Be Careful When Switching Insurers

Switching aviation insurers can seem like a straightforward decision, especially if you’re looking for better rates or more comprehensive coverage. However, there are several potential downsides to consider before making the move. Here are some key points to keep in mind:

1. Loss of the Benefits of Loyalty

   When you switch insurers, you may lose the benefits that come with staying with the same provider. This can be particularly important in aviation, where long-term relationships with insurers can lead to better understanding and management of your specific risk and associated coverage over time, better premium rating since a renewal doesn’t generate the same “acquisition costs” as a new risk, the tendency for an insurer to pay a “gray area” claim for a long-term client that they might not otherwise have been contractually obligated to pay. If you are an older pilot, you want to “age in place” and not be jumping to a new insurer.




2. A Less Broad Policy

   Although similar, aviation insurance policies between insurers can be significantly different. One insurance company’s policy wording can be much less broad in coverage and contain more exclusions than another. That can be a major reason their premium is lower.




3. Increased Premiums

   While the new insurer might offer lower premiums initially, there is no guarantee those rates will remain low. Some insurers are known to “buy” the policy the first year with an artificially low premium and then try incrementally increasing the premium back to market rating over time. In addition, the lower premium may be the result of higher deductibles or different coverage limits than you previously had.

Conclusion

While switching aviation insurers can offer benefits like lower premiums or better coverage, weighing these against the potential downsides BEFORE you switch is essential. Carefully review the terms and conditions of any new policy with your AssuredPartners Aerospace broker to ensure the change is in your best interest. Everyone wants a lower premium, but insurance is a ‘foreign language” to most consumers, so lean on your broker to help guide you to an educated decision.

Contact us today! or visit us at assuredpartners.com/aerospace.