Insurance: Plan on Doubling Your Premium With Lower Limits

By Jon Doolittle | Reprinted from August 2000

If you are considering a light twin, make sure you include the "I" word in your list of things you'll have to pay for. Especially in year one, insurance will be one of your larger fixed costs.

Insuring twins is no different than putting gas in them or maintaining them; it costs more. You may also have to live with a lower limit of liability for the first year. There might be other requirements such as formal training that will weigh in your decision.

While aircraft insurance is still a business of exceptions, most insurers who will cover a step up into a twin will require that you have an instrument rating. Significant retractable time will also help. Some of the carriers will want you to have completed your multi-engine rating and some will let you do it in your airplane.

We spoke to Tom McCarthy, of HCC Aviation, Inc. HCC is a big player in providing coverage to transitioning pilots. We presented McCarthy with the following scenario: Our theoretical pilot is moving from a single-engine retractable into a Seneca, Cessna 310 or Baron 55 worth around $150,000, has approximately 1500 hours, an instrument rating and has just completed a guaranteed multi-engine course.

The highest limit of liability that this pilot can expect his first year will be $1 million limited to $100,000 per passenger. The annual premium would be around $7000 and he would be required to receive 25 hours of dual flight instruction including an instrument proficiency check prior to flying the airplane solo. Comparable coverage for a 6-place single would cost between $2500 and $3500.

The good news for pilots who fly a lot is that the premium would begin to come down after a year. The premium today for the same pilot with 200 multi-engine hours would drop to $5500 and he would be eligible for higher limits of coverage.

HCC, and other companies that insure twins are beginning to require formal a type-specific initial school in some models. Others are even beginning to mandate annual recurrent training. The training required varies from an annual IPC with a high-time multi engine CFI to a trip to a simulator-based school such as FlightSafety or SimCom.

If you're considering this step, make sure that you can live with the cost, the limits and the training commitment. Don't get hung up on year one, but find out what this will cost over the longer haul. Depending upon how much you fly, the quickest ride from A to B may still be in the simpler, slower-and cheaper-single-engine airplane.