It appears that there is some misunderstanding of what the fees paid by members to the AMA pay for.

1) the insurance coverage from the AMA for clubs and landlords is primary. In order to understand what this means, you need to realize that the club pays a $30 re-charter fee each year, which INCLUDES insurance. The fee for a certificate of insurance for the landlord costs the club $60, unless special wording is needed, in which case the fee is $80. In both cases, the amount of liability coverage is $2,500,000.

In case it is not obvious to anyone, individual membership fees subsidize the actual cost of those policies.

What is the actual claim rate? Dave Brown, in one of his 2002 columns in MA stated that about 50% of all claims were generated by clubs, not individual fliers.

If it were not for these policies, it is very likely that a lot of clubs would not exist because commercial policies for that amount would be prohibitive. Even in the case of government owned sites, the insurance policy supplied by the AMA often makes the proposition of having a flying field acceptable to the governmental authority.

2) Model Aviation Magazine serves as a newsletter as well as a magazine. Approximately half of the costs of MA are subsidized by the membership. That amount is about $7 per year. Although there has been debate over the assertion, the AMA position has in the past been that a newsletter to the membership is a requirement for the non-profit tax status of the AMA. That means that it is not likely to go away any time soon.

3) The actual cost for the commercial insurance policy with Royal for 2002 was about $550,000 or about $4 per year per open member (140,000). The Self Insured Reserve, which pays a lot of claims will cost somewhere in the range of $6 per member in 2002.

4) None of the above insurance numbers includes any cost for administration, rents, or any other costs of doing business, and that number is not as readily available as the others. Administration of the AMA is pretty much lumped together in the financial statement and is not broken out.

JR