Having narrowed my decision to a Cirrus SR22 non-turbo, next up was to price insurance. I called up Cirrus Insurance, and when I heard the estimated rates for my insurance (I’m a new pilot and had 0-time in the Cirrus), I thought the person giving me the rates was insane. So what was the range? $12,000-$18,000 per year. She couldn’t tell me where on that range I’d fall until I provided full details and asked for a formal quote.
Checking with other insurance agents, rates were very similar and some insurance companies will not offer insurance for pilots with fewer than 500 hours. So I had to feel lucky that I could even get insurance in the first place. The rates for aviation insurance are insane. If you do the math, it must be a very lucrative business:
- The range based on experience and certifications is between $6,000 (for an IFR certified pilot with > 1,000 hrs and 100+ hrs time in Cirrus) to $18,000.
- There’s generally a $5,000 deductible making the insurance really only for severe incidents
- If an insurance company could insure 1,000 Cirrus planes at an average of $10K each, that’s $10 million per year in revenue. It’s unimaginable that 1000 cirrus planes would have more than $1-2 million in claims in any given year or about 10-20% of the premiums. Even on the high range of that claim estimate, and assuming a 10% commission for the agent, I expect that the insurance companies are netting at least 70%. Not a bad margin at all! How does one get into this business?
I ended up with insurance through Cirrus’ agent from London Aviation. With 70 hrs and a private pilot certificate, my rate came in at over $13K per year (about $1100/month).