1. Ownership
The dominant factor contributing to your insurance costs is whether you own or rent the aircraft you intend to fly. While all Canadian aviators are required to have liability coverage, only aircraft owners will need to consider aircraft hull coverage.
2. Pilot experience
Seasoned pilots can typically expect lower premiums compared to novice pilots, especially with more complex aircraft. Inexperienced pilots may also face higher restrictions on liability limits. To quote a policy, insurance companies may require a minimum number of hours of flying experience in the aircraft. For this reason, it is recommended to keep a log of flight hours in a secure location.
Insurers will also need proof that you are appropriately licensed to fly the aircraft. Having further certifications — especially instrument ratings — may contribute to lower premiums, as they may show underwriters that you are a versatile pilot who can fly safely under a variety of adverse weather conditions.
3. Pilot age
While pilot experience is considered a boon, advanced pilot age can be seen as a detriment. There is no agreed upon age limit across the insurance industry; however, pilots 65 years and older often face steep rate hikes, and others may be dropped from their policy altogether. These underwriting practices may fluctuate based on changing market conditions.
To help keep your coverage, as well as lower your insurance costs, be sure to be proactive. Establishing a strong relationship with a trustworthy broker now will help you in the years to come. You can discuss pricing stability with them and what actions you should take to limit your exposure. Some likely recommendations include staying up to date with training, completing regular medical examinations, and maintaining proficiency on your aircraft.
4. Currency
While Transport Canada mandates aviators take specific actions to stay current and proficient, insurers tend to look favourably on pilots who engage in additional recurrent and advanced training — and may even require it. By undertaking regular training, you may show underwriters you are committed to safety and are willing to invest in it.
Maintaining currency and proficiency also entails flying frequently. If you complete the required and recommended trainings but fly rarely, insurers may worry you are not staying sharp.
5. The aircraft
For liability insurance, one of the biggest factors at play is the maximum seating capacity in the aircraft you fly. A larger seating capacity correlates to a greater potential for passenger injuries, which will increase your premiums.
For aircraft hull insurance, the cost is largely dependent on the value for which you choose to insure your aircraft. Insurers also assess potential aircraft repair costs, including the cost of labour and the availability of parts for your model of aircraft.
6. Storage and maintenance
For aircraft owners, how you store your aircraft is crucial to its longevity. And if you are purchasing ground risk hull insurance, storing your aircraft in a hangar will likely reduce your premium costs. By hangaring your aircraft, you are limiting its exposure to weather hazards, thereby likely lowering your maintenance costs and extending its useful life.
Your base location can also have an impact on your insurance costs. Aircraft owners storing and operating in locations prone to severe weather and/or high crime may see larger premiums.
Regular maintenance checks help ensure the safety and reliability of your aircraft and may also help reduce the likelihood of accidents and the ensuing insurance claims. Aircraft owners may want to consider keeping a detailed logbook of their maintenance efforts for accountability to themselves and their insurance company.
7. Loss history
As is true with any type of insurance, loss history impacts premium costs. However, it is not only your own past claims that play a part. Insurers will also consider the specific aircraft model’s accident history, as well as the claims of their entire personal aviation book of business. They will likely assess the total amount paid out and adjust premiums for all individuals they insure accordingly. You may see your premiums rise, even if you are claims-free.
8. Policy review
Over time, your insurance needs may change, as well as your aircraft’s usage and value. You may be overinsuring your aircraft and paying unnecessarily high premiums, or you may be paying too little and have a coverage gap. Reviewing your policy annually with your insurance broker can help you assess whether your coverage needs have changed and if you are paying a fair price.
9. External factors
Fluctuations in market conditions also greatly influence insurance premiums, as can exchange rates, relative cost of new aircraft, and increasing parts and labour expenses. Not only can harder market conditions harbinger higher premiums, but they can also lead to stricter underwriter scrutiny and dropped policies.
Working with an experienced aviation insurance broker can help you can better navigate the market and secure the coverage you need at a price you can afford. They can also provide advice on how to show the underwriter reviewing your insurance application that you pose a lower risk than your peers.
For more information and expert guidance on private aircraft insurance and risk management, contact Marsh — a leading global insurance brokerage with specialist expertise in the aviation industry.