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Model Forum / Radio Controlled / Air Models / October 2003One Last Item, maybe of interest U.S. / AMA
FYI: On Sat. Oct 04, '03, at the South Western Aeromodeling Conference, Mr. Carl Maroney presented an outstanding professional presentation of AMA and Insurance. I attended. While I don't have a lot of notes, perhaps you may be interested in these figures. For the CURRENT insurance year SO FAR, AMA has paid premiums and its share of payouts for insurance policies of: Accident and Medical: Premiums $ 106,000.00 AMA Payouts; $332,242.63 Fire, Theft, and Vandalism: Premiums $7,277.50 Liability Basic: $850,000.00 with layers $1,000,988.35 Total insurance costs to AMA so far: $1,446,508.48 Personal observation: AMA paid the 332 grand out of the deductions. Information about the insurance company's payouts was not available. There are outstanding claims in FL(2), IL, CA, TX, and MS. One in FL involves a member that jammed a chisel through his own hand. The one in TX is in MY club. (Hung a G-38 on a recommended 1.2 --1.8 airframe [Sig Extra 300XS] without any reinforcement. I wouldn't hang a .60 on that without a rebuild) After a few flights and a couple bumps in the grass, XX?X was tacking engine from front and the G-38 and firewall BIT him -Big time) One in CA, guy lost arm at elbow, 22" fiber prop. One older story; Guy was injured severely by another flier. The "another flier" had forgotten to pay premiums on HO insurance. HO company weaseled out. AMA was primary for, I believe -- not in my notes -- some 1.2 mil. settlement. Injured party was unable to continue his profession. Airline Pilot. Four AMA connected deaths this year so far: CA. CO. FL, IL, Chasing FF on motorcycle/injured/died of complications. Heart attack (CO but in OK at SAM meet.). Watching airplane walking back with head high, trips and hits head, and I forgot to note one The Insurance program is for our protection against the other guy's error and injuring us. Be certain your fliers are AMA. One BIG Point: If A turns-on on B, and B causes injury/damage to C, then B is protected, however if A gets sued by C and/or B, A is all on his own - SO USE GOOD PROTECTION - USE SAFE FREQUENCY!!! (;-)) Some interesting Safety Discussion however a couple questions will be reviewed. I questioned the new AMA 2004 Safety Code which precludes any RC equipped for "Autonomous" flight. There will be a review of the definitions and wording. I was assured that auto-pilots such as FMA would be retained. The other big topic is that we need more Info about accidents passed to the membership. Hate to say it but even Sandy Frank was all for that subject. The Insurance Broker (non0AMA) was also on our side. Carl M. promised to take it to the Safety committee. Elect me for D-VIII VP and you WILL get more information. Sorry for all you D-8 and neighboring persons that missed the SWAC. I had a BALL! Spent far too much money!!! ? ? _____________________________ Horrace D. Cain AMA 539 CD & Leader It's 'FLYING TIME' again, I'm gonna' leave you! > One older story; Guy was injured severely by another flier. The "another flier" > had forgotten to pay premiums on HO insurance. HO company weaseled out. AMA was > primary for, I believe -- not in my notes -- some 1.2 mil. settlement. Injured > party was unable to continue his profession. Airline Pilot. Do you know if the responsible party had been notified of impending cancellation? It might make a difference. If he had, then the insurance company didn't "weasel out," but in fact had no contract with the guy. I also wonder how many apartment dwellers even have liability insurance. Even as a home owner, I only carry 300,000/500,000, and that's not enough to keep the legal leeches from AMA's doorstep. In our insanely/inanely litigious country, unscrupulous lawyers will sniff out the "deep pockets" and go after that party for collection. Even if the guy HAD paid his premiums, I'll bet that he didn't carry anywhere near enough coverage to keep the lawyer from going after AMA. I therefore propose that AMA have a tiered membership cost structure, with those carrying a million bucks in liability paying half what those of us with lesser amounts pay. Also, ALL open members should be required to carry a set minimum. Whaddaya think about that? -------------------------------------------------------------------------- "The first thing we do, let's kill all the lawyers." Shakespeare, Henry the Sixth, Part II > I therefore propose that AMA have a tiered membership cost structure, with > those carrying a million bucks in liability paying half what those of us with > lesser amounts pay. Also, ALL open members should be required to carry a set > minimum. Whaddaya think about that? I think it's a bad idea. Right now, with everybody receiving the same coverage from AMA, administration of the program is very simple and efficient. What you're proposing would require the AMA to thoroughly review each member's homeowner's / renter's / umbrella policy on an annual basis at minimum. They would have to keep track of whether or not each member's homeowner's policy premiums are paid up to date, and send you a bill if you let your homeowner's policy lapse. What about people that adjust their policies, causing them to move to a different tier on the AMA side? The AMA would be constantly sending bills and refunds throughout the year. There would inevitably be people that are underinsured or uninsured. I shouldn't have to go into the implications of that situation... This is a task that is several orders of magnitude more involved and complicated than what they have right now, and does not even consider verifying insurance coverage at events. I guarantee you that it won't be more efficient. I guarantee you that it will cost significantly more to administer a complex program like that. I guarantee you that your AMA dues will not go down, even if you carry a hefty homeowner's policy. I should not need to remind you that the AMA is not an insurance company. They provide a fixed amount of coverage as a benefit of membership. Yes, people PERCEIVE that the only reason they need the AMA is for insurance, but they are blissfully ignorant of everything that goes on behind the scenes. > I think it's a bad idea. Right now, with everybody receiving the same > coverage from AMA, administration of the program is very simple and > efficient. Most of us pay our dues annually or bianually. How complicated would it be to send a copy of our insurance declarations page with each renewal? Sure, some would change coverage, and some would let it lapse, but if AMA were to declare that its coverage is to be only secondary, never primary, some of the "deep pockets" problem would be circumvented, and it would force members to be more personally responsible. As you say, it might make things a bit more complicated for AMA, but one would have to weigh the benefits of reduced losses against the ramifications of added complexity. I suspect AMA could easily affore one or two additional employees if it didn't have to shell out several hundred thousand bucks a year. > > I think it's a bad idea. Right now, with everybody receiving the same > > coverage from AMA, administration of the program is very simple and [quoted text clipped - 10 lines] > easily affore one or two additional employees if it didn't have to shell out several hundred > thousand bucks a year. I don't think this is a great idea. Here is why. The problem is that there are MANY apartment tenants who do not have any homeowners liability coverage. In effect what you suggest forces the average member to take extra steps to retain his membership. Not only is the cost of the review going to more than eat up savings, but the member will look elsewhere rather than put up with the extra work. > I don't think this is a great idea. Here is why. > [quoted text clipped - 3 lines] > the cost of the review going to more than eat up savings, but the member > will look elsewhere rather than put up with the extra work. I think it *might* be able to work like this... If you have minimal insurance, you pay the same as now. If you can prove at renewal you have, say, a 1 million umbrella policy, you get a substantial discount. If you file a claim and you've let the 1M policy lapse, then the AMA insurance is null and void as well. In other words, make the AMA insurance good only *if* you keep up the required primary insurance. That eliminates the administrative work, and eases the AMA's liability, no? But maybe not... :-) Jack > > I don't think this is a great idea. Here is why. > > [quoted text clipped - 16 lines] > > Jack I don't know if that is a good idea or not. However would you want to be hit by some idiot who let his HO lapse? Think about it for a while, it gives me the shivers. > Most of us pay our dues annually or bianually. How complicated would it be to send a copy of our > insurance declarations page with each renewal? Sure, some would change coverage, and some would > let it lapse, but if AMA were to declare that its coverage is to be only secondary, never > primary, some of the "deep pockets" problem would be circumvented, and it would force members to > be more personally responsible. Geoff- Not too long ago I was in agreement with what you said above. I carry HO and then some (umbrella); flying model airplanes is specifically covered - only exclusion is that models are not covered if capable of carrying human passengers. I guess I can live with that. My AMA coverage is superfluous, as it is secondary and would only pay after the umbrella's limit is exhausted, very unlikely as the limits are about the same. Problem is, even a small claim on my HO will almost certainly elicit a cancellation/non-renewal notice, and the umbrella goes too, as it is conditioned on my having HO with specified coverage minimums. Not good, AMA coverage no help - but could it be? I'm seriously considering asking my agent for a waiver on my HO to exclude coverage for model aircraft flying, or finding another provider that does not include that coverage in the policies they issue. Sound like I've gone off the deep end? Not really - my AMA coverage would then be primary, and a claim for a modeling mishap goes to them. My HO coverage doesn't pay and the risk of losing that coverage is reduced. Not a small consideration in CA - many HO providers are history here, folded or pulled out the state, due primarily to the leftist politicos' insistence on running their businesses for them. AMA could do me and all the other members with HO a much greater service by providing us with primary liability coverage for the small claims (say under 5 figures), rather than a backup that kicks in for the really big ones. Abel Seems like that's where the UMA comes in. Their insurance is primary and inexpensive compared to other sources. When I return to the US, I will have UMA and AMA. -- Paul McIntosh Desert Sky Model Aviation http://fly.mcintoshcentral.com > > Most of us pay our dues annually or bianually. How complicated would it be to send a copy of our > > insurance declarations page with each renewal? Sure, some would change coverage, and some would [quoted text clipped - 30 lines] > > Abel >Seems like that's where the UMA comes in. Their insurance is primary and >inexpensive compared to other sources. When I return to the US, I will have >UMA and AMA. Yep, IMO UMA is a greaat way to buffer the more expensive HO & Umbrella. Actually I have two separate HO policies each with a different company for a different house, plus an umbrella policy. Still, I carry UMA membership at $38 which is a $2,000,000.00 Primary Liability and $10,000.00 for Medical. That buffers both the personal primary and AMA. Simple personal financial planning. Horrace Cain AMA 539, UMA 7160 > Seems like that's where the UMA comes in. Their insurance is primary and > inexpensive compared to other sources. When I return to the US, I will have > UMA and AMA. You're right, Paul that does seem like the best option for now. I think AMA is missing an opportunity, though. If I could get coverage equal to UMA's from AMA, even at additional cost, it should be advantageous to me and others similarly situated, and one would think AMA would have to benefit as well. Why push this business off to a competitor by offering an inferior product when you could offer an equal or better one at less cost to a market that you already hold captive? Guess you can tell I'm not an MBA. Abel UMA is NOT a "Competitor" for AMA. UMA does not do anything BUT insurance... It WOULD be advantageous IF AMA DID offer a "special - insurance only" package (UMA) in ADDITION to all the other things that AMA DOES offer... COULD be profitable for AMA.... That would have to be a seperate company though as that WOULD be a 'For Profit" venture of sorts, I think.... BTW, I am a UMA member too... Just in case!  SignatureBob Severance - AMA 7989 LM, CD ~ UMA 7173 San Antonio Prop Busters AMA Charter # 1227 > > Seems like that's where the UMA comes in. Their insurance is primary and > > inexpensive compared to other sources. When I return to the US, I will have [quoted text clipped - 10 lines] > > Abel Able, The AMA has been missing this opportunity for years. Ever since the SFA came and went. By their business practices it's obvious the insurance is at the very least, the hook for the vast majority of members. Why not admit it and improve things for eveyone? Perhaps really compete with UMA on an equal footing? Or does the AMA think they're the Microsoft of the model world? Maybe! But what's that they say about pride and a fall? Bottom line is, their only real interest is the money! And I am an MBA. > > Seems like that's where the UMA comes in. Their insurance is primary and > > inexpensive compared to other sources. When I return to the US, I will have [quoted text clipped - 10 lines] > > Abel > You're right, Paul that does seem like the best option for now. I > think AMA is missing an opportunity, though. If I could get coverage [quoted text clipped - 4 lines] > equal or better one at less cost to a market that you already hold > captive? Guess you can tell I'm not an MBA. Why? From the way it sounded, the AMA was only able to secure a carrier at the last minute for this year. It's hard enough getting a company to step up and provide coverage when the insurance is SECONDARY for an organization the size of AMA. Secondary means that the carrier is less likely to have to pay out for claims, yet the AMA's previous carrier balked, and from the sounds of it, there weren't too many carriers that wanted to have anything to do with us (produced high/unreasonable bids as a courtesy). Too much of a risk. I'm betting that the cost of upgrading the AMA coverage to primary, or providing primary coverage at additional cost, based on the AMA's claims history and the size of the organization, is going to be very expensive, perhaps cost prohibitive. Okay, you're probably thinking, "Well, why didn't the UMA have any trouble finding a carrier for their PRIMARY coverage?" Rumor has it that UMA's carrier is the same as AMA's, first of all. If that's true, then that says something about the company, that it's willing to take risks that other companies won't. Second, the UMA is a much smaller organization; there's a lot less risk, even with the higher limit and the fact that it's a primary policy. Third, the UMA has no claims history. If/When the UMA is subjected to a few million-dollar claims, they'll have the same trouble as AMA in finding an insurance carrier to provide coverage at a reasonable cost. Yes, and No: All the carriers entering bids waited until the last minute. Royal was so sure that they would get the bid (Documented in AMA EC minutes that Hdqtrs. only wanted Royal) and when AMA was offering $100,000.oo over the lowest bid to Royal, then Royal held their ground for another $100,000.oo but Ol' Carl pulled the rug out from under them and took the lowest bidder saving $200,000.oo +/- change. Good Work Carl. >I'm betting that the cost of upgrading the AMA coverage to primary, or >providing primary coverage at additional cost, based on the AMA's >claims history and the size of the organization, is going to be very >expensive, perhaps cost prohibitive. No need to UPGRADE what is there, just have an optional primary policy at the whatever it costs + administration fees. Some will pay, some will not, no need to make it mandatory. >they'll have the same trouble as AMA in finding an insurance carrier >to provide coverage at a reasonable cost. What defines reasonable? At the current price including the payouts: >>>>Total insurance costs to AMA so far: $1,446,508.48 <<<<<<<< Round that off to 1.5 mil. and say about 170,000 people, that is less than $9.00 per person. A rather small amount for the assurance that anyone damaging YOU/YOURS, can be financially responsible and you can also provide for damage you may cause. Insurance expense as something BIG is purely a myth. There are other items much more expensive. Horrace D. Cain <nested post(s) snipped) > Why? From the way it sounded, the AMA was only able to secure a > carrier at the last minute for this year. It's hard enough getting a [quoted text clipped - 4 lines] > weren't too many carriers that wanted to have anything to do with us > (produced high/unreasonable bids as a courtesy). Too much of a risk. Coverage for members that don't have other insurance is primary. I don't know what is the ratio of the populations with vs without other coverage, but I was only suggesting that the latter might be upgraded to primary coverage. Why not? Oddly, the mention of tiered rates always elicits a lot of flak, but we really have it now. Members that don't have HO are covered by AMA as primary, those that do are not, though both groups pay the same. It just seemed that since some already are provided with primary coverage, the rest could be too, at added cost proportionate to the total number then covered vs the fraction provided full coverage previously. > I'm betting that the cost of upgrading the AMA coverage to primary, or > providing primary coverage at additional cost, based on the AMA's > claims history and the size of the organization, is going to be very > expensive, perhaps cost prohibitive. It's certainly easier to presume so than to go shopping. > Okay, you're probably thinking, "Well, why didn't the UMA have any > trouble finding a carrier for their PRIMARY coverage?" Rumor has it [quoted text clipped - 6 lines] > they'll have the same trouble as AMA in finding an insurance carrier > to provide coverage at a reasonable cost. Not clear what the significant issue is on the first point. Try doing the math again on the second point. Wouldn't it seem that an insurance company ought to apportion the cost of projected overall risk on a per-premium-paying-client basis? I kinda suspect they do. On the third point, it seems likely that UMA will field relatively fewer claims than AMA, simply because their member base is less apt to be associated with clubs, where the the bulk of AMA's claims come from. Frankly, my interest in what business AMA might pursue at this point has waned to idle curiosity; UMA does offer something of value to me, as Paul and Horrace pointed out, so I'm going that route. I've had reservations about the long and growing list of exclusions in what AMA offers anyway, especially those that aren't documented. Abel > > One older story; Guy was injured severely by another flier. The "another flier" > > had forgotten to pay premiums on HO insurance. HO company weaseled out. AMA was [quoted text clipped - 19 lines] > "The first thing we do, let's kill all the lawyers." Shakespeare, Henry the Sixth, > Part II I suspect administration costs would eat up any savings. Very interesting report! Thanks for the info. It would be a good thing for more people to know what is actually going on, but unfortunately most folks would rather just pursue the hobby than take the trouble to figure out how it all works. However, if it is reported with a lot of interesting/gory details then I believe that it would generate more interest to the members. I know this sounds cynical, and you probably don't know if I'm being sarcastic, but I'm not. That's why you learn grammar by reading interesting stories in school. (OK, that may be a bad example.) Anyway, if the leadership tries to cover up the embarassing details, then we feel like the door is shut to us, and all we hear about is the boring stuff. But people would actually take an interest if they knew that a guy lost his arm and another guy lost his career, and we would therefore be more interested in the dry details of what is to be done about it. |
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