The fatal collision between a recreational airplane and a tourist helicopter over the Hudson River should not affect rates for such planes, but could possibly impact helicopter coverage, according to two insurance brokers.

On Saturday, Aug. 8, a single engine Piper PA32 flying from Teterboro Airport in New Jersey collided with a helicopter carrying five Italian tourists over the Hudson River between Manhattan and Hoboken, N.J. Nine people died.

Andrew H. Anderson, executive vice president of Anderson Insurance Agency in Manahawkin, N.J., said personal, fixed wing aviation insurance is akin to other personal lines insurance where rates are based upon the individual's loss history and not where a pilot flies.

"There will not be a broad effect on underwriting," said Mr. Anderson, noting that this year "there were a lot of fatalities for general aviation."

"It's an unfortunate claim and tragedy that will just have to be settled," observed Fred Coste, president of the Coste Agency Inc. in Holbrook, N.Y.

He said that rates have been very stable and outside of pilots who have an increased frequency of claims, recreational pilots should not have a problem obtaining insurance.

Where there may be an impact is in helicopter coverage as the number of accidents have increased in the past 10 years, said Mr. Anderson. He said one reason for the increase in frequency may be because helicopters are in more use than ever before.

From an underwriting standpoint, he noted, carriers may become stricter, paying greater attention to a pilot's background and what the helicopter is used for.

Some of the major underwriters of this coverage are U.S. Aviation Underwriters (more commonly known as USAIG), a consortium of insurers including American International Group, Phoenix Insurance, Arch, U.S. Specialty, W. Brown and XL Specialty, said Mr. Coste, adding there are a number of other carriers available, all in the standard market.

In addition to handling aviation insurance, both producers are pilots (Mr. Anderson with 18 years flying experience and Mr. Coste flying since 1969) and have flown the Hudson River corridor before.

Mr. Anderson suggested that one reaction to the accident by insurers may be that underwriters will ask more questions about where they fly. He said this will be especially true if federal regulators do not make changes to make flying the river corridor safer.

The corridor runs at an altitude below 1,100 feet, extending from the Verrazano Bridge to the Tappan Zee Bridge. It also requires pilots to be in constant contact with one another by radio and stay in sight of one another since there is no radar control at that altitude.

For insurers, the most important underwriting factors are training and flight experience, noted Mr. Coste. Pilots who take classes in addition to recurrent training classes required by the Federal Aviation Administration are considered better risks because they show a higher concern for safety, he said. Also, the more hours a pilot flies, the more experienced pilot he or she is, and that is also considered a positive risk factor.

Special Reports /

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