Getting into Flying Insurance Premiums

[Goater90]

Hey Everyone,
I'm new to the forum. I live in central Alberta, and have had an interest in planes since I was a kid. I'm 31 now and considering getting into flying. I am lucky in that my wife and I have half decent paying, steady jobs and have a modest amount of disposable income available. I have gone on a discovery flight at a local aviation school and have been researching about the training, licensing process, different planes, and what it takes to own/maintain them.

Before I dive headlong into this new hobby and drop 12-15000 obtaining a PPL, I have been trying to find more info on the costs of owning a plane, and am finding some variations, mostly I think due to a lot of the information coming out of the States where everything seems to be cheaper. Lots of sources claim an older modest 4 seater like a C172 or PA-28 can be found for 35-45'000 stateside. When I look in canadian classifieds, I don't find many for less that 100'000, a few for 75-80'000. Are planes really that much less expensive down south?
Figures I've found from Canadian sources have been approximately:
2-3000 for yearly inspection
Up to 4,000 per blade for a prop overall
And up to 20,000 for an engine overall on a 172 or pa-28.
I've heard 500-600 per month to rent a heated hanger at a smaller town airport, if you can find one available.
Please correct me if I am out to lunch on any of these figures.

One figure that surprised me, was from the flight instructor after my discovery flight. He claimed insurance on a plane similar to the one we flew, an old C172, pretty beat up and high TT as it's a trainer, would cost around 6-7000 a year for a new pilot with 100hrs in type. From looking around, it sounds like everyone is saying premiums have skyrocketed the last couple of years, but that still seems pretty steep. Do premiums vary by province like auto insurance, or are they federally regulated and the same across Canada? Would premiums drop after getting a few hundred hrs more flying time? After 1000hrs? Just wondering what the average guy pays. What about a slightly larger plane like a C182? Way more expensive premiums?

There are two flight schools within 40 minutes drive that rent C172's for about 150 per hour wet. Are there many private pilots that exclusively rent? Obviously that would come with some advantages and disadvantages, and I would much rather own my own, but at what cost I suppose.

Thanks a lot for your input everyone.

[CpnCrunch]

There are very few planes for sale right now, and everything has increased in price. I don't think you can buy a 172 for 35-45k now (maybe just a very old one).

You can put a cover on your plane and leave it outside and it will be much cheaper than a hangar.

Annual inspection for a 172 costs $720-1600/yr, but you'll likely have other maintenance issues so budget another few thousand. Insurance is around $2k/yr. It shouldn't cost that much more if you just have 100hrs. 182 doesn't really cost more to insure...I was quoted the same as for a 172 even though I have zero hours on 182s.

[photofly]

To a first approximation, there are no PPLs who just rent. Yes, there are unicorns, but there aren’t nearly enough airplanes available to rent to keep any significant number of PPL holders in Canada flying a safe minimum number of hours. Besides which, a weekly/monthly trip to the practice area, solo, gets extremely dull by even the second outing, and that is likely all you are allowed by the renting FTU to do, because they want the plane back by lunchtime for the next lesson to be given in it. If you want to “get into flying” as opposed to getting a licence then giving up, you should have a fairly informed idea of what sort of flying you want to do once you have a licence.

Insurance on an old 172 for even a new PPL shouldn’t be much more than $2k, as stated.

[mmm..bacon]

I seem to remember older, less refined, commercial pilots telling me that "if it flys, flucks, or floats, it's cheaper to rent"!
Perhaps look into any partnerships in your area...

[PilotDAR]

Though the effect was small on my premiums this year, I have been told that they have gone up quite a lot. A few serious accidents a couple of years ago are coming back around in increased premiums. And yes, planes are getting more costly, so those less than $50K choices are fewer. Consider a decent two place, rather than straining yourself for a modest four place, which you really won't use to its full capability that often.

If you're planning to get a PPL, you're planning to fly after you earn it. Renting is possible, but costly, and often limiting in your "operations". Often flying schools who rent to PPL's want then planes earning revenue as much as possible - so no down time. You can't take the plane for the day, and only fly two hours on it. That's something you need to understand, and work out with the provider of the plane. Depending upon your access to a place to tiedown/hangar, and your use, if you're planning to fly a couple of hours a week for years, you're probably better off to buy a plane, or a share in one, and have better access. Compared to renting, it'll be worth it. You have the money out for the plane, but you'll be able to sell it again when you want to move on/up.

If insurance is unbearable, you can consider a very modest plane, and only liability insurance. Yes, it's a risk for you, but even a written off plane has value in salvage - it's only worth nothing if it cannot be recovered at all.

Before choosing on a type, really understand the inspection requirements and or life limiting factors on it. Most light planes are now affected by some kind of rather burdensome inspection, and possible rework. The only common all metal legacy Cessnas and Pipers which are seemingly unaffected by airworthiness inspections at present are very old Cessna 170/172/182, and 150's and 152's. Most other common Cessnas and Pipers have in depth inspection requirements by AD. Great if they pass, expensive repairs if a defect is found, so understand what you could be buying...

[lhalliday]

I rented for a while after I got my PPL. The people who taught me to fly were cool with me renting their planes - indeed, they encouraged it - but students had to come first. The only really long trips people did in the school's planes were CPL long cross-country. Taking a plane to go wander around for a week just wasn't going to happen. I did some 172 rentals with another place who were such a PITA to deal with that I gave up and bought my own plane.

A couple of grand for insurance is typical unless you fly something really fancy. When I was shopping for a plane a Comanche 180 with a For Sale sign caught my eye. Thoughts of maintenance on an old, complicated plane plus insurance on a retractable made me look elsewhere. I need to talk to the insurance company about my plane now - a factory rebuilt engine makes her safer to fly but also increases her hull value. And cost a lot more than $20 grand when all was said and done.

My plane (Beech Musketeer) isn't immune from ADs Of Death. If she fails AD 73-20-07R2 the repair parts are available, but those who have them know what they're worth and charge accordingly. Each annual is only a couple of grand but there are several recurrent ADs and there are always other snags that need to be fixed. The price of owning a plane, in other words.

...laura

[mtall38@hotmail.com]

Hi all, what companies were you using for insurance? Ours just got jacked to $3300, increase of $1k over last, where it also jumped up!

[rookiepilot]

Insurance premiums are more involved than the number of accidents or cost of parts. I understand premiums for strata housing in BC have exploded as well, and less companies will write policies.

It's helpful to understand how the insurance industry actually works, rising premiums are a direct result of government policy re interest rates, before screaming at the insurers.

Insurance companies are required to hold a large percentage of their reserves in "safe" interest bearing guaranteed investments-- to be able to pay claims.

Real Interest rates -- and in many places, nominal -- are negative, just the way governments want them. So they aren't earning income from their reserves, and have to compensate.

The term is "interest rate repression", and it's also why the younger folks can't afford housing. Thank your government for this.

Forget the future impacts from climate change on premiums.

[praveen4143]

Hi all, what companies were you using for insurance? Ours just got jacked to $3300, increase of $1k over last, where it also jumped up!

I have been hearing that insurance premiums have jumped across the board for a lot of people too.

[digits_]

Insurance premiums are more involved than the number of accidents or cost of parts. I understand premiums for strata housing in BC have exploded as well, and less companies will write policies.

It's helpful to understand how the insurance industry actually works, rising premiums are a direct result of government policy re interest rates, before screaming at the insurers.

Insurance companies are required to hold a large percentage of their reserves in "safe" interest bearing guaranteed investments-- to be able to pay claims.

Real Interest rates -- and in many places, nominal -- are negative, just the way governments want them. So they aren't earning income from their reserves, and have to compensate.

The term is "interest rate repression", and it's also why the younger folks can't afford housing. Thank your government for this.

Forget the future impacts from climate change on premiums.

How would losing 5% on the reserves translate in a 40% increase in the premium? Since the reserve is built from my premium, and is only part of my premium, the raise in premium would be less than the loss on the reserve profit.

[photofly]

I think the argument goes the insurer has to sit on (say) $300M in (near enough) cash to meet regulatory requirements for their book. Previously they were earning $12M a year on that, now they're only earning $1M, so they boost income by increasing the premiums.

[laminar]

I'm in the boat of the PPL that is tired of renting. My rental flights are short hops and the aircraft has to be back. I spends hundreds of dollars to spend 30 minutes looking at the runway at some other bodunk city before turning back. IT HAS GOTTEN VERY OLD

I have around 130 hrs TT, and I called around for insurance quotes to get some ballpark figures for the run of the mill basic 2-4 seater with fixed gear, fixed prop. My quotes were around 1700-2k per year for coverage in motion and not in motion.

I trimmed my fixed costs even lower by buying a hangar outright. I won't have to make monthly rental payments or financing payments. Next step is the aircraft purchase, which will be cash with no financing, and allowing for a maintenance reserve.

After that I'll dump money into a savings account for every hour flown that will cover my estimated costs for maintenance, annuals, and yearly insurance payment.

It's been a long road. I probably could have said "YOLO" and bought something on a line of credit but I didn't feel comfortable financing a toy, and then being in a position to also finance a surprise nasty repair.

[Bede]

For private aircraft my guess is that insurance is $500 for liability + 1.5% hull value (wheels) or 4% hull value (floats).

If others want to post their type and premium I can do a simple best fit with Excel and then we’ll have a better idea.

[photofly]

For private aircraft my guess is that insurance is $500 for liability + 1.5% hull value (wheels)

That’s exactly what my last quote came in at, last week.

[Squaretail]

For private aircraft my guess is that insurance is $500 for liability + 1.5% hull value (wheels)

That’s exactly what my last quote came in at, last week.

Mine was about the same when I last bought insurance last year.

Of note if your rate is increased from last year, it may be worth while to comb through the the new policy and make sure some boxes for stuff you don’t want are checked. My insurance provider kept trying to push extra terrorism insurance to the tune of an extra $500 per year, among other things. Also notable on the last application was a detailed breakdown of the avionics load out, but fortunately the old Narco didn’t rate as much value. I think some providers may have wised up to the idea that the toys inside may be worth as much as the airframe, since there was a section about hand held devices I may wish to insure additionally.