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Dear List,
There was a general moaning this week `bout the high costs of
insurance. It was stated that the costs for a Taylorcraft of the same
vintage as most Ercoupes was less. I'd like to pontificate on these
matters for your weekend reading pleasure.
First off, what is insurance? It is nothing more than spreading
financial risk. All the premiums have to pay for all the claims, plus a
little something for the insurance company. Premiums can never go below
claims for very long, and claims can come in great gobs. Given market
pressures, premiums can't really raise to the levels that an insurance
company would like because the obscean profits would bring more companies
into the market - always at lower rates.
Now, aircraft insurance has a cycle. When there are no substantial
wrecks, profits are fat and competition keeps prices down. If their is a
Big Crash (i.e., 747 w/all aboard) the claim pool is decimated, profits
are
down for the year, and many underwriters leave for better return on
investment. That allows the remainder to raise rates, which is what is
probably happening now.
Eventually, the profits return, balance sheets fatten and the
underwriters are back. The price lowers and we shout hurray.
The second thing is the dual nature of the insurance we buy for our
planes. Usually, there are two parts = Liability and Hull. The first
pays
people not to sue us when there is damage from our planes. The second is
what we get paid when we damage our poor birdies. Each is evaluated
separately by the insurance companies, and are subject to the same dynamic
as above.
All insurance is rated by experience insuring the risk. Combined with
Liability vs. Hull. your total bill is rendered. So what would cause the
Ercoupe to be more than a T-crate? Probably not the relative piloting
skills of those on this list.
When I look at my `coupe, I see precious metal. Not the alum. sheet;
all them snazzy, specialized castings and extrusions. Start with the nose
wheel and look at it. The sensuous shape of the single-fork nose would be
hard/expensive to reproduce, but it is not the main problem. Look at the
center section and wing spars. Observe the curves of the rudders. Not
Cheap - any of it. I might note that I am envious of the Luscombe
people. Their bird is actually back in production. The people that did
it
actually looked at the Ercoupe. Why not the `coupe? Luscombe's are
mostly
bent sheet - that can be easily built in Checko, or Slovakia, or where
ever. Bottom line = curves cost, but that's why my wife likes the
Ercoupe.
I received a quote for insurance the other day. Liability was not too
bad, really. $450; `bout what I paid last year. Total bill? Over a
grand. Hull was a bit rich for my blood (so are alot of other things,
Ed...). So I'll pass on the Hull, like I did last year. I can do this,
for there are no secondary owners = banks, partners, etc., that would have
to be endemnified if I rolled 29H up into a ball.
Back to the T-crate. This fine classic airplane is of the so-called
'tube and rag' construction. Look in Trade-A-Plane, the back of Sport
Aviation, or in Kit Planes Magazine. There are hot and cold running tube
dealers. Cloth covering usually has a plethora of suppliers as
well. Where do Ercoupe parts come from? Univair, and that's it. Dispite
what the FAA says, the M in PMA stands for Monopoly, and parts cost
accordingly. Hince the high hull insurance prices on Ercoupes.
Sure want to thank all of those that stayed to the end of my
diatribe. I wasn't able to strike while the iron (postings) were hot, but
had to get this off anyway. Fly with good practices, and allow the
insurance companies a reasonable profit so we don't fly buck nakkid.
Percy in Portland
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