One of the most common criticisms of the COPA VIP insurance program is that it is only very rarely the cheapest option. I respond to this criticism by saying that this program was designed to offer superior value at a competitive price, not to be the cheapest. Still, with inflation at historic levels in these more uncertain economic times, it seems prudent to deal with the pricing issue head-on.
One of the many features of the COPA VIP Gold product that makes it unique is the availability of a lay-up. For those who may be unfamiliar with what a lay-up is, I will explain. For those who already know, please indulge me. A lay-up is a credit (a return of premium) for an extended period that the aircraft is not flown. Floatplane owners are the most common utilizers of this but not the only people who could benefit in a country like ours with an extended period of uncomfortably cold and challenging weather. Policyholders who know that they will not be flying their aircraft for at least 60 consecutive days or longer can notify their COPA account manager that they will be laying up the plane. They will advise of the start date of the lay-up, and the account manager will notify the underwriter. The availability of a lay-up for private aircraft owners is scarce outside the COPA VIP program, and its value can be pretty high. In fact, it can be more than the difference in premium on a cheaper quote.
From the start date of the lay-up, the aircraft is covered for ground risks only; there is no in-flight coverage for the hull or liability. When the owner intends to resume flying, they must notify their account manager BEFORE the first flight and confirm that full flight coverage has been resumed. We now have a start date and an end date for the lay-up period (there can only be one lay-up period per policy term).
The return premium comes at the end of the policy term when you renew your policy, thus decreasing your annual insurance cost. Let’s take the following example:
Customer A has a Cessna 185 on floats worth $300,000 and is paying a 2.8% rate on the hull. The hull premium is $7,500 annually. Add $800 for $1 million CSL, and the annual premium is $8,300.
They get a competing quote outside the COPA program for a 15% saving at $7,055. This is a significant difference in any economic climate, especially with inflation being what it is today.
Customer A does not fly the aircraft from November 15 – April 15 as a rule (151 Days). The COPA program will allow this aircraft owner to declare that the aircraft will not fly for an extended period. At the end of the policy, on renewal, we will credit the customer approximately $1,551. The lay-up needs to be declared to the COPA account manager at the start, and the customer needs to notify the account manager just before beginning flying in April. If we account for the credit, the COPA Policy was $6,749 ($8,300 – $1,551 credit) or $306 cheaper than the competing terms that did not offer the same lay-up option. What looked like a great deal was not, in fact, the best choice.
This feature is for more than just floatplanes. It is available for any more seasonal flyer who knows that they will not fly for 60 consecutive days or longer and is not readily available outside the COPA program for private aircraft owners.
Steve Godfrey is an experienced pilot with more than 3,000 hours of flight time on 17 aircraft types. He has spent the last 16 years building his career in aviation insurance as both a broker and as an underwriter. He has served as the Head of General Aviation with Swiss Re Corporate Solutions in Canada and has led the national aviation practice at JLT and Arthur J. Gallagher.
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