Amtrak Seeks to Recoup Millions From Insurers for Sandy Losses

By | September 25, 2014

Amtrak filed a lawsuit last week against more than a dozen insurers, claiming that the railroad operator is entitled to recoup additional proceeds for Superstorm Sandy losses from its insurers.

“Amtrak has filed a lawsuit against its insurance companies for failure to stand by the terms of our policies for the significant property damage that followed Superstorm Sandy,” Amtrak’s spokesman Steve Kulm said in a statement.

The unprecedented weather event had substantial impact upon critical Amtrak infrastructure in and around New York City, including inundating with corrosive saltwater both the Hudson River tunnel and the East River tunnel, he said.

“Amtrak’s losses included the extra expense suffered because of the shutdown of service and the extraordinary efforts that were undertaken to restore operations that are vital to the economic livelihood of the entire Northeast region,” Amtrak’s spokesman said. “The lawsuit is a first step toward resolving the deadlock with the insurance companies and providing a long-term permanent fix to the infrastructure damage for the benefit of the traveling public.”

The complaint, filed in the U.S. District Court for the Southern District of New York on Sept. 17, lists as defendants 17 insurers including: Ace Bermuda Insurance, Ltd., Arch Specialty Insurance Co., Aspen Specialty Insurance Co., Federal Insurance Co., Lexington Insurance Co., Liberty Mutual Fire Insurance Co. and certain underwriters at Lloyd’s of London.

The lawsuit says Amtrak has told its insurers in a timely manner after the storm that it has sustained losses and submitted claims. The railroad operator had more than two dozen first-party all risk property policies in total from its insurers, the lawsuit says.

According to the complaint, insurers say most of the damages sustained were caused by a flood and that the insurers’ overall maximum liability is $125 million. But Amtrak says damages were caused by the storm surge and that losses were caused by multiple events. The lawsuit says Amtrak suffered some $504 million in losses from Sandy.

The case is National Railroad Passenger Corporation v. Ace Bermuda Insurance, Ltd. et al, 1:2014cv07510, U.S. District Court for the Southern District of New York, Sept. 17, 2014.

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