NJ Transit sues insurers over Sandy damages
By Russ Zimmer, Asbury Park Press, N.J. | |
McClatchy-Tribune Information Services |
Talks between NJ Transit, the nation's third-largest bus, rail and light rail transportation provider, and the companies it relies on for insurance coverage in catastrophic situations reached an impasse over the classification of losses suffered during the
A civil lawsuit was filed last week in
NJ Transit's plans to move more people could be derailed
The cost of repairs not reimbursed through NJ Transit's private insurers would have to come from other revenue sources, meaning passengers and the state and federal governments. NJ Transit previously announced it would not be raising fares during the 2015 budget cycle, which began on
The defendants are identified as certain underwriters at Lloyd's of
More than 300 rail cars and locomotives were damaged during Sandy, according to NJ Transit, along with electrical systems, tracks, bridges, tunnels and various equipment. It took more than a month before rail service was mostly restored.
In
More on the recovery from superstorm Sandy
Some corporations seek property insurance protection beyond what a single carrier is prepared to offer, or what a customer is prepared to buy from a single carrier. In NJ Transit's case, they layered eight excess insurers, whose coverage is phased in when damages exceed
The legal dispute centers around a section of the policy pertaining to named windstorms. NJ Transit's attorneys argue that no limit is spelled out for named windstorms in the policy, meaning that damage from such a storm -- which would include superstorm Sandy -- should be eligible for the full
On
However, a day later, NJ Transit opened a second letter from a another provider of excess insurance with an entirely different tone even though its policy defintiions and coverage were identical to the seven defendants, according to the lawsuit.
NJ Transit's insurance broker informed the excess insurers that it did not agree with their finding during a face-to-face meeting in
In addition to an order directing the companies to treat the disaster as a "named windstorm," the lawsuit seeks interest and attorney fees. A jury trial is requested. Under
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