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Thread: Rotax 912 - the dirty secret

  1. #1
    not real name 500 Club
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    Rotax 912 - the dirty secret

    I recently had the sobering and rather upsetting experience of having the engine (and complete instrument set) stolen from my aircraft. It was touch and go whether the aircraft would be written off but the insurance company decided (after some helpfull cost savings from Flylight and CT Aviation) that they would pay for the aircraft to be brought back to life with everything replaced.

    All good news then.

    Well, no, not exactly. The sting in the tail is the principle of betterment that the insurance companies have the right to apply. This has the effect that a 2000 hour 912 engine has zero value. None. We tend to consider that the 912 is a class act and can go on for ever, and this has some truth in it, but not to the insurance company.

    What this means is that if you have, lets say, a 1000 hour 912 engine that is lost, stolen or written off for any reason, the insurance company has the right to (and in general will) apply betterment and will only pay half of the cost of a replacement 912 engine. You will have insured the aircraft for the value you believe it is worth if selling but if the engine has done an appreciable fraction of that 2000 hour life then you would not get the amount you had insured it for, and in fact if the aircraft had a new engine put in, you would have to stump up the betterment, in our example half of the cost of the new 912 engine.

    Bear in mind that the insurance company will not deal with second hand engines. They do not want to get involved in any claims arising from supplying an engine of unknown provenance
    .
    Makes you think doesn't it.

    What it says to me is that if you are looking to buy a 912 engined aircraft then unless you are confident that you will never need to make an insurance claim involving the engine then very careful consideration should be taken of the engine hours and the price being asked should reflect the true value of the engine, based on zero value at 2000 hours.

  2. #2
    Senior Member
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    Rotax 912 - the dirty secret

    Well, that's bad news Laurie! Sorry to hear of your plight, that certainly seems unfair! Who are the insurers?

  3. #3
    not real name 500 Club
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    Rotax 912 - the dirty secret

    A fair and proper question Andy. I never had this issue with OnRisk.

    Andy Fell wrote: Well, that's bad news Laurie! Sorry to hear of your plight, that certainly seems unfair! Who are the insurers?

  4. #4
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    Rotax 912 - the dirty secret

    So wouldn't it have been better to make sure that it was a write off so that the full insured value was paid out?

  5. #5

    Rotax 912 - the dirty secret

    I paid a little extra with Visicover so that betterment didn't apply, in other words new for old.

  6. #6
    Senior Member 100 Club
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    Rotax 912 - the dirty secret

    A friends Cessna got blown over 2 weeks back. The insurance company wrote the aircraft off just on the pictures..and have paid out the full hull value. they insured it for.
    Even though the engine was well over TBO.

  7. #7
    Diamond geezer 500 Club
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    Rotax 912 - the dirty secret

    Gwyn Carwardine wrote: I paid a little extra with Visicover so that betterment didn't apply, in other words new for old.
    The Visicover online quote asks if you want to insure against betterment, it explains the risk and allows you see the effect inclusion has on your premium.

    https://app.visicover.com/PagesCP/Vi.../AvFwIn01.aspx

    Good of you to post your experience Laurie. Hopefully, it will save others from a nasty surprise, should they suffer a similar misfortune to yours.

  8. #8

    Rotax 912 - the dirty secret

    Even a 2000 hour 912 has some value - as defined by what you would have to pay to buy one second-hand on the open market, even if that is not what is being used as a replacement in this case.

    Otherwise the insurance company is setting some arbitrary life on the engine.

    Worth arguing for some value at least?

  9. #9

    Rotax 912 - the dirty secret

    I guess it depends how you look at it - having an new engine increases the value of the aircraft substantially - and I guess the insurer thinks thats not part of the deal.

    It not really a Rotax thing - would be proportionately worse with an engine with lower TBO number.. But then again those are not so attractive to the robbers.

    Betterment crops up from time to time and not just on engines - I have known them do it on sails too - the insurance company has offered patch repair, but wanted betterment adjustment to replace with new. Sometimes the Insurance company strong arms the repairer to buy the repairable sail and reduce repair invoice accordingly - I have two Skyranger wing skins I rashly agreed to do that with that I still have 4 years later!

    I guess the moral of the tale is that the lowest quote for hull may not be the best value.. And to clarify this when buying the policy / renewal.

    Often the insurance company will agree a price for the repair and its possible to negotiate to be paid that amount and organise the repair yourself - which then gives the opportunity to source a used engine.

    Paul

  10. #10
    Senior Member 100 Club
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    Rotax 912 - the dirty secret

    so, is betterment good or bad

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