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Age and Aviation Insurance

Weighing the Pros and Cons of Hiring a Veteran Pilot

As Francis Bacon has it: “Discern of the coming on of years, and think not to do the same things still: for age will not be defied.” Stuart Hope discusses the insurance issues related to older pilots and examines how underwriters view and address the issue.

Probably the benchmark most often used to define an “older” pilot is the mandatory retirement age for airline pilots.  In the USA that limit is 65, increased from age 60 five years ago by the FAA. Insurance underwriters do not have a mandatory cut-off for insurability of pilots, but are largely influenced by the age 65 rule.

Typically age is not a factor for corporate aircraft flown by a single pilot who has not reached his or her 65th birthday, but for every year past that age, he or she becomes more difficult to insure (without some modification to the policy wording, conditions, etc.)  Underwriters don’t like to “non-renew” an account, which they are more likely to do as the pilot ages, so they are reluctant to continue policies beyond 65.

PROS AND CONS

Among the pros of retaining or hiring an older pilot is that they bring a tremendous amount of experience to the table for a flight department. Many valuable safety lessons in aviation are simply learned through “the school of hard knocks” – namely, experience. Many passengers feel safer with an older more seasoned looking aviator than with a young “wet behind the ears” pilot.

In addition, older pilots typically aren’t looking to move up the career ladder, thereby making them potentially stable longer-term employees.

On the flip-side, among the cons of retaining or hiring an older pilot is that they inevitably bring the increased prospect of a physical event (such as heart attack or stroke) occurring while in flight. In addition, motor skills as well as mental acuity decline in our older years; for some that happens faster than others. It is for these reasons that insurance companies start to put the brakes on insuring pilots past a certain age.

Further, in the event of an accident where several passengers are injured or killed, the plaintiff’s attorney representing the passengers or their estates will paint the aircraft owner as negligent in his utilization of pilots past the age of 65 since “even the airlines know pilots should not fly past age 65.”

Unfortunately, rightly or wrongly, a jury of your peers will get to make that call. Not fair, but reality.

ALL INSURANCE CARRIERS ARE DIFFERENT

Many insurers have similar views of insuring the older pilot, but some are more liberal than others. Furthermore, the underwriter’s position depends greatly on whether the insurance market is soft or hard. A soft market like we have experienced for the past four or more years is characterized by low rates and greater flexibility, making it much easier to place coverage for accounts with older pilots. In a hard market, the opposite is true.

Underwriters use different strategies for crafting coverage for older pilots. If the aircraft is flown single pilot, some will limit the liability coverage to a lesser amount and provide the higher limit when it is flown with two qualified pilots. Some insurers will not write older pilots on a single pilot basis but will continue to insure them up to the age of 80 provided they fly with a co-pilot.

The limit of liability coverage carried has a great impact on an underwriter’s flexibility. An account with a $10M liability limit will be given much greater flexibility than one that carriers $100M. The more money on the line, the more conservative an underwriter will be.

Older pilots can be proactive in addressing an underwriter’s fears by voluntarily submitting to a First Class medical with an EKG on an annual basis and forwarding the results, along with their pilot information to their insurance broker. Also, if an older pilot is in very good shape a picture is worth a thousand words. A face-to-face meeting with the underwriter is also advisable.

At the end of the day, your broker can insure just about any exposure for a price. It is up to you to weigh the cost benefit of your own unique situation in close coordination with your aviation insurance broker to decide what is best for your operation.

1 Comment

  1. Richard pollitzer on April 25, 2017 at 10:06 pm

    I always fly with a copilot when pax on board

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