Amtrak insurance appeal leads to partial victory

Amtrak insurance appeal train railway

The railroad service has now secured a part win in U.S. appellate court in a case dating back to Superstorm Sandy.

The latest Amtrak insurance appeal has left the railroad with a partial victory. This is the result of the newest step from the company to obtain insurance coverage payments following Superstorm Sandy. The massive 2012 hurricane caused over $1 billion in damages to the railroad service.

Since that time, Amtrak has been trying to recoup some of those losses through its insurance policies.

The latest ruling was in the Second U.S. Circuit Court of Appeals. The Court ruled that a decision from a lower court judge in 2015 was erroneous. The ruling before this Amtrak insurance appeal stated that the railroad was not permitted to claim up to $125 million in coverage for the replacement of undamaged tunnel portions under New York City’s Hudson and East Rivers.

The latest Amtrak insurance appeal decision was made by a panel of three judges.

Amtrak insurance appeal train railwayThat judge panel stated that last year’s ruling was premature. The reason for the decision is that in 2015, Amtrak had not yet submitted its repair plans to the Federal Railroad Administration. Moreover, the railroad service had not yet determined which portions of the tunnels were damaged and which were not. Therefore, they could not say specifically where the repairs would be needed.

At the same time, this insurance court case appeal was not a complete victory for Amtrak. The judge panel did not overturn a separate decision laid down by U.S. District Judge Jed Rakoff in Manhattan. That decision placed a cap of $125 million on Amtrak’s coverage for tunnel damage caused by being inundated with water.

Another ruling by Judge Rakoff that was upheld in this Amtrak insurance appeal case was one regarding corroded equipment. After pumping the Superstorm Sandy seawater out of the tunnels, Amtrak equipment experienced significant corrosion. The decision said the “ensuing loss” from the corrosion was not a part of the sub-limit of the $125 million coverage cap. At the time of the writing of this article, Amtrak’s lawyers had not yet released an official comment and had not immediately responded to comment requests.

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