Understanding Risk

As your annual policy renewal increases, you may want to consider discussing a possible quota share option with your insurance agent. Quota share allows several insurance carriers to share the risk thus potentially offering you a smaller premium for the same amount of coverage.

In today’s hardening insurance market, more carriers are refusing to take on more risk. This is the reason you’ll only receive one or two quotes from the market when shopping for a policy. Carriers’ appetites for risk are changing. What they once deemed a negligible risk is now categorized as an undesirable risk. This could include pilot age, time flown in make/model, or full time crew as opposed to subcontracted crew. In these situations, a quota share could be more suitable for your particular situation.

For example, if your current carrier is charging a substantially higher premium because you use a pilot from a pool of subcontractors, you may want to discuss a possible quota share policy with your agent. In a 50/50 quota share, one carrier would cover the first 50% of a claim while a secondary carrier would pick up the remaining 50%. Different quota shares such as 25/25/25/25 could be configured if a risk is considered unwritable such as a recent accident.

Working with a knowledgeable agent/broker is important. Understanding your options will increase your chances of keeping premiums manageable.

Happy Flying!

Sheri Swartz- Aviation Specialist

Andrews Aviation Insurance