Part One: It's All In The Financing
by ANN Associate Editor Annette Kurman
Being in Sebring last weekend among the dozens of shiny new LSAs
was exciting for the sport aviation industry, as well as those who
attended. You could feel the buzz, look around at all the colorful
displays, and speak with those who knew the intimate details of
every trike, gyro, and plane struttin' their stuff.
I went into Sebring assuming I was going to purchase a plane. A
realistic assumption? Absolutely not. But I was in Florida and felt
I could do damn near anything. My first order of business was
finding the plane with the right "feel." Placing my derrière
in numerous cockpits was a little like getting the feel for a new
car: Did it have enough head and leg room? Was there sufficient
space for a second passenger who might weigh twice my 125 pounds?
Would all my "stuff" fit in the storage area?
Once I had narrowed the group to a favorite, the next phase in
LSA ownership emerged: How was I going to pay for this shiny, new,
beautiful aircraft?
Many people, LSA distributors confirmed, pull out their
checkbook and write one check with a lot of "zeros" on it. Granted,
an LSA is nowhere near the cost of a Cirrus SR22 or an Eclipse, but
I certainly did not have the resources to write an on-the-spot
check for $100,000... or even $60,000.
The distributors I spoke with told me that their particular
companies did not provide financing. What to do, what to do?
Which brought me, literally, to the seminar presented by Bob
Mackey, vice president of Falcon Insurance Agency, on how to
finance your plane.
"Aviation insurance," he said, "is a relationship business with
the client and the underwriters." While there are four or five
companies that will insure all LSAs, Mackey explained, there are
some who will not; some may not insure taildraggers or floats, for
instance.
Underwriters feel very comfortable with Rotax engines, which
most LSA have. Got a plane with an unusual engine? Might be a
challenge to find an underwriter.
Also coming into play are the repairability and availability of
repair shops and parts for your particular aircraft.
Mackey's recommendation to potential sport aircraft owners was
to work with one agent, one you're comfortable with. Calling three
or four different agents will just have three or four people doing
the same legwork and make the underwriters grumpy.
"A good agent asks all the questions to get you the best price,"
he said, "and is there to be an advocate for you."
One surprising assertion from Mackey was that insurance
companies love to pay claims - and pay those claims quickly. It's
the word-of-mouth effect -- happy customers tell everyone!
One question I had and someone else asked was what circumstances
will cause an insurance company to not renew a policy. Mackey's
answer: "When something happens that is a clear violation or
accident due to, basically, foolishness." Like landing at the wrong
airport.
Note to self...
Coming Friday... The Nitty Gritty Of Financing An
LSA
ANN's Daily Aero-Term (04.25.24): Airport Rotating Beacon
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