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Insurance idea

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Old 08-10-2007, 02:17 PM
  #1  
mr_matt
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Default Insurance idea

Hello,

The normal AMA insurance is secondary to one's homeowners. So let's assume one's general homeowner's liability policy (or a PUP) has a limit of millions (not uncommon) with no specific exclusion for model airplanes. You have a bad accident and do some real damage and create a claim of say 1 million. Your homowners pays and (just for the sake of arguement) my guess is that after that payout they cancel you and this is the last insurance you will ever be able to get for less than 50K a year in premiums

Now repeat this scenario, except this time you do not have homeowners insurance coverage at all. Now your AMA insurance is primary, they pay the 1 million claim and next year your dues still covers you and it is still 58 (or 68 or whtever the dues are now). All is OK with your home insurance as you never got a claim.

So my question is, can we set up a homeowners general liability (or a PUP) that specifically excludes models, (so that the AMA insurance is now primary). In addition, we set up a second seperate PUP for models (only) that is set up to be secondary to the AMA that will only pay if the AMA limits are hit?

It might help to describe a possible scenario. You have an accident and a receive a judgement against you. Your general homeowners liability (or PUP) denies the claim due to the modeling exclusion built into this policy on purpose. The AMA insurance now becomes primary and has to pay. If for some reason the AMA insurance won't pay or hits the $2.5M limit, your SECOND PUP kicks in.

The advantage here is that for any accident resulting in up to a $2.5M claim, your homeowners will not get touched and you will not loose your insurance. If you have a real debacle (>$2.5M claim) the AMA will pay and then your secondary PUP kicks in and if the secondary insurer boots you it will not affect your main homeowners policy.

Thoughts?
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Old 08-10-2007, 02:55 PM
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Default RE: Insurance idea


Matt-

It is easy enough to get your HO/PUP provider to exclude models. Just ask your agent for a rider and I'm sure they will happily oblige. That would make your AMA coverage primary. It's up to you to decide if you are comfortable with the coverage provided (and the exclusions from coverage), of course. Dunno about obtaining coverage above the limits of the AMA insurance. It wouldn't be a PUP, as they are by nature comprehensive in-excess coverage on top of HO, auto liability, landlord's, etc., coverage. Don't doubt that it could be obtained, but with terms tailored as you would like I expect you might be paying more for admin costs than actual insurance.
AMA insurance for site owners is claimed to be primary, and when it applies the owner's other property insurance is said (in the sales pitch) not to become involved. Frankly, I don't know how that is possible given the subrogation provisions standard in the insurance industry and civil law administered by the states. If you get any info that sheds light on that, please post it for the rest of us.

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Old 08-10-2007, 03:36 PM
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Default RE: Insurance idea

Matt-

I'm not gonna rehash the talk in the locked thread.
I'm just saying you shoud READ the locked thread [link=http://www.rcuniverse.com/forum/m_6181121/tm.htm]Has anyone actually used the AMA Insurance? [/link] , in particular the last 2 pages that deal with having AMA as well as Non-AMA insurance.
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Old 08-10-2007, 10:22 PM
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Default RE: Insurance idea

Matt, a couple of comments.

First, homeowners is a commodity and most insurance companies won't take time to modify their standard agreements to include or exclude risks. In most states, the forms have to be filed and approved in advance by the insurance departments, and companies can't just start including and excluding coverage on personal insurance at will. It is a bit different than commercial insurance, which is much more "customizable".

Next, remember that there is a $250,000 deductible that the AMA pays before the liability policy ever kicks in. If members started to try to make the AMA coverage primary, well, the dues would not stay where they are today. If we started hitting the AMA policy heavily, well, the insurance premiums would go up, or god forbid, the policy would be canceled, and dues would go up. Not a good thing.

People obviously have large claims without being canceled, and usually insurance is available from other carriers or from Fair Plans at affordable rates, even if you have had a jumbo loss. Your scenario of having one loss and not finding coverage for less than 50k a year isn't necessarily reality. Now if they think you torched the house, or you have a habit of filing a loss per year, or you lied on your insurance application, that is another matter.

You will hear a lot of tall tales about what goes on with claims, but believe me, it is a heavily regulated, heavily audited industry and pretty much everything conforms to the contracts and industry standards.
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Old 08-11-2007, 04:28 AM
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Default RE: Insurance idea

Abel question. I'm not much of an insurance guy but...

Let's say I put a rider on my homeowners policy which stated I refused coverage for RC activities and then I put my signature on it. You would have to sign something wouldn't you? Or not? I don't know.

Well let's say you did and then you caused an accident at an RC field, a major one, hurt or killed someone. Couldn't you set yourself up for a potential lawsuit from both the AMA and the person affected by the accident if they found out that you added a rider which you know had risks? Meaning you knew that RC airplanes have risks and you decided to remove insuance from your policy just to save yourself from having to pay more for it in the future? You can't tell me there aren't laws against that, especially civil ones.
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Old 08-11-2007, 04:58 AM
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Default RE: Insurance idea


ORIGINAL: mr_matt

Hello,

The normal AMA insurance is secondary to one's homeowners. So let's assume one's general homeowner's liability policy (or a PUP) has a limit of millions (not uncommon) with no specific exclusion for model airplanes. You have a bad accident and do some real damage and create a claim of say 1 million. Your homowners pays and (just for the sake of arguement) my guess is that after that payout they cancel you and this is the last insurance you will ever be able to get for less than 50K a year in premiums

Now repeat this scenario, except this time you do not have homeowners insurance coverage at all. Now your AMA insurance is primary, they pay the 1 million claim and next year your dues still covers you and it is still 58 (or 68 or whtever the dues are now). All is OK with your home insurance as you never got a claim.

So my question is, can we set up a homeowners general liability (or a PUP) that specifically excludes models, (so that the AMA insurance is now primary). In addition, we set up a second seperate PUP for models (only) that is set up to be secondary to the AMA that will only pay if the AMA limits are hit?

It might help to describe a possible scenario. You have an accident and a receive a judgement against you. Your general homeowners liability (or PUP) denies the claim due to the modeling exclusion built into this policy on purpose. The AMA insurance now becomes primary and has to pay. If for some reason the AMA insurance won't pay or hits the $2.5M limit, your SECOND PUP kicks in.

The advantage here is that for any accident resulting in up to a $2.5M claim, your homeowners will not get touched and you will not loose your insurance. If you have a real debacle (>$2.5M claim) the AMA will pay and then your secondary PUP kicks in and if the secondary insurer boots you it will not affect your main homeowners policy.

Thoughts?
mr_matt,

You have a very insightful strategy that one might be able to take advantage of IMO. With that being said, the chances of an accident that would strap you or anyone else with such great liabilities due to model aviation activities would be far less than the risk of losing your life in a car accident while traveling to the flying field.

We usually give little thought to losing our life or even becoming permanently and severely disabled but become absolutely petrified with the possibility of being held monetarily liable for an accident due to flying a model. I am not sure why that is but what-ifs have made the insurance industry one of the most lucrative games known to man.

Another strategy would be to refrain from activities where risks are great enough that we need such exorbitant liability coverage. I know that sounds really silly but to use insurance as means to take more risk is merely a way for someone to erroneously justify risk of another's life or well being while claiming prudent responsibility. I have had conversations with overly aggressive automobile drivers that cite they are fully covered and feel they can therefore take more risk. An argument could be made that some insurances has the effect of making some activities more dangerous.

Insurance companies are sort of like casinos...they always win but if you find a way to get an edge on the system and get better odds I would be all for it.
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Old 08-11-2007, 10:00 AM
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Default RE: Insurance idea


ORIGINAL: STLPilot

Abel question. I'm not much of an insurance guy but...

Let's say I put a rider on my homeowners policy which stated I refused coverage for RC activities and then I put my signature on it. You would have to sign something wouldn't you? Or not? I don't know.
No. You can do anything you please with your insurance, and I don't need to sign off on it. You may refer to this reply as granting you permission to do so.

Well let's say you did and then you caused an accident at an RC field, a major one, hurt or killed someone. Couldn't you set yourself up for a potential lawsuit from both the AMA and the person affected by the accident if they found out that you added a rider which you know had risks? Meaning you knew that RC airplanes have risks and you decided to remove insuance from your policy just to save yourself from having to pay more for it in the future?
How would dropping coverage for a specified risk from an insurance policy be any different from dropping the policy altogether and/or going to another provider that does not cover that risk?

You can't tell me there aren't laws against that, especially civil ones.
I know, Dion, I know.

Abel
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Old 08-11-2007, 07:22 PM
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Default RE: Insurance idea

I think that the AMA should make their insurance primairy with a deductible of maybe
$1,000.00 kind of like the way MAAC in Canada works. Even if it causes a slight
increase in the dues I think in the long run it would be worth it.

I would feel better if i didnt have bring my homeowners ins in if i had model accdent
and the AMA is required at 98% of the clubs in the USA it only stands to reason that
their insurance should be primairy.
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