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what we call “garagekeepers” and the cars can be covered under your aircraft policy if they are damaged while in your “care, custody and control.” Do you have enough liability coverage within your policy to cover such a loss? Your broker can address this exposure, as well as have the limits of liability for the “garagekeepers” amended accordingly.
Assuming you benefited from the lowest market rates in the past several years, 2018 is starting off to be the year of flat renewals. As you look ahead, think critically about your renewal. Through our observation of the current insurance market, not exclusive to just aviation, it appears the insurance industry has sustained significant losses through natural disasters and attritional losses (the losses you don’t read about in the NTSB reports, such as “hangar rash”). This tells us the insurance companies are putting a specific interest in being profitable this year.
How can we create a policy to benefit both the insured and the insurance company? One of the ways is through the Profit Commission On Renewal (PCOR) – an endorsement that can be added to your insurance policy. The PCOR endorsement is designed to do two things: First, it shares in the profit of your policy with the insured, assuming there are no losses. Second, it creates loyalty between the insurance company and the insured. In order to share in the profits from the expiring policy, you must renew it with the same carrier. For example, assume you pay $20,000 for your insurance policy and during the policy period there are no losses. The endorsement can read a couple of different ways, one of which is “10 percent of 70 percent of the earned premium.” This means upon renewal of your policy with the current carrier, you will receive $1,400 back. What a deal for everybody! The insurance company wins because you didn’t have any losses, and you win because you get some of your premium back, thus lowering your overall cost of insurance for the year.
There are over 30 ancillary coverages within your policy that should be reviewed and addressed with your broker annually. Every operator/owner has different needs based on their specific exposures – don’t take an “off the shelf” policy. Customize it to fit your needs, just like you did when you bought your King Air.
The market appears to be changing, but being aware of the changes will allow you to be strategic in your renewal negotiations. KA
Kyle P. White, an aviation insurance specialist,
is CEO of Aviation Solutions, a Marsh & McLennan Agency LLC company. He has professionally flown King Air 90s and B200s and holds an ATP and multi- engine instrument instructor license. You can reach Kyle at kyle.white@marshmma.com.
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12 • KING AIR MAGAZINE
MAY 2018