How might recent plane crashes in Roy affect insurance rates?

Ask around in Roy and the perception of risk is real. Both the Roy City mayor and police chief have spoken out about concerns for public safety after the fifth headline-catching plane crash in about four years.

“We feel like it’s definitely time for Roy City to get involved and find out what the problem is,” said Police Chief Carl Merino.

The FAA and NTSB lead investigations into all plane crashes, but there are certainly many interested parties. Insurance rates can rise and fall on conclusions drawn in federal reports.

Matt Child, CEO of Utah Independent Agents, which represents the insurance industry says:

As risk goes up, so does your insurance rate in most cases. We don’t live in a bubble that is exclusive from emotion and environment, right? But at the same time, it is driven by statistics.

Child said homes and businesses in the flight path for the airport are very unlikely to see rate changes. State regulators and competition should keep rates where they are.

But might rates rise for airport or aircraft insurance?

“Maybe,” he said. “Depends on the cause.”

If federal investigators identify a common thread in recent crashes involving the airport, Child said there would be rate hikes and a ripple effect.

“The airport could have to raise its fees, raise its cost, it could have an impact on commerce in the city because I don’t know how much business and tax income the city gets from those operators,” he said.

But reports could conclude the opposite.

“Hopefully, they’re not all related,” Child said. “They’re just one-off and, sadly, just happened to be fairly close to one another.”

If a specific pilot or plane or part is the problem, rate hikes would be limited to policies for that person or machine.

“We’re not going to spread that loss, [the] impact of that loss, the cost of that loss across everybody in the marketplace because it was your fault,” Child said.

Bryant Garrett, the manager of the Ogden-Hinckley Airport, said Friday the airport does carry a $100 million insurance policy and he’s confident recent crashes near the airport won’t change their rate.