An owner of a Falcon 900 and one of my clients recently forwarded me an email he had received from an individual claiming to be an “aviation insurance broker”. Addressing the Falcon 900 owner by his first name, the sender of the email insinuated they had already been in contact and that he had been “researching the insurance market to find him the best rate”. The broker then listed several prominent insurance companies he suggested were giving him preferred terms.
Next he stated that he had quoted other Falcon 900s (he did not give the year model) and provided a hull rate and a liability premium for a $250M limit. Further, he implied he always gets insurers to grant a No-Claim Bonus, Lay-Up Credits, and flexibility on Pilot Training. The broker finished by saying he would be at his desk that morning working on similar “deals” he had already put together for other jet owners and would welcome my client’s call to discuss.
The term scam “artist” is apropos for some situations, since creative individuals with dubious motives are very good at “painting” an enticing picture. Like most scam emails and letters we receive, they appear very convincing. But when we take a little time and break them down piece by piece, it becomes apparent we are being “worked”. Let’s look at the above email and find the tell-tale signs of a scam in progress.
A Closer Look: How did the email sender know my client’s first name, email address and that he owned this aircraft? That one is easy. There are several companies that sell this type of intelligence. Login and ask for information on all large cabin business jets (or a specific bizjet), and the registered owner, address, chief pilot’s name, CFO, & secretary along with their office location, cell phone numbers and email addresses appear. It’s scary.
By suggesting they had already been in contact, my client thinks “well maybe my pilot or CFO has been seeking a quote from this broker. Clearly if he has been ‘researching the insurance market’ someone gave him permission to do so on our behalf.” Our “artist” then lists several well-known insurance companies with national brand names from which he is getting preferred rates. Since no one would be familiar with this broker’s name or firm, he uses the age-old trick of coat tailing off a known brand.
Perhaps the broker’s most effective tactic is stating premium rates he has gotten for other owners of the same model aircraft. As stated earlier, he didn’t mention the year of the Falcon 900s he claimed to cover, just the type aircraft. The only way to get my client’s or another potential victim’s attention is to promise what we want to hear – a premium too good to be true. Otherwise his game is over. But he doesn’t lie. He simply quotes the lowest rate possible on a Falcon 900, which would be for a brand new one. My client’s aircraft is 10 years old and would not get the new-aircraft rate from any insurance company.
To use a fishing term, the broker then throws out some “chum” – offering coverage options such as a No-Claims Bonus, Lay-Up credits, and flexibility on pilot training. These options are not always available, but then again he didn’t say they were.
The signs are all there. The big red flag is when we have to ask, “who is this guy”? Use Google for a quick background check. Most insurance brokers will have a legitimate looking website, but dig a little deeper and you will find there is no substance. The appearance is all smoke and mirrors.
There is typically no indication how long the broker has been in business, what his insurance credentials are, etc. Also, these brokers will imply they do business with all aviation insurance carriers and will list the insurers by name on their website even though often they are not licensed with them. As it turns out, the broker in this example had already had his license revoked by the same insurers he said were giving him “preferred rates”.
It’s unfortunate that we have to put up with individuals such as the one described in this example, but it’s the world we live in. Questionable actors trash the market, creating the perception that better deals exist while indirectly implying current aviation insurance brokers and insurers have been “ripping clients off”.
Rather than competing on the basis of honesty, integrity and excellence, some sellers cannot escape the lure of easy money and adhere to the philosophy “a fool and his money are soon parted”.