Well, welcome everybody to the very first episode of the Aviation Insurance Podcast! We're so glad that you're joining us, and we're excited to have you along on this journey.
So, what is the Aviation Insurance Podcast all about? We’re here to start sharing with aircraft owners, aviation business owners, and operators the basics of aircraft and aviation insurance. We’re going to begin with the foundational level, covering the very basics of aviation insurance. We’ll eventually get into more detailed topics about aircraft insurance, provide you with market updates, and move on to more complicated matters, especially for those of you in the commercial side of the business.
A lot of this information will be complemented by my book, which I'm not here to sell you, but it would be helpful. It’s called Aircraft Insurance Foundations and can be found on Amazon by searching "Aircraft Insurance Foundations" by Timothy Bonnell. They used my full name for it, so that's a good reference, especially for these early episodes. Again, this is not really a money-maker for me—it’s just a way to share that information and provide you with value.
For episode one, we’ll start with the basics of why aviation insurance (or aircraft insurance) is unique. Many of us are used to buying insurance for our cars, houses, or contents, and for those of you who are business owners, you may have purchased different types of insurance as well. But why is aircraft insurance unique?
There are several reasons—this could probably be an hour-long episode just on that topic—but let’s touch on some key points that make it different. Let’s compare it to buying auto insurance. With a personal car, we want to protect it from being damaged, whether through a crash or a fender bender. If the car is totaled, we want it replaced. And with car insurance, we can use the car anywhere we drive it, and we can generally let anyone drive it. If we want a friend or family member to drive it, we can give them permission.
Aircraft are a little different. Aircraft are powered by vastly different propulsion methods, such as piston aircraft, multi-engine piston aircraft with varying horsepower, and other types with different seat configurations and handling characteristics. Because of this, insurance companies want to have a say in who is piloting the aircraft. It requires underwriters and insurance companies with a specialization in aviation to assess who is best suited to safely operate and handle an aircraft.
Another factor is that aircraft can have substantially higher values than automobiles. For instance, newer Gulfstreams can exceed $65 million to $70 million. When you get into this range, no single insurance company will want to take on that kind of risk. They’ll want to have a say in who is operating the aircraft. Some aircraft have 5, 10, or even 20 seats, with liability limits on private aircraft reaching up to $100 million, $300 million, or even $500 million. Again, underwriting in aviation requires much more care and attention. It also requires spreading the risk across multiple insurance companies, even if you, as the insurance buyer, don’t see that happening behind the scenes.
Given these increased exposures and the complexity of aircraft, it’s necessary to have an aviation insurance specialty field. This is why today we’re talking about aviation insurance: ensuring aircraft and aviation businesses is considerably different from the rest of the insurance marketplace. It requires specialization, and it requires people who know what they’re doing. These are some of the topics we’ll explore, and as we move forward, we’ll get into much more specific details.
It’s helpful to understand why you can’t just call the person with a sign on the road offering insurance for your airplane or aviation business. Why can’t they handle that? The answer is simple—they are not equipped to handle those unique exposures or have the specialists who know how to underwrite those risks.
So, welcome to Episode 1 of the Aviation Insurance Podcast! I hope you now understand better why there’s a specialty market for aviation insurance, with professionals who know how to handle, place, underwrite, and mitigate aviation risks for aircraft owners and aviation businesses.
We’ll see you in Episode 2 very soon. Thanks for listening to the Aviation Insurance Podcast. If you found this episode valuable, please share it with someone who could benefit from this information. Don’t forget to subscribe on your podcast platform so you don’t miss any new episodes and to help our show have more impact.
This episode is brought to you by Eris Insurance Solutions: your flight plan for navigating the turbulence of aviation insurance. For more information, visit www.erisinsurance.com.
Disclaimer: These episodes are for educational purposes only, and due to the changing regulatory and legal nature of the business, some information may change over time. Having a well-educated and experienced aviation insurance broker on your team is an absolute requirement for success in business and for managing the risks associated with your aircraft and aviation business.