Why Could Insurance Rates Be On the Way Up?

By Adam Hunt

For a long time, COPA members have enjoyed very low aircraft insurance rates and we continue to provide this valuable service to our members. However, insurance premium rates for the COPA insurance program may be on their way up in 2007. It is easy to jump to the conclusion that this is due to “greedy insurance companies”, but the actual reason is because COPA members have been damaging too many aircraft!

I was recently sent data for all the insurance claims from the COPA aviation insurance program covering the years from 2002 to the summer of 2006. Our program covers more than half the privately registered aircraft that are insured in Canada and the claims reports for this period total over 300, a rate of about one claim per hundred insured aircraft per year. The good news is that means 99% of insured owners did not file a claim each year!

Not all the reports resulted in insurance claims being paid as some were not covered, some were withdrawn and some are still being considered or are before the courts. Many of them are for very small amounts of damage - only a small number are major accidents. Nevertheless, all the reports are a result of some sort of aircraft damage and the picture that emerges when the data are analysed puts a new perspective on where the risks are in personal flying these days and what may cost aircraft owners money in insurance premiums in the future. If we can reduce the number accidents and the claims made perhaps we can prevent future increases in insurance premiums.

Each insurance report was classified and then the numbers were totalled to look for trends. Not all accidents could be classified with a high level of confidence. These were marked as “undetermined” and comprised 7.7% of the total.

The remainder fell into 42 classifications. In abbreviated form, here are the top dozen factors:

1.      Physical Environment –Windstorm - 12.6% of claims. Windstorms caused the largest number of claims to be filed. These were all ground damage to aircraft, so the good news is that no one was injured in these accidents

2.      Skill-based Errors - Poor Technique - Loss Of Control On Landing - 11.9%. These were all likely caused by lack of skill or recent practice and not lack of original pilot training, as I assume that all these pilots were able to demonstrate their mastery of that skill on their licence flight tests. Many of these accidents involved crosswinds (some of them quite light) and the pilot’s apparent inability to deal with them.

3.      Technological Environment - Engine Failure - 10.0%. This number is surprisingly high.

4.      Physical Environment - Hail Damage - 9.4%. Again these are all ground damage and no one was injured.

5.      Perceptual Errors - Misjudged Distance or Clearance - 5.8%. These were mostly taxiing accidents where the aircraft was too close to another plane or object and hit it, although one was a wire-strike on landing.

6.      Skill-based Errors - Poor Technique - Loss of control during take-off - 4.5%. These are similar to the landing accidents described above and probably show a lack of skill and recent practice.

7.      Decision Errors - Inappropriate Manoeuvre or Procedure - 4.2%. These were mostly poor decisions to taxi aircraft on unsuitable surfaces that resulted in prop strikes.

8.      Human Environment – Theft - 3.9%. The majority of these were break-and-enters to steal radios and loose equipment although a few attempts to steal engines, props and even whole aircraft were noted.

9.      Skill-based Errors - Poor Technique – Stall - 3.2%. Like the takeoff and landing accidents these seemed to be mostly a lack of skill and practice. Accidents resulting from stalls are often fatal because they occur at low altitudes, otherwise they wouldn’t be reported as insurance claims.

10.  Skill-based Errors - Omitted Step in Procedure - Landed gear-up - 3.2%. Proper and consistent use of checklists usually prevents these very costly events.

11.  Human Environment - Vandalism - 3.2%. Intentional damage done to parked aircraft.

12.  Physical Environment - Snow Load Damage - 2.6%. Surprisingly many of these were floatplanes that were sunk under snow loads while still on the water. Go figure!

An honourable mention goes to those accidents caused by starting the engine with the tow bar attached. These accounted for 1.0% of claims.

There are some definite trends here! First, 33.9% of the accidents were the result of skill-based errors compared to only 6.5% assessed as poor decision-making. Assuming that these pilots had the skills when they passed their flight tests, it seems that their skills had degraded to the point where landings and even take-offs were not assured. These pilots need more practice to ensure that they have the skills. That means if you are rusty get a checkout with an instructor and make sure you fly regularly to keep your skills up. To keep this in perspective this applies to 1/3 of the 1% of pilots each year who have a claim – 99.7% of pilots flying seem to be managing their flying currency well. Those who aren’t will cost the rest of us increased premiums.

The second trend is that a lot of damage is happening to aircraft when they are on the ground and tied-down, most often outside and exposed to the weather – windstorms, hail, theft, vandalism and snow loads being the largest factors. Storing the aircraft in a secure hangar would go a long way to solving most of these issues.

While there were some accidents involved in putting aircraft in hangars – hangar doors were closed on aircraft and even a racoon fell from the rafters and damaged a wing quite seriously, aircraft fare much better indoors than outside. In many parts of Canada there is a serious shortage of hangar space – this is an issue that needs to be tackled locally at individual airports by owners and COPA Flights. More aircraft need to be stored indoors.

A third item to note is the high number of engine failures. Most of these were not on ultralights powered by two strokes, amateur-builts or O-M aircraft maintained by owners, they were on certified aircraft maintained by AMEs and AMOs. Are owners getting the planes properly maintained when they should be, or are all problems and snags being left until annual inspection time?

Finally, there are some accidents that are easy to prevent if we follow our checklists carefully, such as gear-up landings and starting the engine with the tow bar attached. These are easy to prevent, but we have to use the checklist, slow down and not allow ourselves to be rushed. “Tow bar checked - stowed” is the first item on your pre-start checklist isn’t it?

So there is a short list of things that COPA members need to do better at to reduce accidents and head-off future insurance rate increases. If we are not successful then we will continue breaking airplanes and we will pay more for insurance in the future.

The accident reports were all analysed using the Human Factors Analysis and Classification System (HFACS) designed by Douglas A Wiegmann and Scott Shappell as described in their 2003 book A Human Error Approach to Aviation Accident Analysis. This system uses Dr James Reason’s “Swiss cheese” model of human error and turns it into a useful tool for classifying accidents. Broadly, HFACS identifies accidents by layer. The first layer is “Unsafe Acts of Operators” and includes errors and violations that directly cause accidents. Taxiing onto an active runway without appropriate clearance and colliding with another aircraft is an example of an unsafe act. The second layer is “Preconditions of Unsafe Acts” and includes adverse mental and physiological states along with personnel and environmental factors. Taking off into the face of a thunderstorm, flying while exhausted or under pressure to go, are examples of preconditions of unsafe acts. The third layer is “Supervisory Factors”. The fourth layer is “Organizational Influences” and this includes poor aircraft design, regulatory oversight and company culture issues. The HFACS system is the current global standard for accident classification and is used by the Canadian Forces.