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Robinson R44 Purchase Addendum


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Is anyone familiar with the R44 "purchase addendum?" :huh: I stumbled across it in the forms section of the Robinson Helicopter website. I'm wondering if this applies to every type of operation (private vs. commercial), what significance it has, etc. Is it just another CYA maneuver by Frank that only matters when you ball up the helicopter in a pile of aluminum, or would it actually prevent a lower time pilot from flying an R44... For instance: It requires a CFI to have 500 total helicopter, 50 make and model, and RHC safety course.

 

Here is the link for those of you who haven't seen this before:

http://www.robinsonheli.com/forms/addendum.pdf

 

Is there any document like this for the R22?

 

Does anyone know where a person can get some inexpensive (but safe, and honest) R44 time in or near FL?... Even an Astro...

 

Thanks in advance,

 

GS

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The 500 total time, 50 make and model is also a Pathfinder insurance requirement, and since they are the lowest cost insurance for the R-44, most people use it.

 

The purchase agreement says that you will follow those rules, regardless of what (if any) insurance you have, and that you must get anyone who buys your helicopter to sign that agreement, or you remain liable to RHC for anything that happens.

 

I don't know if it has been tested in court, but I wouldn't want to be the first.

 

Honestly, dealing with RHC is a PITA, for a number of reasons, but you have to unless you want to fly only Schweitzer's and Jet Rangers...

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If you notice that the restrictions listed in Paragraph 2, Sub-Paragraphs A-D are more stringent than that in SFAR 73 and more closely mirror the requirements of Pathfinder for insurance. If you are flying for someone that has insurance other than Pathfinder, then you are probably looking at easier requirements. The problem is finding someone that flies Robbies and doesn't use Pathfinder.

 

Something else about Pathfinder that many may not be aware of is the fact that part of your policy could be used to protect RHC if named in a lawsuit brought about because of the operation of your helicopter that you have insured with Pathfinder.

 

As for the Indemnification and Resale paragraphs, I'd be interested to see how well they would hold up in a court of law. Requiring a customer to be responsible for the actions of a subsequent purchaser seems to be pushing the boundaries of what would be allowable. Can you imagine an automobile maker requiring you to get the person you sell your used car to to agree to follow the motor vehichle code and if you can't get them to agree in writing that you could be financially liable if they wreck and kill someone? I don't think that they would be selling too many new cars if that was the case.

 

Frank seems to be big on CYA and with all the lawyers with too much time on thier hands, I can't really blame him. But, from a consumers point of view, I think that he is way over the top on some things and this is one of them and could possibly sway me away if I was looking to purchase a new R44.

 

Just my two-cents.

 

Doug

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The wording of this agreement is what has me wondering if this applies to every single R44 operator including private individuals...

 

In Paragraph 1 it says:

"Inspecifically including the agreements and waivers by Buyer, as a commercial entity"

 

Does this imply that this agreement is only required for commercial operations conducted by a corporation, LLC, partership, S-corp, etc?

 

Also, Paragraph 1 starts out saying:

"ADDITIONAL CONDITIONS IN EXCHANGE FOR PRICE CONSIDERATION"

 

Does the buyer get a price break if they are willing to subject their machine to this rediculous agreement? Maybe if you're buying a fleet of these things for a high-time crew you can afford to make this sacrifice. But then are there machines out there that will have this document follow them around through their lives? I can see the classified ads now... "R44 for sale: low hours, leather seats, all the bells and whistles... " and in very fine print: "must agree to purchase addendum"

 

No one answered the burning question though... Is the R22 subject to any sort of higher pilot requirements than SFAR 73 specifies (other than ferry and photo flights)? I own an R22, and intend on instructing in it in the very near future, so I need to know.

 

I do not have hull insurance, only liability, and I've already jumped through all the hoops to meet those requirements... My age was a huuuuuuge problem. Nevermind the fact that I have an ATP, a bunch of instructor ratings, squeeky clean record. And, I don't use Pathfinder.

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The wording of this agreement is what has me wondering if this applies to every single R44 operator including private individuals...

 

Anyone who buys a R-44 has to sign that agreement...

 

But it hardly matters, since almost every Robinson operator uses Pathfinder insurance, which is basically the same requirements anyway.

 

Also, Paragraph 1 starts out saying:

"ADDITIONAL CONDITIONS IN EXCHANGE FOR PRICE CONSIDERATION"

 

Does the buyer get a price break if they are willing to subject their machine to this rediculous agreement?

 

No, what it is saying is that the price has already been discounted for this agreement. It is legal wording, nothing more.

 

No one answered the burning question though... Is the R22 subject to any sort of higher pilot requirements than SFAR 73 specifies (other than ferry and photo flights)? I own an R22, and intend on instructing in it in the very near future, so I need to know.

 

The only other requirement you'll have is Pathfinder, which requires 300 hours total helicopter time to teach in the R-22. If you are not using Pathfinder, then you won't have that issue.

 

I'm curious who you are using for insurance, since you say it isn't Pathfinder, and what you're paying... Pathfinder is by far the least expensive insurance out there, even if it isn't the best quality coverage you can get.

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I'm curious who you are using for insurance, since you say it isn't Pathfinder, and what you're paying... Pathfinder is by far the least expensive insurance out there, even if it isn't the best quality coverage you can get.

 

Sutton James in CT is the broker, I can't remember the underwriter off the top of my head. Liability only is 2,800 for liesure and pleasure (about 800 more for commercial operations)... Liability plus hull would have been in excess of 23 grand (2001 R22, 500 hours on ship, 155K). I had to go with Sutton James because I baught the helicopter before I had my Private helicopter finished, and they were the only company I could get on the phone to bargain with me.

 

Only one restriction applied.... I had to receive 25 hours of dual in an R22 before I could solo. No other restrictions whatsoever.

 

Thanks for clearing that up for me

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Sutton James in CT is the broker, I can't remember the underwriter off the top of my head. Liability only is 2,800 for liesure and pleasure (about 800 more for commercial operations)... Liability plus hull would have been in excess of 23 grand (2001 R22, 500 hours on ship, 155K).

 

Sounds about right for non-Pathfinder coverage for a new pilot... They were really quoting you flight instructing rates, that is what schools pay for their coverage...

 

BTW, Pathfinder would have been less than 10K for liability and hull coverage, but as I said, the quality of the insurance isn't as good.

 

I had to go with Sutton James because I baught the helicopter before I had my Private helicopter finished, and they were the only company I could get on the phone to bargain with me.

 

I'm sorry you had no one to help you during that process. That is one area where a good dealer or flight school who is interested in helping you can really make the process easier. Walking you through things like insurance is just one area that an experienced person can help with.

 

Aircraft ownership isn't for the faint of heart, that's for sure. :)

 

Only one restriction applied.... I had to receive 25 hours of dual in an R22 before I could solo. No other restrictions whatsoever.

 

Thanks for clearing that up for me

 

You're most welcome... BTW, your price for liability coverage is good for your level of experience, assuming that provides $1,000,000 total, $100,000 per pax coverage.

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You think that's bad?? You should have seen the ORIGINAL purchase agreement for the R44. Minimum 200 PIC in helicopters, 50 PIC in the R22 before you could "MANIPULATE the CONTROLS" of a R44. And per Pathfinder, primary flight instruction was prohibited. That was in place for over 8 years. I had a few students that had to buy R22s to build their time up before they could buy a 44. Is that screwed up or what??

 

Don't forget the Ferry Agreement you have to sign before you can pick the helicopter up.....that's another wild contract. But that was put in place for all the people that were getting killed on the way home because they'd never flown in high density altitudes and were trying to fly over the Rockies in the middle of August at max gross weight.

 

.....and Sutton James's policy is through AGI--or at least it used to be. I think someone actually underwrites them in the end. If I remember correctly there's only two ULTIMATE underwrites for helicopter insurance. Lloyds of London is one.....don't know the other.

 

Sutton James used to have a deal through the Robinson Owners Assoc. You would get inspected at take a checkride with one of their "examiners" every year, and for that you'd get a few grand off your insurance. Don't know if that program is still around or not--the examiners were kind of hard to find.

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You think that's bad?? You should have seen the ORIGINAL purchase agreement for the R44. Minimum 200 PIC in helicopters, 50 PIC in the R22 before you could "MANIPULATE the CONTROLS" of a R44. And per Pathfinder, primary flight instruction was prohibited. That was in place for over 8 years. I had a few students that had to buy R22s to build their time up before they could buy a 44. Is that screwed up or what??

 

Sheesh... I can see why that went away, Frank wasn't going to sell very many with those rules...

 

Don't forget the Ferry Agreement you have to sign before you can pick the helicopter up.....that's another wild contract. But that was put in place for all the people that were getting killed on the way home because they'd never flown in high density altitudes and were trying to fly over the Rockies in the middle of August at max gross weight.

 

While I think the ferry agreement needs to have some flexibility built into it, I understand the reason behind it. Too many people don't respect the limits of the aircraft.

 

.....and Sutton James's policy is through AGI--or at least it used to be. I think someone actually underwrites them in the end. If I remember correctly there's only two ULTIMATE underwrites for helicopter insurance. Lloyds of London is one.....don't know the other.

 

I've been told you cannot buy helicopter insurance directly from Lloyds of London, but perhaps they re-insure the risk?

 

Our insurance is underwritten by W. Brown for the S300CBs, but I don't think they are the real underwriters either...

 

Sutton James used to have a deal through the Robinson Owners Assoc. You would get inspected at take a checkride with one of their "examiners" every year, and for that you'd get a few grand off your insurance. Don't know if that program is still around or not--the examiners were kind of hard to find.

 

Interesting... I'll have to shop around for insurance for our R-22 when we get it. I was going to simply use Pathfinder, but if I could get even somewhat decent rates using someone else, it might be worth it... :)

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That R44 purchase agreement was in effect until 2002. Yeah, I can't believe it last that long either. But they just put those clauses in there about not being able to fill it up with pax until you hit a certian number of hours. That was the whole logic behind that agreement....the two extra liabilities in the back seats. About that same time was when they required EVERYONE to go to factory school if you wanted to carry a passenger. It used to be that you just had to go if you were a CFI (and the school was for geared for CFIs or CFIs to-be only.)

 

That ferry agreement is very strict and they won't budge. There have been lots of people sent back home because they don't meet the requirements. And when they threaten to back out of the sale, RHC says "Fine.....we don't care. We'll keep your 10% and have this helicopter sold to someone else in a day." I had dinner with Tim Tucker and a bunch of FAA guys here in St. Louis a few years ago and he told me that he had to sign all that paperwork and present his logbook so he could ferry a helicopter somewhere locally in LA to a customer that didn't meet the req's. Now that's strict when you make your original test pilot and own employee do that for a local flight huh?

 

Even with that Sutton James discounted policy, Pathfinder is going to be cheaper by thousands. A buddy I sold an R22 from was going to insure with Sutton James to avoid going to factory school. I was a 1800 hr Beta worth about $65,000. From SJ, it was going to be ~$6,000 for liability, then $10,000 for liability+hull. He was going to self-insure the hull. I got him to send in a request to Pathfinder = $4,500 for hull+liability. He could take all the money he saved and go to RHC school many, many times. Keep in mind that you can only self insure if YOU own the helicopter....any lender will require full coverage.

 

Read Pathfinder's policy several times over--there's some screwy stuff in there. Keep in mind that the $1,000,000 liability does not cover the pilot in any way--just the pax & people/property to the ground. If you wreck it, Pathfinder requires you to transport the wreckage to RHC within X amount of days. Then, they decide how much money it would cost to fix it, and you either get that amount or your fixed helicopter back in six months. If you decide to take the cash, you do NOT get credit for any serviceable parts on the helicopter, nor do you get them back. This is how RHC keeps their helicopter out of junkyards--if they have all the parts, the consumer needs to buy them new from RHC. It limits their product liability by leaps and bounds and lets them control the pricing.

 

There's some other screwy langauge in there about YOU personally paying to defend RHC if a victim from your accident sues everyone and their brother like they normally do. It doesn't help with them being offshore and not being able to "talk" with them over the phone--EVERYTHING is done by fax and email (no phone calls accepted.) They are real though--I know a guy that was in Freeport, looked them up, and went to their office to meet RC--said he was a really nice guy!

 

Depending on what you're doing with your helicopter, Pathfinder may or may not be the answer. If you're a weekend flyer, in a money crunch, just need insurance to make the bank happy, Pathfinder is the way. But if your going to doing a LOT of wicked flying in this helicopter and can charge an extra $10-20/hr, I'd buy the real insurance to CYA. You can always drop back to Pathfinder if things slow down.

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That R44 purchase agreement was in effect until 2002. Yeah, I can't believe it last that long either. But they just put those clauses in there about not being able to fill it up with pax until you hit a certian number of hours. That was the whole logic behind that agreement....the two extra liabilities in the back seats. About that same time was when they required EVERYONE to go to factory school if you wanted to carry a passenger. It used to be that you just had to go if you were a CFI (and the school was for geared for CFIs or CFIs to-be only.)

 

I shudder to think of the restrictions on the R-66, if it ever comes out... :blink:

 

[qoute]Read Pathfinder's policy several times over--there's some screwy stuff in there.

 

I have, it isn't real insurance, it is just something to provide a small amount of protection, and to make the bank happy. Then again, if I was a bank, I don't know that I'd accept it as insurance...

 

Keep in mind that the $1,000,000 liability does not cover the pilot in any way--just the pax & people/property to the ground.

 

Actually, you only get $500,000, since the other half goes to defend RHC. Plus defense costs are subtracted from that number.

 

If you wreck it, Pathfinder requires you to transport the wreckage to RHC within X amount of days. Then, they decide how much money it would cost to fix it, and you either get that amount or your fixed helicopter back in six months.

 

If they fix your helicopter, they will bill you for zero-timing it. If you had a mid time ship, you might end up with a $50,000+ bill.

 

There's some other screwy langauge in there about YOU personally paying to defend RHC if a victim from your accident sues everyone and their brother like they normally do.

 

You've got to wonder how much of that would hold up in court, but you never know...

 

Depending on what you're doing with your helicopter, Pathfinder may or may not be the answer. If you're a weekend flyer, in a money crunch, just need insurance to make the bank happy, Pathfinder is the way. But if your going to doing a LOT of wicked flying in this helicopter and can charge an extra $10-20/hr, I'd buy the real insurance to CYA. You can always drop back to Pathfinder if things slow down.

 

If you're running a flight school, you probably need the real insurance offered by real insurance companies. That being said, you're also operating on slim margins, and thus need to save a buck whenever possible.

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We always kept one R22 on Pathfinder and the other on the good insurance. That way students could rent that helicopter after they got their private to take pax. That one was always booked up most of the time, so it encouraged students to go to RHC school. They felt a little privi'd that they could fly the "other" one just about anytime. Funny stuff.

 

With that liability deal--half going to RHC--that's what I meant when I said you're paying to defend them. Of course, that's why RHC has never had to carry product liability insurance. And, BTW, they've never lost a case. I've heard they've settled out of court a few times (like on first R44), but have never had a judgement against them.

 

On the money you get back.....I knew a guy that messed up a 44. It landed upright, but looked totalled. Well, that helicopter was probably worth about $180-200K on the fair market, he got a check for about 130K by the time they took the deductable and did the evaluation of the wreckage. Even though you have insurance, crashing is a VERY expensive f*up. Add in the lost revenue from no helicopter, your bad rep, your certificate being snatched by the FAA for months, the increased cost of insurance, etc and it's the last nail in your coffin for some pilots. And that's all BEFORE you get sued by your pax and their families.

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Aerospace insurance managers will also quote helicopters at reasonable (for a REAL insurance company) prices. Unfortunately for the small private owner it really is expensive to insure the hull on ANY helicopter, which is why so many people self-insure the hull and carry liability only. Pathfinder is cheap, but your hull depreciates, and they have several strange requirements (transporting the wreckage, etc). Agreed hull values protect your investment, depreciating hull values can end up leaving you short. Just my .02. Insurance rates for helicopters suck period, hopefully we'll have some companies step up and offer reasonable rates (there are a few new aviation insurance underwriters this year, Allianz being the largest so far).

Chris

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