Trike insurance....MAYBE!

[Graham Speller]

I'm the author of the letter that Gert Coetzee posted. I didn't know he was going to post it: I heard about it from a competitor of ours: he thought it was very funny. There's no accounting for some people's sense of humor!

I invite anyone to put questions to me about microlight insurance. If I can answer them, I will. If I cannot, I'll tell you.

I will do this in my private time, not as a representative of any particular insurance company, broker, etc. That way, I cannot be accused of advertising or wasting precious "rate negotiating time"!

It is not my intention to be either "long-winded" or "heart-rending". But it seems to me there's a lot of anger out there, being directed at the insurance industry and maybe, just maybe, I can help to correct some misconceptions or provide some half-decent advice.

I promise there will be no threats of physical violence or law suits. At least, not by me...maybe against me!

So, go ahead. My chin is firmly stuck out, in the middle of the target. Take a pop!

Cheers
Graham Speller

[Duck Rogers]

I invite anyone to put questions to me about microlight insurance. If I can answer them, I will. If I cannot, I'll tell you.

All right then......I do NOT have aircraft insurance, rather life cover arranged through DJ&A WITH a loading because I fly a microlight
About a week-and-a-half ago, I was contacted by one of "your" employees wanting to know whether I fly 3-axis or trikes and he then offered me a reduction in premiums because I said I fly 3-axis.

Now, this whole thread started about the end of May. Does it not seem strange that AFTER this thread was started and Dr Coetzee started scratching where there was apparently no itch, that I would now be offered a reduced rate?
Hmmm.....just wondering.... The timing seems rather coincidental.

Anyway, what would be the rationale behind such a move? Am I more of a risk if I fly a trike?

Duck Rogers

EDIT
Whoops... I just realised my cover is through Aircrew Financial Services and NOT DJ&A
Are the two still related though? It used to be DJ&A ?

[Tumbleweed]

Well done Graham, Thanks for making yourself available.

Nothing better than replacing misconceptions, here-say and bar talk with the facts.

Can you help by summerising the different insurance?

Short term. New trike. or 3 axis, value R180 000.00. Flown by licenced pilot (a) 30 hours experience, (b) 300 hours experience, licenced field, hangar e.t.c. Same aerie, five years later, devalued to R80 000.00

Is it possible to get (3rd party) fire and theft ? ( just for the record)

What consitutes 3rd party cover? How if any, could a passenger insistute a claim against you, say you share the same 'creative' landing and his arms are in plaster rendering him useless for 4 weeks.

Life cover. What criteria is used when loading exsisting policies to cover the 'flying risk'?

I have found that as soon as (generic) brokers inquire about flying issues, they are met with a post office mentality from the insurance companies, passing the buck, eventually (2 weeks later) to some doos 'specialist' who does'nt know a trike from a bike and could'nt be bothered to educate his sales staff / agents or intervene with the queery.

So, I guess, your laughing mate / competitor who saw the thread must be one of them :D

What I did was have my whole portfolio re-evaluated, had the crap paid up, (that bonus was really nice) replacing the life policies including flying cover giving me 3 mill more life cover for only R200 more in premiums.

Anyway, find the nearest strip, someone's gonna offer you a flip, your life will be changed coz you're gonna buy a trike and ask your boss for preferential deal on insurance cover, coz your wife says if something happens she's going to haunt you forever coz "you've got a midlife crisis and why can't you just play golf like the rest of them."

"And stop looking out to the sky like a stupid 'weatherman' all the time, NO, you can't go fly today, you have to watch the kids! And No, you can't take the kids up, you don't have a parachute, go find that alternative. What do you mean 06h00, are you nuts? Jees, life used to more simple before ..........."

[GR8-DAD]

Graham, for starters, thank you for your willingness to answer questions to which there has only been speculation for as long as... wel......fact is we have never heard it from the horses mouth. You can see my penny's worth earlier in this thread. As you would have noticed the questions has nothing to do with the level of service, product or expertise, but with the fact that M/C insurance accross the board is very expensive - period.

a. Why is Microlight insurance so expensive compared to vehicles?
b. Why can I not deal directly with my Insurer?
c. Do you take the same commision as a % relative to the value of the plane compared to automobiles?
d. How, when and by whom has the risk analyses of M/C insurance been compiled and do you believe that, statistically, it is correct?
e. Rand for rand, how does M/C insurance compare to Light aircraft insurance ie. Cessna of R300k vs. 3-axis Microlight of R300k?

From an existing DJ&A customer.

[gertcoetzee]

Graham

I think my decision to post your (private) response to a public debate here, and your brave decision to take on microlighters here will only benefit all involved. Making insurance more affordable and reasonable will benefit all involved.

Looking forward to your replies - maybe you can follow it up with an article (Q&A) for Microflight Africa, in the September edition where you will announce the new reasonable insurance policy for Trikes. Not that I want to put words in your mouth.

Gert Coetzee

[Graham Speller]

I invite anyone to put questions to me about microlight insurance. If I can answer them, I will. If I cannot, I'll tell you.

All right then......I do NOT have aircraft insurance, rather life cover arranged through DJ&A WITH a loading because I fly a microlight
About a week-and-a-half ago, I was contacted by one of "your" employees wanting to know whether I fly 3-axis or trikes and he then offered me a reduction in premiums because I said I fly 3-axis.

Now, this whole thread started about the end of May. Does it not seem strange that AFTER this thread was started and Dr Coetzee started scratching where there was apparently no itch, that I would now be offered a reduced rate?
Hmmm.....just wondering.... The timing seems rather coincidental.

Anyway, what would be the rationale behind such a move? Am I more of a risk if I fly a trike?

Duck Rogers

EDIT
Whoops... I just realised my cover is through Aircrew Financial Services and NOT DJ&A
Are the two still related though? It used to be DJ&A ?

Duck

First off, you're right. AFS used to be a part of us, but we haven't been related for over a year. DJA's current area of activity is strictly the short term aviation insurance market. We have associations with life insurance brokers, who provide a service to our clients, but that's all.

So I can't really comment on the approach you received, either in the substance or the timing. Suffice to say, however, that each life assurance company has its own views about risk profiles and it is the function of any broker to present yours in the best possible light, in order to achieve the optimum result. It could be that the life assurer concerned had announced a change in its philosophy, which resulted in a lower loading becoming available for 3-axis drivers.

[Graham Speller]

Lots of questions, so I'll try to be brief.

Delta VV
(a) Yes, you can insure for pretty much anything you want. If you choose to self-insure whilst in flight, you could probably arrange fire/theft cover through your household insurance policy: just make sure you get written confirmation so there are no arguments. Otherwise, an aviation Insurer will be able to offer this, including transportation.

(b) In aviation insurance terms, we usually refer to "Third Party & Passenger Legal Liability", so that "3rd party" will not include passengers. "3rd party" would cover legal liaiblity for damage/injury caused by the aircraft, other than to its occupants. Passenger liability coverage can be difficult/expensive/unavailable, depending on the circumstances. An alternative might be to consider Personal Accident insurance, which can apply to the pilot and passenger. A PA policy will pay a fixed benefit for death or permanent disability and might cover temporary disability and medical costs in addition. A pax might claim compensation if he/she is injured as a result of the pilot's negligence and the amount claimed will not be limited by the insurance you carry (or don't carry). In the absence of Passenger Liability insurance, you need to be careful about who's sitting alongside you.

(c) My understanding of life cover is that assurers will look at the nature of flying you undertake, the type of aircraft and the number of hours you expect to fly annually. A professional pilot flying more than 500 hours/annum might have no loading at all, while a private pilot who draws circles in the sky for 10 hours a month, might be severely loaded. There is no hard-and-fast rule and different life assurance companies have different attitudes. You need to deal with a life broker who has a thorough understanding of the aviation market. The same goes for any sort of aviation insurance: specialists exist for a reason.

Demon
1) Exclude the flying aspect and of course the premium will reduce. It might come down by as much as 60% if trailering were excluded, but you might also speak to your householder insurer (see my comment to Delta VV).
2) Pilot experience is crucial, particularly at the low end of the scale. Once you hit, say, 500 hours, the reductions will become less significant as you gain more hours. Where there is more than one pilot flying, he rates will be set based on the least experience driver.
3) Age is not relevant. So long as you have a licence, a current medical and you breath in as often as you breath out!
4) See my original comment to Gert Coetzee regarding ballistic chutes.
5) Increased excesses never seem to result in an appropriate premium reduction, so I do not favour them myself. That's what I call "horizontal self-insurance". If you want to take a higher risk, for a lower premium, rather look at "vertical self-insurance" where you retain, say, 20% of every loss, as if you were an Insurer. The amount payable is still calulated after deducting the Excess, but you then get paid 80%. In return, you only pay 80% of the premium.

GR8-DAD
a. There are no rules: it depends on the circumstances and, to a large expent, the results that the Insurer has experienced. The advantage that motor insurers have is the millions of units insured and they can get very accurate statistics which they know are reliable: they won't get sudden "spikes" from one month to the next, so they can set rates very accurately. Because of the relatively few units insured, microlight insurance is very much a "feast or famine" type of business, so Insurers tend to be more conservative. I agree it's a bit of a "chicken and egg" situation.

b. All I can say about direct dealings is "Why would you?". Using a broker costs the same (notwithstanding the ads!) and the benefits are huge, if you've got the right one in your corner. Some Insurers prefer to deal with brokers because they know they will be getting a certain level of service, product knowledge, quality of documentation, etc., and the broker handles all the day-to-day enquiries that the Insurer doesn't have the manpower to deal with. The broker also plays a crucial role in the management of claims.

c. Brokers receive a commission from the Insurer, based on the premium. For aviation business, this is usually 15%. Your personal broker will get 20% on non-motor premium, but legislation limits motor insurance commission to 12,50%. Going direct does not, however, mean a 15% reduction! See my comments under b. above. The broker, if he's any good, does a huge amount of work that the Insurer would otherwise have to do itself. This is why the Insurer pays the broker, even though the broker is the agent of the aircraft owner.

d. To follow

e. To follow

Hope this helps for starters. It's 6:30am and I need to get ready for another fun day at the office! I'll fill in the gaps later.

Cheers
Graham Speller

[Jerry B]

Graham,

Firstly, thank you for responding to this thread. I have been flying microlights for some time now and stopped insuring with Jankelow a couple of years back due to the high premiums. Some questions if you will oblige:
:D
1. I am still uncertain as to why the premiums are so high. Surely you must have accurate information on claims etc to justify the high premiums. Before you say that you are not the insurance company, am I right in saying that you must be the largest insurer of microlights in SA and therefore both be in the position to provide your own claims statistics aswell as justify the premium / motivate a decrease?

2. I have started my PPL and was contacted by someone a few weeks ago who tried to sell us other insurance from your company. It was not a pleasant experience as the guy was a little pushy and I was a bit irritated that my details had been given to someone who isnt even part of your company... is this right?

3. Would it help if we got together a few of us to negotiate better rates for microlights? I want to insure but struggly with justifying the premium...
4. I am looking forward to the response particularly the one about the car vs micro price wise...

[Morph]

Me thinx this is how male prostitution started.......

I sometimes think I am a male protitute Every time I deal with SARS or an insurance company I feel like I have been F@#$&^d but the worst part is I have to pay for the pleasure

[Bacchus]

I have spoken to someone in the insurance industry and I copy him on this. It is a question to Graham Speller at Jankowitz.
Why not try it and let us know the results.

"Dit mag 'n goeie oefening wees om Jankowitz op die forum te versoek om Santam te versoek om hulle eisestatistiek, teenoor premie ontvang, op die forum te openbaar, as bewys waarom hulle sulke hoë tariewe moet vra.

Indien die eisestatistiek teenoor premie-inkomste egter wys dat hulle 'n onbehoorlike wins maak, kan julle hulle mos hierop aanvat, in samewerking met Jankowitz-hulle."

Kom ons probeer hierdie een.
Groete

[Graham Speller]

I have spoken to someone in the insurance industry and I copy him on this. It is a question to Graham Speller at Jankowitz.
Why not try it and let us know the results.

"Dit mag 'n goeie oefening wees om Jankowitz op die forum te versoek om Santam te versoek om hulle eisestatistiek, teenoor premie ontvang, op die forum te openbaar, as bewys waarom hulle sulke hoë tariewe moet vra.

Indien die eisestatistiek teenoor premie-inkomste egter wys dat hulle 'n onbehoorlike wins maak, kan julle hulle mos hierop aanvat, in samewerking met Jankowitz-hulle."

Kom ons probeer hierdie een.
Groete

See my original posting:

I invite anyone to put questions to me about microlight insurance.

I will do this in my private time, not as a representative of any particular insurance company, broker, etc.

Enough said.

[Bacchus]

Great!
We wait for your answer then, Graham.

[Jerry B]

Hmmmpppphhhhhh!

My questions not gonna be answered then....

Perhaps you should remove the "website" link on your profile, since in this instance it doesnt apply??? I got confused...

Perhaps somone else could try and answer my questions.....

[Graham Speller]

Perhaps you should remove the "website" link on your profile, since in this instance it doesnt apply???

Good point, Jerry B: done.

I'm very sorry if my offer of assistance was misinterpreted by anyone else in addition to JB.

I intended to provide advice in order to give rise to a better understanding of insurance as it relates, in particular, to microlights. I hoped I made it clear that I was doing this in my private capacity, not as a representative of the company I work for, nor any insurance company.

If, under these conditions, my input is not helpful or relevant, that's cool: I'll have more time to practise my golf...and, believe me, I need all the practise I can get!

And, before anyone asks, I'm not sulking!!!

Cheers

[gertcoetzee]

Graham,

This is not a political forum. Passing the buck, not answering questions etc is not allowed.

Your message to me after reading my posts in this forum said
"Dear Dr Coetzee
My name is Graham Speller. I am a director of Dennis Jankelow & Associates."

Then I posted in a public forum your private message dealing with my public statements.

Then you decide to participate in this public forum in your private capacity, but plead "private capacity" when it seems as if you are in a corner!

Is time to start replying as a director of Dennis Jankelow & Associates.

Avoiding the issues on a "technicality" is doing the firm, of which you are a director, damage.

There are 100s microlighters who will support a firm that can answer honestly, and represent us in dealing with Santam etc.

Use your private time to play golf, and time in your office to answer insurance related questions on this forum.

Gert