Minimizing Helicopter Insurance Costs
This month's article is geared toward Law Enforcement/Government municipalities using helicopters for their airborne law enforcement and what can be done to minimize costs. One of the most significant recurring costs for Law enforcement agencies is the cost of insuring their helicopter of fleet of helicopters.
I have seen fiscal reports and discussed with agency officials the options available for reducing costs. One avenue that some have opted for is to "time-share" the helicopter with other agencies, perhaps a neighboring municipality or another government entity. This does have its benefits and helps reduce costs for smaller municipalities or divisions of law enforcement; however, for some or many, this may not be an option.
As with all aviation insurance, a good agent is your best bet in securing a good quote. Ask about their experience with this unique form of flight; their relationships with helicopter underwriters can make a difference in the premium you are quoted. An Agency that specializes in helicopter insurance, that stays current with the latest operational issues, through day to day dealings with the operators of the equipment, and maintains currency through professional memberships and affiliations is the agency best outfitted to work with you to provide opportunities to reduce premium and improve coverage.
It's also not just the agency but the individual producer and his staff/assistants that need to develop an intimate working relationship with you. You need to be able to reach them anywhere, anytime and the right hand (within the insurance agency) needs to know what the left hand is doing. A cohesive unit facilitates the best results. Your agent and the agency they represent need to have a good reputation with the underwriting companies and they need to have a good work ethic, knowledge and expertise to handle and understand your needs. On top of what I have just mentioned – you need to like and trust this individual or group of individuals.
So what will a good agent to do help you lower your premiums? If you are operating a helicopter fleet, a meeting with your agent and the underwriter at your location can help them understand your needs and allow them to see your commitment to safety.
Always use a licensed agent and an "admitted" insurance carrier. A popular "non-admitted" manufacturer's program automatically depreciates the aircraft's value as it accumulates hours.
"Admitted: An insurer that meets the licensing criteria of the state it wishes to do business in and has received a certificate of authority. Also known as an authorized company."
"Non-Admitted: An insurance company that is not licenses to write business in a particular state. Also known as a surplus, excess or excess and surplus lines (E&S) company."
This program also requires that you pay the expenses to recover the downed aircraft and return the helicopter to the factory for repair and it requires that you share any liability insurance you buy with the manufacturer. Sure, you will pay a smaller premium; however, you stand the chance of incurring thousands of dollars in other costs in the unfortunate event of a claim. These relocation and transport expenses coupled with the automatically-reduced hull value and halving of your liability coverage can be a huge burden. It is important to understand all the policy terms and conditions; the last thing anyone wants is a surprise when they need their insurance company the most. The "bargain" insurance company is enticing up front but when you need them the most and the coverage isn't there that you need – you will have blown through budget and then some. Often times it's not a matter of "if" you need your insurance company it's a matter of "when".
Yes – the admitted company will probably cost more money, but the coverage that you will have is worth the peace of mind and will be well worth it should you need to use your insurance.
There are several excellent programs for specific helicopter manufacturers, including the Robinson Program (through Sutton James/Starr Aviation), the Bell/Eurocopter Program (through USAIG) and the Schweitzer program (through W. Brown). These programs are available for airborne law enforcement, municipal and governmental operations as well. Your insurance agent will know if these programs are available for your specific form of flight and how to access them.
While a good working relationship with a competent and qualified agent can significantly help you to lower your insurance costs, keep in mind that the number of helicopters flying is small compared to the number of fixed wing aircraft out there in the skies. Insurance companies base their rates on statistics and the more statistics they have the more favorable the rates can be. Another point to keep in mind is that helicopters rarely have minor damage (dings, hangar rash, etc) when a helicopter has an incident or accident the result is usually more catastrophic. This is reason for the underwriters to have to implement higher rates. Having a good safety supervisor on staff that can work with your insurance company towards developing a sound and safe environment from hangaring of the aircraft to the training of the pilots and the in-flight use of the helicopter can and will go a long way towards making your operation more successful and more cost efficient.
Lastly – I'd like to make a point to law enforcement agencies/municipalities regarding your "pilots". If you haven't already – you should review your workers comp policy with your current agent and make sure there is not an exclusion for "aviation-related accidents". If this is the case – your pilots may not be covered under your present workers comp policy and you may need to seek out a separate policy for them. Many aviation insurance companies today, if they are insuring your aircraft for you, are also able to provide a workers comp policy for your pilots.
If you have any questions, please be sure to direct them to your insurance agent, maintain an open line of communication with that person and use them to help you learn and understand the terms of your policy.
Karla Lehman, started flying in 1988, is a graduate of the University of North Dakota's Center for Aerospace Sciences, is a licensed Commercial and Instrument pilot as well as a licensed Insurance agent for Leading Edge Insurance Agency, Inc.
These articles are purely advisory in nature. Your own certificated flight instructor, the FARs, pilot's operating handbook and various updated transmittals from the FAA or your aircraft manufacturer may alter or affect the information published. Leading Edge Aviation Insurance neither assumes any responsibility for the accuracy of these articles, nor any liability arising out of reliance upon these articles.