We’re starting to sound like a broken record in our reporting of the hardened insurance market. But that’s because we continue to hear from owners of complex aircraft (which includes retracs, twins, turbines and even tailwheels) who get clobbered with large premium increases. Some face nonrenewals of their policies despite not having put a scratch on their airplanes in many years of ownership. Some even play a game of Russian roulette and self-insure the hull and liability simply to keep flying. That’s a bad decision, in our estimation.
SkyWatch, with an office in Palo Alto, California, says it’s the underdog in the current insurance climate because it’s taking a high-tech and a more realistic and simplified approach to qualifying pilots of all levels for a variety of policies—from renter’s insurance to liability-only coverage.
Underserviced
The SkyWatch agency has been around for seven years and started in the drone insurance market before adding renter’s insurance and ultimately aircraft owner’s policies to its service menu. It has partnered with Global Aerospace as the primary underwriter for a variety of policies.
SkyWatch believes that many pilots have been underserviced, and in particular, old pilots shouldn’t be passed over for coverage simply because they are over age 70. Moreover, student pilots and those with limited experience deserve a crack at policies, too. We certainly agree. On the other hand, we don’t see the accident record getting much better—and we focus a lot of time examining wrecks.
Indeed, we see pilots of all ages bending airplanes and killing themselves and passengers because of bad decisions and what might be improper training. There is also the growing problem of maintenance- related wrecks as we’ve recently covered in the September 2024 issue of Aviation Consumer.
Still, using senior pilots as just one example, SkyWatch believes it can do a lot more than just blindly declining coverage. It starts with appropriate risk analysis, plus being flexible for the needs of the client. SkyWatch said it was first and only company to offer renter’s insurance policies by the month, week and even on a per-day basis, since some renters don’t need an extended policy.
“There are a few things we noticed and set out to change in the current market. Most recently, we found that many senior pilots aren’t getting the service they need,” SkyWatch representative Elad Shalev told us. He also said there has been a major push by AOPA to solve the issue of older pilots dealing with the hardened market. That’s when it worked exclusively with Global Aerospace to come up with a solution for the over-70 crowd.
What’s the real risk?
Part of the solution, according to SkyWatch, is being smarter about how the company measures risk. That includes being more open about the individual’s risk. Rightfully, if the senior pilot raises no red flags (no accidents, as one obvious example) than there really shouldn’t be an automatic decline of coverage or nonrenewal.
Again using the senior pilot scenario, we asked the company what it looks for when it’s assessing the risk if it’s not looking at age alone. On the surface level and certainly not unique to SkyWatch, there are many factors to consider including the number of hours logged in the specific make and model aircraft to be insured. What SkyWatch doesn’t do, according to the company, is look at age as the primary factor. As we’ve mentioned in other reports, some of the research concludes that older, more experienced pilots perform certain tasks better than younger pilots with less experience. But, it’s not that cut and dry.
Moreover, we stand behind our belief that since everyone ages very differently—and the underwriter rarely gets to meet the client—how can one make any kind of accurate judgment about who to offer insurance to and how much to charge for it? If there’s a bright side when assessing risk among older pilots, it’s easy to argue they’ve got weather wisdom, stick and rudder skills and simply know how to fly their aircraft—and know when to keep it parked. The other challenge in risk assessment is that many of the studies that are based on accident analysis include only NTSB-reportable occurrences, which are only a fraction of all aircraft insurance claims.
Liability only, application process
SkyWatch says that if an aircraft owner is being declined for a full-up policy, it can offer liability-only coverage. For some senior pilots in the current insurance market, it may be the only the option to stay covered if they’re willing to self-insure the hull. Obviously for a basic airplane that’s doable, but probably not so for the majority of owners with high-performance models unless they’ve got unlimited resources.
SkyWatch policies include liability coverage (bodily injury and property damage) ranging from $500,000 to $1 million per incident, up to $100,000 per passenger. Medical expenses of $5000 are included in the policy. Coverage is available to residents of all U.S. states but excludes Alaska.
We asked SkyWatch if their flexible selection process comes at a price premium and were told it’s tough to say and depends on many factors. A senior pilot might get a cheaper policy than a much younger pilot and vice versa.
One of the things SkyWatch did to make the process less painful is it created an online web portal; enter your information and the aircraft you want coverage for. One of the other things that SkyWatch set out to do was making the process of actually getting a policy easier, and again that’s available on the website, on the spot. “We’re trying to solve these problems of pilots being underserved by the current insurance market by making use of modern technology,” Shalev told us. He’s referring to the risk analysis algorithms built into the web portal application utility to make it easier and fair for the applicant, while looking at many more factors than age alone.
You can also make changes to the policy on the fly through the website. SkyWatch reiterated that it tries hard in the customer support department, too. While it takes pride in its high-tech approach to writing policies, it staffs the telephones so you can talk with real people when it comes to underwriting, claims and policy issues. One policyholder remarked that he was able to talk with someone on a holiday.
SkyWatch will cover a variety of aircraft, including experimental kitplanes, and it acknowledged that this is a lively market. SkyWatch also offers insurance that caters to flight instructors and student pilots. CFIs and students can get up to $200,000 liability coverage for damage to the aircraft and up to $100,000 per-passenger liability coverage.
We applaud SkyWatch (and AOPA’s push) for recognizing there needs to be a better way to assess risk, and particularly for senior pilots. If you’re among the many who are struggling in the current market, we think the SkyWatch web portal is worth a try.
Visit www.skyWatch.ai.
