Rates Lowered On TAAs, Homebuilts

This week at Oshkosh 2007, Avemco's Executive Vice President Jim Lauerman announced changes with the company's underwriting standards and risk management approach. He provided updates on previous announcements made at Lakeland earlier this year, and also announced new changes.

Avemco, the only direct aviation insurance underwriter, has been insuring pleasure and incidental business-use aircraft for years, and is one of the most popular insurance companies amongst the general aviation crowd.

Lauerman, who is an ATP-rated pilot as well as a CFI, left a previous career as a chief pilot and CFI for a Beechcraft dealer to join the Avemco team.

"We came to the conclusion that we were overly conservative." explains Lauerman with regards to the company's past rates for technologically advanced aircraft. He also announced Avemco has lowered rates on Columbia aircraft after studying the statistical data they have been compiling on the somewhat new single.

Lauerman pointed out that insurance companies must be extremely prudent with rates on new aircraft entering the marketplace, "or you get torched on the loss side."

Avemco has also expanded underwriting criteria to help insure transitional pilots, and available liability limits have been increased to $1,000,000 with no sub-limit. EAA members should be glad to know that rates have been reduced on homebuilt aircraft and passenger liability is now available for them. The standard $1,000,000 policy previously covered only the damages occurring outside the aircraft.

Lauerman says the company has been writing LSA aircraft for over a year, and that the LSA category "is a natural market for Avemco." He mentioned the importance of larger manufacturers entering the market place (i.e. Cessna), as this will allow for lower rates and further legitimize the light sport aircraft concept for insurance companies.

Avemco continues to sponsor the Airmanship Education Research Initiative, which compiles insurance company statistics to look for patterns in behavior. The founder Bill Rhodes hopes the patterns apparent in the statistics will highlight the decision-making characteristics of "expert" airmen, which can be used to educate the rest of the aviation community. "The response has been really satisfying." says Lauerman.

Over 11 saltwater-inundated aircraft were recently donated to the Build-A-Plane Project, which Avemco also sponsors. As ANN reported, the Build-A-Plane Project aims to introduce young people into aviation by allowing them to work on aircraft.

Avemco's commitment to furthering the aviation community is inherent in their mission. The company does not insure commercial aircraft operations and with a declining GA base, the team at Avemco is certainly aware of the potential economic impact of such a decline.

FMI: www.avemco.com