Stuart Hope is a co-owner of Hope Aviation Insurance. His career as an aviation insurance broker... Read More
Be Timely & Efficient: The Importance of those Dang Insurance Forms. How do policy holders participate in sabotaging their own aircraft insurance program? Stuart Hope counts the ways.
The yearly letter from your insurance company arrives sounding the alarm for another approaching renewal: Your aircraft insurance policy does not renew automatically- and we will require current and updated information from your broker. In the meantime- you are hereby notified that premium and/or coverage may change depending on the information we receive.
OK- we all know filling out these forms is about as much fun as having the proverbial tooth pulled- but we’re also talking about a system designed to protect all that you have worked so hard to build. Part of that protection system is completing these forms in as much detail as possible. When you don’t complete them properly or fail to return them in a timely manner- you are creating a chink in your own armor. Consider the following three ways to be your own worst enemy when seeking insurance coverage:
1. Procrastinate over completing the requested updates until the last minute. Most insurance brokers send the renewal update forms to their clients 60 to 90 days in advance of the policy expiration. As a broker- I find we are often required to follow up multiple times for the return of these important documents. If they are returned promptly- it gives the broker current information (read ‘ammunition’) and more importantly- time to properly market your account with other insurance companies. It takes time to negotiate with each underwriter on pricing and coverage.
In this day and age where many firms are using a staff of five to do the work of 10 employees- getting a response can take weeks- not days. Waiting until the last minute hamstrings your agent. Since the aviation risk probably represents one of the largest catastrophic loss exposures you or your company faces- continuing coverage absolutely should be identified as top priority and treated as such.
2. Giving the forms to the least qualified person for completion. Since aviation has its own vernacular- giving the form to someone in your office who doesn’t know a Cessna 150 from a Cessna 510- RVSM from TAWS- or an N-number from an airport ID- virtually assures that incorrect or incomplete information will be submitted on your behalf.
Missed details are the difference between writing a policy as bulletproof as possible and one that’s full of holes. Generally it will be a team effort with your pilot(s) completing the areas of the forms where they are experts and your finance/insurance department folks filling out the remainder.
3. Leaving questions blank- or giving vague or half-answers. Many insureds leave questions blank or give half-answers because they are under the impression that if they answer ‘yes’ to a question querying whether they are engaged in a certain activity- they will be charged more premium. It is simply wrong to assume that not answering- or giving a half-answer will result in adequate coverage. The questions on applications are designed to identify uninsured exposures.
If a ‘yes’ answer to a question identifies an uninsured exposure- you will want to know what it would take to plug this gap in your protection. Often coverage can be added at no additional premium. If there is a premium- you can decide whether to pay it- or possibly not engage in the activity. To not address an insurance company’s question is the wrong decision.
So not surprisingly- successfully renewing an insurance policy is all about ‘details- details- details’. Like it or not- underwriters are generally forced to get to know you (and judge you) through a piece of paper. And they love paper with plenty of details! If you’re doing all the right things but aren’t taking the time to document them or otherwise let your broker know what is happening- you lose the horsepower that works in your favor at renewal time.
Completely filling out applications- renewal questionnaires and pilot forms in a timely manner gives brokers much-needed ammunition when they go to bat for your coverage program and premium rates. Completeness and accuracy also sends a subliminal message to underwriters: ‘If you are this detail-oriented when it comes to paperwork- imagine how meticulous and safe your aviation department must be!’
Also- don’t forget to forward a copy of training certificates- including any events such as Engine & Ops Seminars or online safety courses that you or your flight personnel may have completed during the year.
Finally- if you have any questions when completing these insurance forms- pick up the phone and call your aviation insurance broker. If necessary- have their insurance specialists go over the renewal forms with you from start to finish. It’s why you pay them.