has navigated through, though it has certainly been the longest. Since 2018, most of you have likely seen reduced coverages and increased premiums with each renewal. It was considered a ‘win’ if you could keep your rate flat. In the May 2018 issue of King Air magazine I wrote that the soft market had come to an end in 2017. Finally, almost seven years later, we see a promising shift on the horizon: We expect 2025 to bring a softening market.
Many King Air owners remember a time when insurance was more favorable. Higher liability limits, flexible training options and minimal price differences between FAA Part 91 and Part 135 operations were the norms. Upgrading from a Baron to a King Air was a straightforward process, with few hurdles to overcome. Unfortunately, the landscape has changed significantly due to various factors, including rising aircraft values and the increasing costs associated with parts and labor for repairs.
The shift to a soft market is primarily driven by an increase in capacity within the insurance sector. More carriers are entering the market, eager to compete for your business. This influx of competition is a welcome change for King Air owners, as it opens up new opportunities for securing better coverage at more favorable rates. However, the challenge lies in reconciling the hull values of the 2025 King Air market with the insured values from 2015. While the actual premium dollars may not see a dramatic decrease, the rates per thousands of insured value are expected to decline, providing a better value proposition for aircraft owners.
Sample aviation insurance policy
D. Aircraft Hull and Liability: Tenant shall at its expense maintain Aircraft Hull and Liability Insurance. The aircraft hull insurance shall be all risk, including war, in an amount of at least 100% of the replacement value of the owned Aircraft and shall provide a waiver of subrogation by Tenant’s insurer against Landlord. The aircraft liability insurance shall include war risks liability insurance and shall be in an amount not less than $100,000,000 each occurrence. The aircraft liability insurance shall name Landlord as an additional insured.
Trends we saw during the hard market
Interestingly, the softening market is not solely a result of reduced losses. While catastrophic losses, often referred to as “bell ringers,” are relatively rare, the insurance industry continues to grapple with attritional losses. These losses, including incidents such as hangar rash, foreign object debris and hot starts, can accumulate and cost insurance underwriters millions of dollars each year. Adjusting these partial losses remains a significant expense, particularly as shop rates and the pricing of OEM parts continue to rise. Inflation has made it increasingly difficult for underwriters to manage these costs effectively.
During the hard market, insurance carriers were focused on reducing their exposure and increasing their pricing structures. This led to a situation where some King Air operators found it challenging to secure policies, especially those wishing to operate single-pilot. The industry began to see the emergence of “quota-share” or “vertical” placements, where one insurance carrier would provide the primary policy and additional carriers would agree to share the risk. While common in the airline industry, this practice had been relatively unfamiliar territory for the King Air market until recently. As a result, brokers often had to find multiple carriers to share the risk for single-pilot operations with hull values exceeding $5 million or liability limits over $25 million. This effectively halved the number of competing markets, exacerbating the challenges faced by operators.
Underwriting companies also took a closer look at the attritional losses within their portfolios. They observed a trend where fixed base operators required King Air owners to sign contracts that absolved the FBO of liability for any damage to the aircraft. This shift placed the burden of repair costs squarely on the aircraft owner’s insurance policy. Consequently, many carriers began charging additional premiums for policies that included “waiver of subrogation” language in hangar leases, further complicating the insurance landscape for King Air owners.
The implications of these changes extended beyond pricing and coverage structures. The cost of adjusting claims increased as King Air owners relied on their own policies to cover damages. Extra Expense coverage became a critical component of many policies, but insurance carriers began capping the amounts they would pay per day to mitigate their exposure to attritional losses. Additionally, underwriters started to refuse coverage or impose additional premiums for operators engaged in dry leasing their King Air to third parties, recognizing the added liability risks associated with such arrangements.
Sample aviation insurance policy
8. Replacement Aircraft / Extra Expense – If an Aircraft shown in item 5 of the Declarations sustains Physical Damage to which this Policy applies, the Company agrees to reimburse you for Extra Expense associated with obtaining a Replacement Aircraft for use while the damaged Aircraft is being repaired. The Company’s limit of liability under this extension shall not exceed $5,000 per day for up to five (5) days.
Training requirements and pilot qualifications also came under scrutiny during the hard market. The age of pilots became a contentious issue, with some experienced King Air pilots facing significant premium increases and reductions in liability limits as they reached age 75. This prompted many operators to develop long-term transition plans to manage the perceived risks associated with aging pilots.
Be a strategic insurance consumer
As we move forward and leave behind the painful experiences of recent insurance renewals, it is essential for King Air owners to adopt a more strategic approach to securing coverage. With new markets entering the scene and bringing more options, now is the time to assess operational risks to take full advantage of the emerging buyer’s market in the 2025 insurance landscape. King Air owners should consider the following key factors.
Are single-pilot or crew operations the best fit for your mission? Each option comes with its own set of risks and benefits, and understanding these nuances is essential for making informed decisions.
Are your pilots and maintenance technicians employees or 1099 contract professionals? Employment status can have significant implications for insurance coverage and liability, and it is essential to ensure that all personnel are properly classified to avoid potential issues down the line.
For those with pilots over age 65, proactively engaging in discussions about managing perceived risks associated with older pilots can help mitigate concerns and demonstrate a commitment to safety. Creating a long-term transition plan that outlines steps to address these issues can also be beneficial.
Review contracts with FBOs and other third-party service providers. It is essential to understand whether you are unnecessarily assuming liability for the negligent behavior of these entities. By clarifying responsibilities and ensuring that contracts are fair and equitable, owners can protect themselves from potential claims that were not their fault.
Analyze any existing dry leases to determine whether they need to be implemented, modified or canceled altogether. The added liability risks associated with dry leasing can have significant implications for insurance coverage, and it is crucial to address these concerns proactively.
Evaluate whether your current training provider and intervals align with your operational needs. Exploring alternative training options may yield better results and enhance overall safety.
Finally, it is essential to examine ancillary coverages to determine their relevance and importance. For instance, Extra Expense coverage can be an asset, and owners should assess whether increasing or decreasing these coverages could provide additional benefits without incurring extra costs.
As we approach the buyer’s market, King Air owners must proactively review their policies, risk profiles and available options. Engaging in open communication with brokers and underwriters will yield the best results and potentially reduce premiums in 2025.
In conclusion, the King Air insurance market is undergoing a significant transformation. As we move away from the challenges of the hard market, there is an opportunity for owners to secure better coverage and more favorable terms. By adopting a strategic approach to risk management and actively engaging with their insurance broker and carriers, King Air owners can navigate the changing market tides with confidence and foresight. The key to success lies in being prepared, informed and proactive in securing the best possible insurance coverage for your aircraft.
Kyle P. White, ATP & MEII, is an aviation insurance executive for a global insurance brokerage company. As a former professional King Air captain on BB-1118, he still enjoys flying his family’s J-model Bonanza and Piper Cub. He can be reached at kpwhite816@gmail.com.