The Cost Of An Annual

[Hansmeister]

John,

There are a variety of reasons for what I do to the plane. I get a great deal of satisfaction when I have done my very best to make a really nice airplane.

Someday, when my time comes to sell, I will be asking top dollar. I want the buyer's representative/mechanic/IA to look at the plane and say "Wow" (in a positive sense).

My good friend and hanger neighbor is an Oshkosh judge. When he looked over the plane prior to departure in 2006 at which I came back with "Outstanding Comanche", he handed to me 5 pages of gigs. Whereupon, I said "Wow", look at all the work I must do.

If you think my plane is nice, you should see his one-of-a-kind homebuilt. He won runner up in 1991 (should have been first place - Gold Lindy).

[15384]

Hans: I went to the Air Venture site and saw that you were the 2006 winner of Outstanding Piper 24/30 Comanche. But was disappointed that there weren't any pictures of any of the winners for that year. Are there pictures of your plane somewhere that can be viewed that were taken at the event? Are your wheel wells as fancy as McKurke's?

John

[Kristin Winter]

John,

The cause was disputed, but I believe that the pilot took off on an empty tank.

[15384]

Kristin: What a great country we live in (for attorneys that is). IA gets sued because of Pilot error.

You know people always point fingers at stupid pilot errors such as running out of fuel, VMC into IFR flight, landing gear up, etc. and scream about how now insurance rates will rise for the rest of us. But what they don't understand is that allowing someone to sue the IA for pilot error and the resulting pay offs between insurance companies and attorneys who work on a contingency bases is a much worse problem for people who would buy insurance.

John

[Kristin Winter]

The problems with the civil justice system in this country are a bit more nuanced. It is hard to have due process, and then prevent law suits that disagree with the NTSB report. The NTSB doesn't always get it right. Needless to say, the plaintiffs had a theory about the fuel selector and the warning system, installed per AD, thata was supposed to warn the pilot when the selector/wobble pump arrangement was not engaged properly.

The big picture is that our law makers do not want to spend money on courts, judges, and juries. It is not sexy for a politician running for office to say he/she got the county more judges. The public doesn't demand. We have a shortage of judges and court rooms. The judges are underpaid, so the quality is some places is not what we would like. The result is that the system does not have time for civil trials, and the judges will do their best to get the defendants to pony up money to make the case go away. The plaintiff's attorneys bank on this, in more ways than one. The reality is that an attorney can file anything, no matter how full of BS it is, and be nearly guaranteed that the system will help him/her extort money out of insurance companies. The insurance companies, for their part, have become too quick to settle, as they are answering to shareholders for this quarter's performance, not for the long run. The result is that the system feeds the rats. Hence, we are up to our eyeballs in rats.

Kristin
Pest Control Specialist

[Scott Ducey]

Well put Kristin. From the insurance company perspective I would say that when a suit comes along, it is often more cost effective to settle (to make the case go away) instead of fighting it out...even if the there are no merits to what the person is saying on the other side of the table. In short, legal representation is expensive and that is why insurers do what they do. There are other systems such as the one in England, i.e. if you bring suit against someone and you lose, then you pay legal fee's for both sides. Unfortunately, there are down sides to that too. It is not perfect, but it is what it is. I work in the insurance industry BTW.

Scott

[Kristin Winter]

Scott,

Defense is expensive. At the end of the day, the best way to avoid the high cost of defense is to avoid being sued. Insurance companies contribute to the problem by taking the short view. It is usually cheaper in the short run to feed the rats. But that does create more rats which then require a defense, at least for long enough to prepare another meal for the rats.

The insurance companies cannot really be singled out. The fact is that corporate America only looks at the next quarter, if they are taking that long a view. The system is biased that way. If the pointy-headed economists that seem to hold sway would work to encourage longer term planning, our economic would be less volatile than it obviously is.

I suspect that accounting rules have something to do with it. Once suit is filed, a reserve must be set. That ties up money from the inception. Settling for less than the reserve frees up money. That helps bias the system toward paying on a claim, even if it has no real merit.