MAULE INSURANCE

[flyer]

WHY IS MAULE AIRCRAFT INSURANCE SO EXPENSIVE?
A friend of mine owns a Cessna 180 which is valued at 80,000 and pays about $1500 per year. My Maule M-5, I valued it for insurance at $55,000, would cost me over $2300 per year for insurance. I think my plane is worth more but I was trying to keep the cost of insurance lower.

I have listened to their so called justification that Maule pilots have more accidents, are not as careful, etc. Yet we saw the remains of the Cessna at Big Springs. My friend destroyed his Cessna 180 this summer. There was a Cessna at Johnson Creek that was badly damaged. I see a lot of Cessna wreckage and we pay a lot more for insurance.

What type of SPIN do the insurance companies put on this?

flyer

[MikeW]

Flyer,

I'm not going to defend insurance companies but it is hard to make broad statements concerning rates due to the various pilot experience of each applicant. I pay $1600 per year to insure my M-4 at a hull of 50,000. That is through Global. In my research Avemco was the highest quote last year at about $3500. It's been my experience that any time I want to insure an airplane that is more than 200HP, four seats, and has a C/S prop, the rates start at about 1500 and wonder up to 4000 depending on pilots' total time and time in seat.

Mike

[flyer]

Mike

On this subject I think broad statements are fairly accurate. I will give you another example.

One year ago I flew a PA22/20 (tailwheel conversion) . My insurance was $850. I now fly my M-5. I fly out of the same runway to the same places. I have 30 more horsepower which, for me, means it is a little safer. I have over 100 hours in the Maule. I have over 1000 hours of tailwheel time. The lowest insurance quote was $2300. I realize the Maule is valued at twice as much as the Pacer. That does not justify 3 times the cost of insurance. They also would not give me as good a coverage as I had on the Pacer.

The insurance company said that Maules have more accidents. They inferred that Maule pilots are not as safe.

I will check with Global to see what their rates are.

Does anyone else pay a lower rate for insurance on their Maule?

flyer

[Lowflybye]

WHY IS MAULE AIRCRAFT INSURANCE SO EXPENSIVE?

What type of SPIN do the insurance companies put on this?

flyer

There is no "spin"..it is simply a number game. Insurance companies pay out a higher percent of claims on Maules than they do Cessna's or other types of tailwheel aircraft. It does not mean that they are more dangerous, or that the pilots are less qualified. It simply means that dollar for dollar collected the insurance companies pay out more in claims on the Maules. This means that to continue insurance Maules profitably they must charge more to cover the losses. It will not matter how much we complain about it...you cannot argue with the facts. The average annual premium that I see for $50,000 hull value and a pilot with decent time in a Maule is around $2,500.

On the other side of that coin, we can improve the statistics with recurrent training and staying proficient which will in turn improve our rates, but it will not happen overnight. Keep in mind that a Maule is a tailwheel that demands respect or it will bite you. With a relatively short coupling and a strong power plant with stiff p-factor, you have to stay on your toes at all times. Add to this fact that a Maule is one of the best deals going when a pilot is looking for a 4-place tailwheel for a decent price. This attracts a lot of new tailwheels pilots and so you have a lot of inexperienced tailwheel drivers out there that add to the accident / claims total.

http://maulepilots.org/forums/viewtopic.php?t=163

I wrote this article for our next magazine and am revising it a bit for possible publication in AOPA. Jeremy asked that I post it here on Maule Pilots since it may answer some of your questions. If you have any other questions where Maule insurance is concerned, feel free to give me a call at the office, (615) 435-8294. No strings attached.

-Chris

[flyer]

Chris

I read this statement of yours before. I appreciate your quick reply.

This is the same type of reason that we have heard before.

I would like to see the actual numbers that support this. How many Maule accidents and cost have occurred in the last year or 5 years? How many Cessna accidents were there?

Just because I have switched from one Brand of plane to another is that a reason for the rates to triple? Have I become less safe? Will I suddenly have a lapse in judgement because I am in a safer plane?

I think the way insurance companies figure these rates, statistics, etc. should be changed somewhat. I think that a pilot's indivdual safety record and experience should wiegh more heavily than the type of plane he is flying.

flyer

[MikeW]

Flyer,

It does seem that more performance in an airplane should equate to better safety margins, it certainly does when I'm out flying, but the insurance companies don't seem to get that. They are strictly numbers folks and apparently the higher the performance airplanes have more wrecks, or at least more claims. Also, most companies understand Maules are used more for backcountry stuff and that nudges the rates up too. The policies I found really vary regarding off'airport stuff. There are coverages out there if you want, or you can pocket that money and "self insure". I guess it boils down to what kind of flying you do, what you can afford and are comfortable with. Good luck,

Mike

[flyer]

Mike

Thanks for the response.

My point is that I think that Maule insurance is, probably, on the average $1000 more per year than a Cessna 180 of higher value. Maule does seem to have a lower operating cost. I THINK THAT ANYONE THINKING OF BUYING A MAULE SHOULD KNOW OF THIS HIGHER COST OF INSURANCE.

Like I said, I fly out of the same runway, to the same places with the Maule as I did with the Pacer. I carry the same weight. I only have 30 more HP. The same insurance company charged me $850 per year for the Pacer and $2300 per year for the Maule.

I have the greatest respect for Jeremy's knowledge and experience. As far as aircraft insurance, I do what he does.

flyer

[210TC]

I think the rate should drop after you own and fly a plane a couple of years with a few hundred hours.
I just obtain "ground only" insurance, which means the plane is only insured while in the hanger or setting still with the engine OFF. $1100/yr my regular insurance is $2600 apx, this went up about 500/yr when I moved from Califoria to Florida (Storms). I thought the rate would fall when I moved to Texas, NO the agent says Texas is in the Bad area also.
Anyway, something's fishy $1100/yr is double what it should be. The insurance co has NO liability other than the loss of the aircraft and my car is worth close to my plane it is 700/yr.
I just wanted to complain.

[Wirsig]

Self insure, (if ya can) and park it in the back yard!

[flyer]

I wonder if all the Maule owners got together and put $1000 into a self insurer account, if it would be enough to cover a year's losses. Maybe without the overhead of an insurance company, which must be extensive, it would work.

I do not mind paying a fair price for anything but I really hate it when I feel I am being ripped off.

flyer

[Lowflybye]

Chris

I read this statement of yours before. I appreciate your quick reply.

This is the same type of reason that we have heard before.

I would like to see the actual numbers that support this. How many Maule accidents and cost have occurred in the last year or 5 years? How many Cessna accidents were there?

Just because I have switched from one Brand of plane to another is that a reason for the rates to triple? Have I become less safe? Will I suddenly have a lapse in judgement because I am in a safer plane?

I think the way insurance companies figure these rates, statistics, etc. should be changed somewhat. I think that a pilot's indivdual safety record and experience should wiegh more heavily than the type of plane he is flying.

flyer

If that is the reasons that you have heard before then they were telling you the truth. If I had the access to the numbers then I would be glad to share them with you, but I do not. Keep a few things in mind with regard to the numbers in question: 100 Maule aircraft insured at an average of $2,500 per year will add $250,000 to the bottom line annually. If we have 25 Maules with a propstrike that year and no other damage the company will lose money on Maule Coverage. If there are 5 total losses in that year with no other losses, the company will lose money on Maule coverage. Keep in mind that the insurance companies are in the business to make money as well, not to provide a savings account and give you any additional money needed when there is a loss. You may not be the guy with the loss, but in insurance, the sins of the few are paid by the many. It is the only way to stay in business.

Comparing insurance on different models of aircraft is like trying to compare apples and oranges. There are tons more Cessna aircraft out there to insure than there are Maules. Parts are more readily available since there are many parts that are interchangeable from tricycle gear and tailwheel models. Every A&P out there knows how to work on a Cessna, but a good Maule mechanic can be hard to find. There are less first-time tailwheels pilots buying Cessna than Maule simply because of the cost involved. You could buy 3 good Maules for the price of a C-180. The Maules seem to find the back-country more often than the Cessna. The list goes on for the differences, but you get the idea.

These are considerations that go into the cost of insurance other than the overal losses paid. Yes, when you switch aircraft from one model to the next your premium WILL change, even when the aircraft has the same value. This is not due to your abilities, you have not become less safe and you will not suddenly have a lapse in judgement. It is due to the risk factors that the new aircraft falls under. The new premium may be more than your previous aircraft or it may be less. If it was less in your case I doubt we would be having this conversation. Each aircraft has a base-line premium that the underwriter starts from. From the base premium the underwriter will take many other factors into consideration to calculate your final annual premium. This is where your pilot experience, aircraft use, training history, airport, etc will become credits or debits from that baseline. Each company sets their own baseline for each aircraft based on THEIR loss history on the aircraft. This baseline is the average that the premium must be in order to write the aircraft and remain profitable. If an aircraft remains unprofitable for a company then they will simply pull out of the market for that aircraft. This is what has happened to the Maule for many companies. Out of the 12 underwriting companies out there, only about 5 of them are still willing to take the risk at the $2,500 average premium. The other companies will simply decline to quote the account.

In a perfect world a pilot’s safety record and experience would weigh the heaviest when figuring the premium. Simply put, the most accurate way to measure losses is to take the average in a specific risk type, which in our case is the aircraft type. This is the same in all insurance lines, whether it be cars, boats, homes, etc. Since that is the most accurate way to measure, it is the way that the baseline will always be calculated. Good, bad, or ugly...these are the facts.

This is just the way it is fellows, but don't shoot the messenger. I too have to pay my Maule insurance based off of the baseline average. The best thing that we can do for ourselves is teach the new Maule drivers the safe way to operate them, hold each other accountable and prevent "hey yall watch this" accidents. If we can lower the claim rates, the Maule can become a profitable aircraft for the insurance companies. This is the only way to cause premiums to lower since the markets will begin to compete for the aircraft if it is profitable for them.

I am doing all I can on my side to get underwriters to loosen up on the Maule aircraft, but until the claims numbers improve, my efforts will not amount to much.

By the way, just as a point of reference. Our Maule has had 3 owners since new in 1994. It has a total of about 200 hours on it since new and has had (1) ground loop that bent the right gear, wing, and got the prop. and it has had (1) propstrike requiring an engine and prop overhaul. None of these claims were mine, but you get the idea.

[Lowflybye]

I wonder if all the Maule owners got together and put $1000 into a self insurer account, if it would be enough to cover a year's losses. Maybe without the overhead of an insurance company, which must be extensive, it would work.

I do not mind paying a fair price for anything but I really hate it when I feel I am being ripped off.

flyer

If you ever have a big loss or a lawsuit you will feel your money was well spent. Everyone hates the insurance company until they need it. These fellows did not have insurance for one reason or another and the losses will exceed $1,000,000 through no fault of their own...a freak accident.

http://www.supercub.org/phpbb2/viewtopic.php?t=12929

As for your idea of a general bank account for all the owners...one lawsuit could totally wipe out the bank account. One fiery crash with burned survivers could do the same. That is part of what your liability coverage is for. At $1,000 per owner annually it would take 1000 owners to put enough money in the bank to pay one $1,000,000 liability claim and then the bank account would be empty for any other claims that year.

The risk management expertise to underwrite profitably and the financial backing needed to cover the total number of losses is huge. Aviation is a special bird of its own and hard to be profitable writing its insurance. This is why there are currently only 12 aviation insurance markets in the US compared to the hundreds that will write your auto, homeowners, etc.

Not trying to shoot holes in your idea, but many large companies have already tried and failed in the aviation insurance market. If it was as simple as a group of pilots having a bank account, then groups like AOPA, Cessna Pilots Association, and others would not go to the current underwriting companies to find coverage.

[flyer]

lowflybye

Thanks for your quick, long response.

If you had 1,000 Maule owners paying $1,000 per year, it would add up to a million dollars.

I agree with most of what you said.

It appears that many of the more experienced pilots who are very safety oriented are insuring themselves which means not getting insurance. They fly more carefully knowing they will have to pay the repair bills themselves. The pilots who feel they are at higher risk or for other reasons cannot do this.

I think that anyone thinking of buying a Maule should be made aware of the higher cost of aircraft insurance. You can buy a good Cessna 180 for less than $100,000.

I do love my Maule, but then I have loved every plane that I have owned.

Take care
flyer

[flyer]

Do supercub owners pay as much for insurance?


I do not argue the desireability of insurance. I disagree with Maule owners and Huskey owners having to pay such a higher price.

I have seen a lot of wrecked Cessnas but I have yet to see a totaled Maule. I know it happens. I would like to see the actual numbers.
I do not just take their word for it. I question their statistics.

flyer

[Lowflybye]

If you had 1,000 Maule owners paying $1,000 per year, it would add up to a million dollars.

We were on the same page..."At $1,000 per owner annually it would take 1000 owners to put enough money in the bank to pay one $1,000,000 liability claim and then the bank account would be empty for any other claims that year."

I hate to break the high premium news to a new Maule owner who bought the aircraft before they called me. It is like raining on someones parade.

By the way, I do not recomend against self insuring the Hull coverage if an owner chooses to do so. After all, insurance is just a way to transfer risk. If you can afford to replace your aircraft and choose to hold on to that risk then by all means do so. I do however strongly recomend against self insuring your liability risk. Nobody can afford a lawsuit, and a lawsuit is expensive just to defend, even when you are found to be not liable for the claims made in the suit.

Do supercub owners pay as much for insurance?

No, and a Bonanza owner will pay a lower rate than a Cessna 210 owner with the same hull value. Again, it depends on the amount of money collected minus the amount paid in claims for each model aircraft. This is known as the loss ratio and there is one for each model aircraft. It is determined by taking the total amount paid in claims for a specific model aircraft and dividing that number by the total amount of premium collected for that aircraft. If the loss ratio exceeds about 70% for a given model aircraft then it it not profitable to write it at the current premium. Somewhere around the 70% mark is the break even point for a loss ratio once the cost of doing business is paid...i.e. rent, payroll, expenses to adjust a claim (these are independent of the claim itself) The breakeven loss ratio for each aircraft varies by company.

I would like to see the actual numbers. I do not just take their word for it. I question their statistics.

I will try to get a copy of the stats if any of the companies will allow me to have the access...I would not hold your breath. I could not even get copies when I was on the underwriting side of the game, just the baseline premiums for each aircraft model that the company was willing to write and a list of those that the company was not willing to write.

I am on yall's side (if there is a side to take), but I do play in this insurance game on a daily basis so I am just trying to help you all understand the game a little better. No offense is meant to any one by my postings, just trying to help with the understanding.

-Low