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Aviation Insurance Update 1Q 2015

2020 Vision: HOPE for the Future!


Hard to believe it’s already 2015. Harder still to believe that in just five short years, it will be 2020. As our company has grown and matured over its fifty-year history, we recognize the need to be more intentional in planning for the future. In an effort to perpetuate client service excellence and the industry reputation by which we’ve become successful, we’re pleased to unveil a five-year strategic action plan entitled “2020 Vision.” 

Our 2020 Vision encompasses seven continuous-improvement strategies designed to help us get even better at what we do while also allowing us to do more of it. We’re confident enough to believe there are still many business and commercial aviation operators who could use our help in negotiating and crafting their aviation insurance program. We want to be ready for their business while at the same time improving the overall value proposition of our service and trust that current clients enjoy. 

                     THE SEVEN STRATEGIES

 

1. GROWTH: Hire and develop new Brokers who complement our team and even further enhance the company’s bench strength.

2. RETENTION: Ongoing development of Account Executives who offer exceptional service and product knowledge.

3. EFFICIENCY: Implementation of a new, more automated and flexible agency management system.

4. STANDARDIZATION: Improve our standard operating procedures (SOPs) and processes.

5. RESILIENCY: Distill more operational knowledge company-wide to enhance teamwork, promote buy-in and improve cross functionality. 

6. CONTINUITY: Build a succession framework for transitions of equity ownership and develop the next generation of leadership.

7. MARKETING: Strategic communication plan that supports our vision.

Our Marketing strategy includes four new videos we will release each quarter this year that help define “The Power of HOPE.” Check out our first video below! 

                      OUR PATH TO EXCELLENCE

 

       Our Path to Excellence Cover              

Our Growth strategy is also already underway. For years we’ve had six of the top Brokers in the country. In 2015, we are pleased to make that now seven. 

   WELCOME ABOARD NEW BROKER ROBBY PEED!

 

Robby-Peed

Wasting no time executing our Growth strategy, Hope Aviation is pleased to introduce Robby Peed to our clients and industry friends.

Robby is a Clemson University graduate as well as a Commercial pilot and current CFII. Robby also holds the prestigious Chartered Property and Casualty Underwriter (CPCU) designation, along with Certified Insurance Counselor (CIC) and Associate in Claims (AIC) designations.

Robby began his insurance career in claims, serving ten years before moving into sales. He spent the last ten years selling in various niche property & casualty markets. Robby began his aviation career flying out of grass fields with his father and has been hooked ever since. He joins our firm as a production broker for all types of aviation insurance. 


Anatomy of an Aircraft Claim

When Murphy Calls

Your corporation has paid premiums for years hoping it would never need to use the product it had been purchasing since acquiring the firm’s first aircraft, but unfortunately Mr. Murphy surfaced. Your risk manager received a call that the company aircraft was involved in a loss situation. 

No one ever thinks it will be their flight department that has an accident, but even the most seasoned pilots make mistakes and the best maintained aircraft sometimes fail. When the stars align against your company, the result can be as simple as a call from the pilot informing the insurance broker of an inadvertent gear collapse or runway excursion on landing, to a news reporter calling the company receptionist asking if management will comment on its aircraft being involved in a catastrophic accident with multiple fatalities.

Obviously, the handling of these two events from an insurance perspective will vary.

Click here for Stuart Hope’s insight on a “routine” hull claim.

To learn what might happen when the stakes are much higher, click here


Family Assistance Coverage 

In the wake of several high profile airline crashes, including ValuJet Flight 592 in Florida, TWA Flight 800 near New York and Pan Am Flight 103 near Lockerbie Scotland, airlines responded to criticism that their behavior toward the families of victims was callous and unfeeling. Actions were taken that resulted in the Aviation Disaster Family Assistance Act (ADFAA), which was introduced in 1997.

ADFAA dramatically improved the response of airlines to family members of accident victims. Following airline crashes that occurred post enactment of ADFAA, family members were so impressed by the airlines’ compassionate response that they actually called to thank the air carrier. The intent of the Act, which is to provide emotional care and support to the immediate family of a deceased crewmember or passenger as well as re-imbursement for reasonable costs of transporting the family to and from the accident site, lodging near the accident site and grief counseling if needed, appears to have been achieved.

GENERAL AVIATION INSURERS FOLLOWED SUIT

In the last several years, some Business and General Aviation insurance companies have followed suit with the implementation of this coverage. Many of your legacy GA underwriters also provide insurance for the airlines; they felt it simply made sense from a holistic perspective to offer similar benefits for all of their insureds. The coverage was introduced as an endorsement to an aircraft owner’s existing policy and spelled out exactly what was provided.

Like the airline form, coverage is generally meant to provide emotional care and support for the immediate family of a deceased crewmember or passenger and can include notification of the next of kin, establish an information distribution center, personal counseling, and even assist with creating a suitable memorial on or near the crash site.

In the aftermath of a fatal aircraft accident, life for the family of an accident victim as well as the aircraft owner becomes frantic and chaotic. These services will feel like a life-line at the time.

RULES OF THE ROAD

Family Assistance Coverage (FAC), if offered by your insurance carrier, has a comprehensive list of benefits. Ask your broker if your policy includes provisions of the FAC.

  • FACs are typically added by endorsement (if your insurer offers it). Request your aviation insurance broker to check with your insurance carrier and add it if available.
  • Not all accounts qualify for FAC coverage. 
  • The coverage normally has a negotiable dollar limit for each person, which can range from a low of $25,000 per person to $500,000 or higher. One insurer doesn’t have a ceiling on the coverage limit.
  • The specific coverage wording varies by insurance company, some broader than others. This element of FAC is tricky to ascertain. Your aviation insurance broker can help you decipher the details.
  • Coverage applies for a time-limit of a year from the date of the accident.

Each insurance company treats FAC coverage a little differently. Some insurers make the argument that the relevant provisions are already covered under the liability coverage component of the policy and therefore do not need to be endorsed. They argue that by endorsing FAC provisions on a policy and spelling out exactly what is covered, the endorsement actually restricts coverage since benefits have been specified. The insurers who are offering the coverage by endorsement make the argument that without such specifics the aircraft owner will not know what the insurance company will actually cover. Both interpretations are probably right to some extent.

In today’s environment of news that travels in real-time over social media, insurance companies and aircraft owners need to make sure they are on the same page after an accident.

The first rule is ALWAYS the same. Take care of the people! Not only is it the right thing to do, both the insurance company and you as the aircraft owner have a brand to protect. How you treat and take care of the people involved in a tragedy means everything, now more than ever.

It is imperative that family members of victims after an accident be handled by individuals who have received formal training in this area. Mishandling the situation is easy to do by well-meaning but untrained staff. Mistakes and miscues cannot be undone. Make sure your flight department is aware of FAC and incorporates the tool of Family Assistance Coverage in your Emergency Response Plan.

New & Noteworthy:

Follow “Aviation Insurance” on Twitter@HopeAviationIns for the latest news and industry developments that occur in between issues of The INS Navigator

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Client Testimonial

“I wanted to express my appreciation for the fine job your agency as well as the underwriter performed regarding recent issues with my aircraft. The service rendered was outstanding both in results and expediency. An airplane can be an incredible business tool and it certainly is for my law practice. If you and AIG had not timely intervened, significant business loss could have incurred. Instead the problems were resolved in a matter of days. I cannot thank you enough for the terrific service Hope Aviation Insurance offers. I look forward to working with you for many years in the future.”

Charles J. Hodge

Hodge & Langley Law Firm, P.C.



Terrorism Risk Insurance Act (TRIA) Extended Until December 31, 2020

            Congress 

In a rare and early act of bipartisanship, the new Congress voted to extend TRIA legislation until December 31, 2020. TRIA coverage technically expired on December 31, 2014 when Congress adjourned for the Holidays. But the law that President Obama signed on January 12th made the extension retroactive to January 1, 2015 so that there would be no gap in coverage. We do not foresee any immediate repercussions to the way TRIA is generally handled by the aviation insurance markets.   



HOPE Recognized for Promoting National Business Aviation Safety

  EWB Recognition 

The NBAA Safety Committee successfully executed its leadership transition plan during the annual Business Aviation Convention & Exhibition (BACE) held recently in Orlando. Hope Aviation’s Eric Barfield joined the Safety Committee in 2002 and was asked to be a part of the leadership team in 2008. He then succeeded HP Aviation Director Rich Walsh as chair in 2012 and has now passed the torch to Altria’s Steve Charbonneau. Dave Ryan of MedImpact steps up to serve as Vice Chair and Global Aerospace’s Marilena Sharpell joins the leadership team as Secretary. Click here for a summary of milestones and initiatives during Eric’s tenure. 



HOPE for the Holidays Benefits Harvest Hope Food Bank! 

2014 Holiday Service Project 

Hope Aviation Insurance again partnered with Harvest Hope Food Bank for our second annual Christmas service project. This year we worked in the Product Rescue Department, sorting and inspecting food donations from local food drives, and then packaged them for shipment. The mission of Harvest Hope Food Bank is to provide for the needs of hungry people by gathering and sharing quality food with dignity, compassion and education. Harvest Hope distributed over 28 million pounds of food last year and fed approximately 38,000 people a week.



Stuart Hope Elected Airport Commission Treasurer 

              Treasurer Stuart Hope

The Richland County Airport Commission, which oversees the operation of the Jim Hamilton-L.B. Owens Airport (KCUB), recently elected its officers for 2015. HOPE broker Stuart Hope was elected to a four-year term as Treasurer. The airport serves as a reliever providing private and business aircraft easy access to downtown Columbia, SC.