An aircraft owner says its insurer approved $850,000 for replacement engines, then cut more than $436,000 from the payout - calling it "betterment."
White Aviation LLC sued U.S. Specialty Insurance Company on July 17, 2026, in the US District Court for the Middle District of Alabama, alleging breach of contract and bad faith over what it says was an underpaid aviation claim.
The plaintiff insured a 1981 Beech 200 aircraft under a policy that, according to the complaint, would pay up to $1,750,000 for damage. On June 13, 2023, a front gear failure caused "substantial damage" during landing. White Aviation says it reported the loss immediately and worked with the insurer's adjuster on the repair plan.
Both sides agreed the propellers and engines had to be replaced, the complaint states. On November 1, 2023, the insurer's adjuster approved buying two replacement engines for $850,000, according to the filing, and the insurer paid White Aviation $200,000 as the deposit needed to buy them. White Aviation then hired a repair shop to do the work.
The dispute is over what came next. On September 9, 2025, the complaint says, the insurer mailed a check for $267,987.87 as the balance - without "any detailed analysis or calculations" behind it. According to the filing, the insurer told White Aviation the used engines "somehow added value" to the plane and treated that as a "betterment," deducting $436,431.57 even after agreeing $850,000 was the actual cost.
White Aviation points to the policy's repair clause, which the complaint quotes: "If your aircraft is damaged and not destroyed, we will pay the reasonable cost of repair after the aircraft is repaired, but we will not pay more than the agreed value less the applicable deductible." The filing says nothing in the contract allows a "betterment" deduction.
The complaint also says the shortfall left the aircraft grounded: the repair shop placed a lien on it, kept its logbooks, and sued in Texas to collect. White Aviation is pursuing breach of contract, bad faith and "abnormal bad faith," and seeks compensatory and punitive damages.
The allegations have not been tested in court, and no judge has ruled. White Aviation has demanded a jury trial.
