Amtrak settles fatal 2015 crash in Philadelphia for $265 million

[crabby_appleton1950]

Amtrak will pay $265 million for the May 2015 derailment that killed eight passengers just outside of Philadelphia.

A judge ordered the train company to pay up Thursday as part of a settlement program, WTXF reported.

Read more at:

http://www.nydailynews.com/news/national/amtrak-settles-fatal-2015-crash-philadelphia-265m-article-1.2847317

 

[Bob Dylan]

Well, the good news is that hopefully no more ambulance chasing lawyers will be filing "let's just settle this today" Lawsuits against Amtrak.

The Bad News is where does the Money come from to pay this since Congress is refusing to do anything now a days!???

And much do the Lawyers rake in out of the $265 Mill if and when it is ever appropriated??

 

[Metra Electric Rider]

The Bad News is where does the Money come from to pay this since Congress is refusing to do anything now a days!???

Insurance one hopes, but does Amtrak have "the right kind" of Insurance for that?

 

[jis]

AFAIR Amtrak does have an umbrella insurance with one of the big reinsurance firms, I forget which. I have no idea what the terms are.

 

[Metra Electric Rider]

AFAIR Amtrak does have an umbrella insurance with one of the big reinsurance firms, I forget which. I have no idea what the terms are.

Well, you've put at least my mind at ease...

 

[Devil's Advocate]

Unless I'm missing something it's still a bad situation for Amtrak by virtue of being an out of order adjustment. They had a legally enforceable liability limit and it's unlikely (and would be financially questionable) for them to have insured above and beyond that legally protected limit. Unfortunately for them if congress goes back and retroactively raises their liability limit on a prior accident the difference between the former limit and the new limit will almost certainly need to come from Amtrak's funds.

 

[afigg]

AFAIR Amtrak does have an umbrella insurance with one of the big reinsurance firms, I forget which. I have no idea what the terms are.

The insurance cap was $200 million when the accident occurred. Congress retroactively raised the limit to $295 million after the accident. If Amtrak's insurance payout limit was $200 million, they may be paying the $65 million difference out of pocket or stripping funds from elsewhere.

 

[neroden]

Yeah, I suspect Amtrak took a $65 million hit in cash here. That's unfortunate. Luckily Amtrak actually has access to commercial loans now (a huge change which happened one or two years ago) so this shouldn't cause an immediate cash crunch.

 

[trainviews]

The Septemer MPR is out and $ 65 million is just about what Amtrak came in over budget for the year. So the money should be there. Additionally capital spending is less than budgeted, but I don't know if Amtrak is allowed to use those money for the settlement.

 

[Devil's Advocate]

In all honesty the additional money should have come from a retroactive budget increase to account for the unfairness of the retroactive liability increase.

 

[Cho Cho Charlie]

AFAIR Amtrak does have an umbrella insurance with one of the big reinsurance firms, I forget which. I have no idea what the terms are.

The insurance cap was $200 million when the accident occurred. Congress retroactively raised the limit to $295 million after the accident. If Amtrak's insurance payout limit was $200 million, they may be paying the $65 million difference out of pocket or stripping funds from elsewhere.

Why can't Amtrak simply tell their insurance carrier, that their policy limit is also retroactively increased to $295M. Seems just as fair to me.