Insurance

[Jim Harris]

Has anyone had luck getting decent rates on insurance for the VL3?   I started reaching out this week just to get some ideas on cost and the quotes have been ridiculous.   I’ve got about 1000 hours and instrument rated with almost all of that time in high performance, complex piston singles so I don’t think the rates are because of my experience level.  

[Matt Ricciardi]

9 minutes ago, Jim Harris said:

Has anyone had luck getting decent rates on insurance for the VL3?

In short, no.

I'm in a similar situation--about 1k total hours, 250 complex/retract hours, commercial certificate, instrument rating, no accident history.  Underwriters have been using the lack of U.S. data to justify crazy rates in the high-teens per year for full hull and liability coverage.  JMB and the insurance agent expressed hope that rates would come down over the next year as VL3s build a safe track record here in the States.  (Insurance rates are, I'm told, much more reasonable in Europe.)  In the meantime, some folks are opting for liability and ground coverage only.

David Hampson at Schrager Hampson Aviation Insurance Agency in Massachusetts has been the point man for VL3 insurance issues.  He's already up-to-speed on the situation, so I would reach out to him if you haven't already.  (I'll send you his e-mail address in a private message.)  I plan to request an updated quote from David nearer to my delivery date.

[Jim Harris]

Thanks Matt. I’ll reach out to David. 

[Michael Hodes]

My situation is similar-- I have a little over 800 hours, 350 complex/retract, instrument rating and no loss history.  I got a non-binding quote several months ago for $18K.  I refuse to pay north of 4% of the hull value for insurance.  My plan is to get ground hull (motion and non-motion), public and passenger liability and then see what the market looks like a year from now.

[Doug Vause-JMB Western US]

Matt is correct, David Hampson is the right contact and he'll quote you with Star Insurance.

[Jim Badalamenti]

Disappointing the $$ on the insurance. I wonder how much is due to new, how much due to "Experimental", and how much is due to the poor track record of European flyer accident rates with the VL3 in Europe. Hearing attributable to old design and pilot training typically less than most in the U.S. including IFR familiarity. I am instrument rated and have around 2000 hrs with most of it retractable complex high-performance but doubt will see much relief if anything from what I'm hearing. My current A36 Bonanza is a little over a 1% premium vs. hull value but I also have an experimental Cub that is indeed around 4%... I'd attributed that mostly to it being a tail dragger and on top of that my lower hours in the tail dragger (<100) but not certain. For me the VL3 will at a minimum replace the Cub and long term the A36 but looks like even then my insurance premium if go full hull could be way more than the 2 combined (and the value of the 2 more than double that of the VL3). Both aircraft through Falcon with Starr the underwriter. Might go with the crowd and check with David Hampson. Not optimistic going in as a group will help but there's a small chance. Unfortunately from what I understand about the insurance game once one company puts it out there to an underwriter to quote then no other company can, i.e. it's a one shot deal and it's an "is what it is" quote for that underwriter. 

[Matt Ricciardi]

3 hours ago, Jim Badalamenti said:

I wonder how much is due to new, how much due to "Experimental", and how much is due to the poor track record of European flyer accident rates with the VL3 in Europe. Hearing attributable to old design and pilot training typically less than most in the U.S. including IFR familiarity.

This is different than what I've heard.  My understanding is that VL3 insurance rates in Europe are much lower.  I'm aware of one recent VL3 accident in Europe, but it was a VFR into IMC situation where the parachute saved everyone onboard--entirely on the pilot, not the airplane.  Insurance rates on well-known experimentals here in the States, like RVs, are also lower.  My understanding is that the crazy U.S. hull insurance rates are due to a lack of U.S. safety data.  Unclear why the underwriters wouldn't consider the European data, but anything to justify higher premiums, I suppose.

3 hours ago, Jim Badalamenti said:

Might go with the crowd and check with David Hampson. Not optimistic going in as a group will help but there's a small chance. Unfortunately from what I understand about the insurance game once one company puts it out there to an underwriter to quote then no other company can, i.e. it's a one shot deal and it's an "is what it is" quote for that underwriter.

That's true, but only for a limited period of time, then a different agent can get a fresh quote.  No harm in reaching out to David and asking the question.  I plan to reach out for a fresh quote myself in a few months, when my delivery date is closer.

[Doug Garrou]

Well known experimentals are pretty easy to insure in the US. Not much different from the equivalent certified aircraft. As one data point, full liability and hull coverage on my RV-9A is about $1000 annually. I’ve got about 1500 hours, 500 in type, instrument rated, and the hull value is $100K. My old Warrior was a only a little cheaper with me at 1000 hours, instrument rated, and a $50K hull value. 

[Matt Ricciardi]

15 hours ago, Doug Garrou said:

As one data point, full liability and hull coverage on my RV-9A is about $1000 annually.

You're not making any friends here, Doug!  

[Jim Badalamenti]

I heard the same Matt about lower rates for the VL3 in Europe. What I was intending to do but failed was point out the irony of European rates supposedly lower despite a number of 'issues' in Europe. A large number with the old variant, gear failures (hard landings and way more often than in U.S. grass strips), and VMC into IMC. Critical flight characteristics of the VL3 were revamped from the original design, the gear beefed up, we in the states mostly land on paved runways, and dare I say we all seem to have had a bit more training/experience and hearing high rates regardless... from what I've read, seen in a search of accidents, and explained to me by a trusted JMB person (not about the insurance but about the history). Just wondering if higher U.S. rates could also be attributable to a different mindset of underwriters in the states about non-Vans Experimentals! I'm just talking so don't count me as one claiming to be an expert on the subject. Merely sad because I like the low cost of operation which by the way was the big sell to the wife!

[Matt Ricciardi]

Thanks, Jim.  I'm with you now!

21 minutes ago, Jim Badalamenti said:

...dare I say we all seem to have had a bit more training/experience...

Yep.  I don't know details of the European training requirements, but I have the same sense.  May have to do with the VL3 being classed as a microlight in Europe with accordingly lower training standards and more restrictions (e.g., no IFR and 600 kg gross weight limit).

20 minutes ago, Jim Badalamenti said:

Merely sad because I like the low cost of operation which by the way was the big sell to the wife!

Likewise.  The combination of speed and fuel efficiency (and modest purchase price compared the U.S. used aircraft market in recent years) is very attractive.

[Jim Badalamenti]

Given the delay in shipping the 916's with the MTOW update that might provide time for a group of new owners to leverage an improved rate via same agency/carrier. With that said it seems every time I talk insurance I get the feeling it's an inflexible system, i.e. no dealing as most would do in business (e.g. if it were me and I had control of the situation as an insurance agency and if within the 'rules' I'd provide a rate reduction based on volume, i.e. otherwise low probability getting everyone's business otherwise). Just a thought. $18K for a $400K airplane per year range absolutely sucks.

[Jim Badalamenti]

I spoke today with David Hampson at Schrager Hampson Insurance. He has invested significant time with JMB and with at least 2 underwriters I'm aware of to be able to "speak VL3" well and properly portray/educate the VL3 to the underwriters.  Here are some of the takeaways from the conversation...

Expect high rates are largely due to 'Experimental' (regardless of owner participation level vs. factory), limited to no activity for the VL3, recent increases in rates, and typical flyers' limited to no experience in retractables. Regarding 'Experimental' he said MOSAIC left hope for some rate reduction, but sort of retracted that after I probed a little further about we with the 'Experimental' tag most likely never having that label lifted (I'm not a believer in blind optimism but maybe that would be another MOSAIC surprise, doubtful). Though he wouldn't say it directly it was clear there is not great hope for rate reduction based on more VL3's being out for at least a number of years and you might say never (particularly if 'Experimental' VL3's are overtaken by 'factory-built' VL3's after MOSAIC)... the RV rates are low because they number in the thousands and existed for decades now. The biggest hope for some reduction for most is flight time in the VL3 that will bring along with it retractable time.

In my case I classify as a 'best rate' scenario for an initial VL3 flyer having 1900+ hours, 1500+ retractable/complex/etc. with Bonanzas, instrument rating, no accident history, etc.  Others who have spoken up could be in that same category if have sufficient retractable time. My rate he speculated might be in the $14K range perhaps a little less (I'm hoping for less) whereas I heard it somewhere $18K for others initially (again the retractable time the issue?) and if limited experience worse. Liability only he said might be a couple $ thousand. We also spoke of declaring a lower hull value which is possible but somewhat frowned upon and risky if say didn't declare enough and an accident's damages went over the declared value then for lack of better terms you lose the airplane. And there are clip levels of declared value vs. premium, and the premium isn't linear. Enough on that.

Finally, regarding insurance broker/agency to go with it is clear that David knows the VL3 world and has done a lot of work to bring in the underwriters and (I'm assuming, sort of in-between the lines) to work to get the best rates possible. He indicated little probability of rate reduction via a pool of new owners signing up for him or any other broker, it's basically (not his words) a drop in the bucket. I knew that but hoped I was wrong.

I'm assuming I'll be going with David.

[David Hampson]

I just joined VL3flyers.org thanks to Matt Riccardi's kind invitation and am happy to answer any insurance questions. That being said, it's always difficult to make blanket statements regarding premiums because there are so many variables insurance companies use to rate and each insurance company has their own proprietary underwriting appetite and rating algorithms. Since aviation insurance is largely unregulated compared to other lines of coverage like auto or home, it's not unusually to find drastic differences in underwriting appetite and rates between difference insurance companies. Auto and home insurers are usually fenced into a fairly narrow band due to state regulations around those lines of coverage.

We are an aviation insurance broker and work with many aviation insurers, but only a subset of those will write coverage on VL3 aircraft. We work with JMB, and invested time introducing various underwriters to the VL3 aircraft, and continue to do so as opportunities arise. At the moment we have two underwriters willing to quote, though their premiums are very high. There are several new underwriters that just started up last year in the aviation insurance market and we are hopeful that one or more of them will compete to offer additional options to our clients.

The fact there are few VL3 models in service in the USA and a limited history to draw upon coupled with a still hard aviation insurance market presents several challenges. With a new model, aviation underwriters are often also concerned about parts availability and enough mechanics with the expertise to repair aircraft damaged in a claim. In the past underwriters have gotten burned on other models with few examples in service when parts and mechanics were not available and aircraft that should have been repairable had to be totaled to settle the claim expeditiously.

Unlike some other new entrant manufacturers, JMB has invested a lot in setting up the infrastructure in the USA to support the models they are selling so I am optimistic that once underwriters understand this and experience JMB's support system, these concerns will be mitigated. 

JMB is also heavily invested in offering training to their customers and as JMB's training programs continue to evolve, I believe that will help as well.

As a retractable gear aircraft, it is always going to be challenging for someone with no retract time to obtain competitive rates on the VL3, especially if they are a sub 500 hour pilot. Insurance for these pilots is available but expensive ($18-25K depending on hull value).