Flying Food for Thought for the Insurance Industry
How often do we see a flying car? If “never” is your answer you are correct – but only for the next year or so. Terrafugia, founded by MIT-trained aeronautical engineers and MBAs, has developed a revolutionary new dual-purpose vehicle- The Transition® Roadable Aircraft.
“When I first heard of this, I envisioned a really cool, cutting-edge vehicle that could literally lift me out of a traffic jam and allow me to fly over the hapless motorists below”, reports Ara C. Trembly in a recent Insurance Networking News (INN) article.
Unfortunately this high-flying dream is not yet a reality. Although the Transition® is street-legal and fits in a standard household garage, it must be flown by a licensed pilot and take off from a public use general aviation airport with 2,500 feet of roadway (a common requirement of private aircraft operation). It’s marketed to pilots as a way to “streamline [the] flying experience with the revolutionary integration of personal land and air travel”.
Dashed hopes of aviating out of traffic jams aside, spare a thought to the implications this vehicle may have on the insurance industry. Although breaking, ‘The Transition’ could put insurers in a tricky position. Ara C. Trembly says in the same article in INN:
So what’s an auto insurer to do when owners start besieging the gecko for rates on this vehicle? Does this mean one has to buy both aviation and auto insurance? Should one insurance be cheaper, since the vehicle doesn’t spend all of its time on the road, or in the air? And which company do you call if the vehicle is damaged, say, on landing? Was it a car when it got crunched, or was it a plane?
Fortunately, insurance companies have a couple of years to figure this out.