Underwriters consider many factors when deciding what premium to charge a pilot to insure his airplane. But increasingly the age of the pilot is a big factor. In fact, for many underwriters, there is a maximum age cutoff for a pilot where the company will not issue a policy for any price.
I just renewed the policy on my airplane and the premium was almost exactly the same as the year before. So was the coverage in the policy. I have thousands of hours of time in the airplane type, and I do formalized training at least every two years, if not every year. In the past year the training was the excellent program offered by the American Bonanza Society specifically designed for pilots of Bonanzas, Barons and Travel Airs.
In other words, I do what the underwriters like. I fly frequently, have lots of experience, and train regularly. But before too long that may not be enough to be insured.
My airplane insurance agent is one of the most experienced in the business. In fact, Larry told me he just turned 90. If there is an older active insurance agent I haven’t heard of him.
But Larry was in a lather because the underwriter I have used for decades, and I believe is the biggest in the business, had just put an age 69 cap on new pilots it will cover. A pilot’s age has always been a risk factor to consider, but this hard ceiling at 69 was new.
The key here is that the age cap only applies to pilots who are new to the underwriter. If you have purchased insurance from them steadily as you age, the 69th birthday is not a deal breaker. But if you are shopping around and have had your 69th birthday this underwriter is not interested in selling you airplane insurance.
It is essential to understand the difference between an insurance agent and the underwriter. The underwriter is the company that actually issues the policy and stands behind it. The underwriter is the one who sets the standard for pilot qualification, and also establishes the terms of coverage such as the amount of liability protection, how the liability may be divided up, and the amount of hull coverage.
The insurance agent—or agency—is the underwriter’s representative. The agent collects information on the pilot and aircraft and then shops it around to underwriters who may be interested. Agents and agencies, including the EAA Insurance Agency, are independent from underwriters.
The way aircraft insurance is sold is similar to a real estate transaction. The agent matches up the buyer and seller and collects the necessary information to close the deal. Just as a good real estate agent does their best to get a quick sale at the highest price for a home seller, the insurance agent looks for the coverage most suitable for the pilot at the best price.
It’s all well and fine for your agent to shop around looking for a new deal from different underwriters from one year to another when you are younger, but if you plan to keep owning airplanes into your later years, you really should try to lock in on one underwriter before you get too old.
What is too old? I would say that by age 60 you should develop a consistent business relationship with the same underwriter and stick with it. The actual age where an underwriter will not sell coverage to a new insured varies, but you can bet it’s lurking somewhere beyond age 65.
To lock into an underwriter you need to tell your agent or agency that you only want to deal with that same company. That may not be as easy as it sounds because underwriters enter and exit the general aviation market unpredictably depending on all sorts of economic factors. And there are mergers and acquisitions that roil the market. So your best shot for continuity as you age is with one of the underwriters with a longer history of insuring general aviation aircraft.
I know there is no solid evidence that older pilots are a greater risk. In fact, we probably take fewer risks in our airplanes as the years go by. But that’s neither here nor there. Underwriters get to call the shots. It’s their money at stake so they get to pick who they will cover. And increasingly they are unwilling to take on older pilots who have not been clients all along.