Adjusting Your Claims Attitude
The truth is most of us have a cavalier attitude when it comes to our lives and the risks we face. Most of us have the perception "It can't or won't happen to me". It's is also a natural feeling most have that we are in control. We think we can control our circumstances, and through such control, we are somehow less vulnerable to bad things happening. While this is true to some extent, for example choosing to not walk out in front of a bus, it is also just as true that we have little to no control over other elements in life that can, in fact, have a less than the desired outcome. In psychology, this is known as "Normality Bias".
The normalcy bias, or normality bias, is a belief people hold when considering the possibility of a disaster. It causes people to underestimate both the likelihood of a disaster and its possible effects, because people believe that things will always function the way things normally have functioned. - https://en.wikipedia.org/wiki/Normalcy_bias
It is not unusual to deal with a client that has these misguided feelings of full control. When it comes to increasing liability coverage, we receive comments like "I have never had a claim" or "if things are that bad I will not survive anyway, and liability limits will not matter".
So while it is obvious these individuals are falling for the normality bias, as insurance agents looking out for your best interest, it is our job to educate clients on just how this fallacy in thinking is to their disadvantage.
So let's take a look at things from a slightly different perspective. Sure you are a great pilot, you follow all the rules, you make sure you are up and following all the latest standards. That is great. Now let's look at why you have aircraft insurance in the first place. The purpose of insurance is to displace risk. So the same idea behind why you have insurance in the first place should also motivate you to help determine if you really have adequate insurance.
For example, have you considered inflation? Have you considered the rising level and cost of litigation? Both out of your control. How about something more concrete? Have you considered how you have little to no control over why accidents happen in the first place? Thus by definition an "accident". Do you have control over a bird strike, bad weather, or mechanical failure? If you are honest, you know the answer to be "NO".
(a) And thus the need to take ourselves out of the equation in determining if we are adequately covered under our insurance policy if a claim should arise.
Insurance is often a product where we should consider the adage "prepare for the worst and hope for the best". It is the first part "prepare for the worst" or lack or preparation, shall I say, that get so many in trouble. No one goes looking for an accident. Accidents find us when we least expect it and are oftentimes least prepared.
So if you are planning on your mortality in the event of an accident to relieve you of responsibilities associated with it, it is important to understand that most accidents do not end in fatality. That means you may be stuck on the line at the worst possible time.
Additionally, many of us use our aircraft for more than personal reasons. Many of our aircraft are tied to business. So, for argument's sake, let's suppose you do pass away in an unfortunate situation. Have you considered the liability to the business? Have you considered the livelihood of all the individuals attached, such as employees, family members, and stakeholders that are going to be left behind to pick up the pieces? .
So the next time an increase in liability coverage is suggested try to approach the situation from a more selfless perspective. What is the potential true cost of underinsurance?