Amtrak yesterday secured a partial appellate court victory as part of its efforts to recover the insurance coverage it was denied following the events of Superstorm Sandy in 2012.
The railroad service sustained over $1 billion in insured losses at the time of the severe weather event.
The 2nd U.S. Circuit Court of Appeals determined that a lower court judge in 2015 wrongly ruled that Amtrak could not claim up to $125 million in coverage to substitute undamaged portions of tunnels under the East and Hudson Rivers. The Circuit Court said that the previous ruling was impulsive, noting that Amtrak had then yet to submit its repair plans to the Federal Railroad Administration and had not anticipate any changes to the undamaged parts of the tunnels.
Despite the ruling, the court declined to overturn separate decisions by U.S. District Judge Jed Rakoff that capped Amtrak's coverage at $125 million, among other things. Moreover, the court upheld Rakoff’s ruling that the corrosion on Amtrak’s equipment after it had pumped out seawater from the tunnels was not an "ensuing loss" that would be exempt from the $125 million flood sublimit.
Amtrak said that its insurers previously agreed to a payout of $675 million per covered occurrence, but so far have only paid $30 million.
In 2014, Amtrak filed a suit against several insurers, including PartnerRe Ltd's Partner Reinsurance Europe Plc,
Aspen Specialty Insurance and
Swiss Re's Westport Insurance Corp. The rail service has since fought for the insurance coverage it believes it is due.
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