AMR Corp., the parent of American Airlines, said on Tuesday that insurers are canceling its coverage for claims caused by acts of war, terrorism, sabotage, hijacking and other similar events effective Sept. 26.
According to a Reuters report, AMR, the parent of TWA and American Airlines and the world’s largest carrier, said in a regulatory filing that its insurers have offered replacement coverage. The airline plans to obtain the replacement coverage before existing coverage is terminated.
The report notes that American will be charged significantly larger premiums for this replacement coverage, and this new coverage will be in a substantially reduced amount for claims not involving aircraft passengers.
The U.S. Department of Transportation has been given authority under the $15-billion federal airline bailout signed over the weekend to reimburse carriers for 180 days for the increase in insurance costs.
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