AIG balks at claims from jet ditching in Hudson

[Guest Revelator]

http://www.nytimes.com/2009/06/12/business/12aig.html?_r=1&hp

June 12, 2009

A.I.G. Balks at Claims From Jet Ditching in Hudson

By MARY WILLIAMS WALSH

For the first couple of days after his flight ditched into the Hudson River, Paul Jorgenson was just glad to be alive. But then he started to need his laptop, his wallet, his car keys — all the essentials he had stowed under his seat and left behind in the sinking plane.

A pleasant woman at US Airways told him not to worry; he would be made whole for his losses. But then the matter shifted to US Airways’ insurer, the American International Group, operating under government stewardship since its bailout last fall.

“Everything went downhill,†said Mr. Jorgenson, a software executive in Charlotte, N.C., whose laptop and keys have not been recovered.

When a homeowner has a burglary or a driver has a crash, all it normally takes is a call to the insurance company and a description of the loss to activate the policy. But aviation liability insurance is different. It is activated by a finding of negligence on the part of an airline. If there is no negligence, then arguably there is no liability, and no obligation to pay claims.

That poses a problem for the passengers of US Airways Flight 1549. They suffered real losses and injuries, but they are widely perceived as having been saved from sudden, violent death by their heroic and quick-thinking flight crew, led by Capt. Chesley B. Sullenberger.

“Insurance companies try to protect their assets, obviously,†said Bruce D. Chadbourne, a co-author of the book, “Introduction to Aviation Insurance and Risk Management,†and a professor in the business school at Embry Riddle Aeronautical University in Daytona Beach, Fla. With the airline wearing a halo, A.I.G. “is going to play hardball.â€

A spokeswoman for A.I.G.’s property and casualty business declined to comment.

“I wish I had a hammer to get them to do the right thing,†said Andrew J. Maloney, a partner in the New York firm of Kreindler & Kreindler, which specializes in aviation litigation. He is representing some of the US Airways passengers but has not filed any lawsuits. “They’re riding a wave of feel-good opinion about how well the flight crew handled the bird strike.â€

A spokesman for US Airways, Morgan Durrant, said the airline issued each passenger a check for $5,000 shortly after the accident to cover their immediate needs; it had no legal obligation to do so. He declined to discuss the airline’s liability insurance policy or claims processes, saying the matter was pending and he did not want to jeopardize it.

Those familiar with industry practices said it would be many months before the issue of liability was resolved.

Tess Sosa, who was aboard Flight 1549 with her husband, 4-year-old daughter and infant son, said she suffered a mild concussion during the landing, and her husband was treated for a leg injury and hypothermia. The family, from New York, continues to get hospital bills, she said. But her top priority was getting the insurer to pay for therapy to reduce the risk of post-traumatic stress disorder for her and her daughter.

Because the plane was full on the day of the accident, she and her baby were seated near the wings, while her husband and daughter were far in the rear. The plane struck the water tail-first, and water began pouring in where Mr. Sosa and daughter Sophia were sitting.

Ms. Sosa, clambering over seats toward the front of the plane with her son in her arms, looked back and caught a horrifying glimpse of her husband standing in the deepening water, trying to hold their daughter above the surface.

“I can tell you, he was looking straight at me and he didn’t even see me,†she said. Since then she has been haunted by the image, and the feeling that in her escape she abandoned her husband and daughter.

Ms. Sosa said Sophia “remembers everything. I just want her to walk away from this knowing that we did everything we could to make it make sense.†A.I.G. agents have told her that for therapy she should use her own health insurance, but it has a $3,000 deductible for mental health care.

“Why should we be paying out of pocket?†she said. “That’s why they’re there. They’re the insurer.â€

Aviation insurance specialists said that an airline’s liability insurer is not normally there for medical bills after a plane crash. Passengers’ health insurance may indeed pay first — for passengers who have it — or workers’ compensation for passengers traveling on business. Later, if liability is established, those insurers circle back and try to get reimbursed from the airline’s liability insurer.

But that does not help accident survivors who have expenses in the meantime.

A.I.G. has told Ms. Sosa and other passengers that it would pay for therapy, but only for three sessions.

“It’s like telling me, ‘We aren’t responsible for this. This is your trauma. You deal with it,’ †Ms. Sosa said.

In one exasperated conversation with an A.I.G. claims official, she invoked the taxpayer bailout, saying she doubted Congress and the Obama administration would approve of the stonewalling. The official “told me their division didn’t get a cent from the bailout,†she said.

Mr. Jorgenson, the software executive, said he did not have unpaid medical bills, but was frustrated about his claims for missing possessions. He sells specialized software to hedge funds and other investment companies, and must travel frequently to financial centers, wearing expensive suits and shoes, and carrying valuable computer equipment. He recently got some of his clothing back from the airline but the shoes were ruined, he said. One suit was missing its jacket, and his cufflinks and sunglasses are still gone. He got his wallet back but not the cash it held, he said.

Because he could document losses of more than $5,000, A.I.G. sent him a second $5,000, with a letter saying he could get an additional $10,000 if he signed a statement releasing it from any further claims. Other passengers are also being asked to sign the release in exchange for $10,000.

Mr. Jorgenson said he thought this was disingenuous, because some degree of liability might eventually be established. Then A.I.G.’s policy would be in play, but the passengers would have signed away their claims.

Mr. Chadbourne said he was not surprised to see A.I.G. holding firm.

“They really cannot row their own boat, totally, because they’ve got other people that they are making decisions for,†he said, explaining that an aviation liability policy typically spreads the risks among 8 or 10 insurers, with one lead underwriter — in this case A.I.G. — handling claims on behalf of the group. (Although A.I.G. is not the lead underwriter on the missing Air France flight, it is part of an insurance pool with potential liability.)

“Even though they’re giving the passengers a hard time, eventually they will be compensated to some extent,†he said. “There’s no big pot because there’s no death. But there’s still mental distress, and it is a compensatable illness which, eventually, in my opinion, they deserve. They went through hell.â€

You know what people? Be glad you're f***ing alive. I don't know what the odds are of surviving this type of incident, but they must be extremely small. And you want to complain about your damn laptop and keys? On the one hand, I want to try and put myself in their situation. I'm sure it wasn't a cakewalk, having to go through that. And as an attorney who does not work at a big law firm representing big insurance companies, I may one day have someone call me with the same type of case. On the other hand, how about just putting this in the category of suck it up? (A.K.A., sh** happens.) These were migratory birds, it was a fluke, unavoidable incident, and if your kids start having nightmares about it, well, instead of going to a $350 an hour shrink why don't you just be a parent instead? And who exactly is liable for this? The airline? The airport? The City of New York? Buy yourself some new shoes, hug your children a little tighter, count your blessings, and get on with your life.

[Rightwinger]

You know what people? Be glad you're f***ing alive. I don't know what the odds are of surviving this type of incident, but they must be extremely small. And you want to complain about your damn laptop and keys? On the one hand, I want to try and put myself in their situation. I'm sure it wasn't a cakewalk, having to go through that. And as an attorney who does not work at a big law firm representing big insurance companies, I may one day have someone call me with the same type of case. On the other hand, how about just putting this in the category of suck it up? (A.K.A., sh** happens.) These were migratory birds, it was a fluke, unavoidable incident, and if your kids start having nightmares about it, well, instead of going to a $350 an hour shrink why don't you just be a parent instead? And who exactly is liable for this? The airline? The airport? The City of New York? Buy yourself some new shoes, hug your children a little tighter, count your blessings, and get on with your life.

Amen!!!

I would have made out like a banshee getting a 5K check and been real happy to have it AND be alive!

I think they should all give that pilot their checks and set him up for life.

Post Traumatic Stress Syndrome what a crock.

[greenego]

I think if anyone needs to be sued its the nut jobs that won't let the airport authority control those damm ducks! (I know they call them geese)

[Guest TurboniumOxide]

Give me a .22, a scope, unlimited ammo and a gas grill and I wouldn't even charge them for my time.

[G27]

I swear, it seems like everyone wants to get paid for everything nowadays.

[oldogy]

You know what people? Be glad you're f***ing alive. I don't know what the odds are of surviving this type of incident, but they must be extremely small. And you want to complain about your damn laptop and keys? On the one hand, I want to try and put myself in their situation. I'm sure it wasn't a cakewalk, having to go through that. And as an attorney who does not work at a big law firm representing big insurance companies, I may one day have someone call me with the same type of case. On the other hand, how about just putting this in the category of suck it up? (A.K.A., sh** happens.) These were migratory birds, it was a fluke, unavoidable incident, and if your kids start having nightmares about it, well, instead of going to a $350 an hour shrink why don't you just be a parent instead? And who exactly is liable for this? The airline? The airport? The City of New York? Buy yourself some new shoes, hug your children a little tighter, count your blessings, and get on with your life.

Very well put, sir.

oldogy

[TGO David]

If I were the editor, this is how I would have changed the first paragraph of that news story...

For the first couple of days after his flight ditched into the Hudson River, Paul Jorgenson was just glad to be alive. But then a sense of entitlement set in...

[Punisher84]

Amen!!!

I would have made out like a banshee getting a 5K check and been real happy to have it AND be alive!

I think they should all give that pilot their checks and set him up for life.

Post Traumatic Stress Syndrome what a crock.

I agree with that except for the PTSD remark, unless you are just referencing it for the plane situation. I have a buddy that was in Iraq and he has PTSD, it's taken a huge toll on him and his family.

[Guest db99wj]

What is wrong with the U.S.? These type of people are what's wrong. YOU are in a jetliner that crashes....and lived......everyone......You need to be doing happy dances for the rest of your life, because you just escaped death. What a bunch of

[tng27]

Well this was a NY Times article after all. Where does personal responsibility fall in their list of important characteristics?

[E4 No More]

I swear, it seems like everyone wants to get paid for everything nowadays.

Ain't that the truth!

[MadMarx]

I am going to play devil's advocate a little here. I wonder if US Airlways is getting an insurance payment for the crashed airplane from AIG? I personally would have taken the $5000 and been happy also, but if that did not cover my losses and or medical bills I believe the insurer should cover them. Not to make anyone rich, but cover the expenses and losses.

If I am driving my car with someone in it with me and a deer runs out in front of me and I hit it, I would expect to have my insurance pay for the car repair, and for any medical treatment needed by my passenger up to the limits of my insurance coverage, and then I would be liable. The same should be the case for Us Airways and its insurance company AIG. It was not my fault the accident happened, but the passenger was in my car under my "control" so therefore I would have some liabililty

[canadienmike]

I am going to play devil's advocate a little here. I wonder if US Airlways is getting an insurance payment for the crashed airplane from AIG? I personally would have taken the $5000 and been happy also, but if that did not cover my losses and or medical bills I believe the insurer should cover them. Not to make anyone rich, but cover the expenses and losses.

If I am driving my car with someone in it with me and a deer runs out in front of me and I hit it, I would expect to have my insurance pay for the car repair, and for any medical treatment needed by my passenger up to the limits of my insurance coverage, and then I would be liable. The same should be the case for Us Airways and its insurance company AIG. It was not my fault the accident happened, but the passenger was in my car under my "control" so therefore I would have some liabililty

I agree with this statement. The people should have any medical expenses covered and the insurance should cover that, I mean isn't that the point of insurance?

[Guest db99wj]

You are correct, the insurance should cover expenses like medical, and replacement, of a lap top, etc, but the problem is with the PTSD remarks (real illness, not in the case IMO), my expensive cloths and shoes that got ruined, not normal things, but high dollar stuff....you gave me 5 grand at first, then another 5 grand....kind of stuff.

[canadienmike]

You are correct, the insurance should cover expenses like medical, and replacement, of a lap top, etc, but the problem is with the PTSD remarks (real illness, not in the case IMO), my expensive cloths and shoes that got ruined, not normal things, but high dollar stuff....you gave me 5 grand at first, then another 5 grand....kind of stuff.

PTSD not being the case is your opinion. I think that diagnosis should be left up to professionals. Who is to say what causes that? People react differently to stressful situations, and in the case of children, they most likely don't have the ability to just brush it aside and be thankful they are alive. And in some cases, a parent giving them a bug hug isn't going to make it all better. If a professional deems someone on that flight to be suffering from PTSD then I think it should be covered under insurance just like any other medical expenses. As for personal items lost, then I agree that the $5000 that the airline gave them should be enough.

[Guest db99wj]

PTSD not being the case is your opinion. I think that diagnosis should be left up to professionals. Who is to say what causes that? People react differently to stressful situations, and in the case of children, they most likely don't have the ability to just brush it aside and be thankful they are alive. And in some cases, a parent giving them a bug hug isn't going to make it all better. If a professional deems someone on that flight to be suffering from PTSD then I think it should be covered under insurance just like any other medical expenses. As for personal items lost, then I agree that the $5000 that the airline gave them should be enough.

I will agree to disagree on the "disorder" Stressfull situations like that can happen in a car wreck, and in kids, they wouldn't understand the magnitude of the accident (being in a plane vs a car). They would see it as a crash. Would they need counseling for the crazy event that caused stress in their life, maybe, is it a disorder, I don't think so. I think a lot of things get labled a "disorder" because in fact they had a disturbance in their lives. A disorder leads me to belive that there is an issue that is going to take a lot of work and effort in order to get through. Again back to kids that were on that plane, I believe they have more ability to brush things off and forget about them due to not understanding the miraculous event that they just lived through. Sure, the kids were upset, sure they might have been hurt, but after a plane ride, a boat ride, an ambulance ride, and then being the center of attention, I would bet most if not all are perfectly fine, a little different perspective but fine.

Really my main point still goes back to the "technological business man" bitching about is ****ing shoes. I would also be willing to bet this woman and her 4 year old doesn't have PTSD. But they do have $ signs in their eyes.

Good friend of mine, spent a little time over in the sandbox. His job was to convoy in the triangle of death, finding, detonating and preventing (trying to anyway) IED's from being placed on the primary transportation lines that our troops used. They would detonate an IED, then start to move on to find the next one, and they would hear something behind them, would be some more little dudes setting up a new IED just where the other had been blown up. Many gun battles. He also witnessed convoys that passed them up, get blown up down the road due to them not getting there yet. He was a very sociable, fun guy to be around before he left. I still have and have had some great conversations with him, are National Guard Units were close together and see's me as someone he can at least talk to, even though I have no fighting experience. But he has changed, he is not as active anymore, don't see him as much at the kids sporting events, or at school/church. Does he have PTSD....I think maybe he does, he might even has been diagnosed, but we haven't discussed it.

So you see, I believe PTSD is real, very real. I believe these people on the plane did go through a very stressfull time. If their were dead bodies, and people on fire, and body parts all over the plane and they some how made it out alive...then maybe, but the fact that all survived without really many major injuries....not as bad as what PTSD is intended for, again, IMO.

What irks me to know end is the labeling of crap these days, it goes back to the fact that everybody is always looking for someone else to blame. He's a bad kid. No he has ADD, he needs to be medicated. How about the parents be parents and discipline the little kid. Guns kill people, no they don't, it is the douchbag criminal with the gun that kills people. People need to take responsibility for their own actions and stop blaming everything else when the answer is the mirror.

The airline's insurance company, is paying for 3 sessions with a therapist. That is plenty of time for a therapist to determine if there is a problem. If so, then one of two things needs to happen. AIG continues to pay for it, or the persons personal insurance whether private or state or whatever, picks up and continues on because it would be determined a medical condition. Here is her quote "But her top priority was getting the insurer to pay for therapy to reduce the risk of post-traumatic stress disorder for her and her daughter." It sounds like to me they haven't been diagnosed by anyone other than herself. She never says she and her daughter "have been diagnosed". I wonder how much her lawsuit is going to be?

Call me cynical, that's the way I see it.

[canadienmike]

Really my main point still goes back to the "technological business man" bitching about is ****ing shoes.

I agree. Anyone complaining about their shoes is an idiot.

What irks me to know end is the labeling of crap these days, it goes back to the fact that everybody is always looking for someone else to blame. He's a bad kid. No he has ADD, he needs to be medicated. How about the parents be parents and discipline the little kid. Guns kill people, no they don't, it is the douchbag criminal with the gun that kills people. People need to take responsibility for their own actions and stop blaming everything else when the answer is the mirror.

The airline's insurance company, is paying for 3 sessions with a therapist. That is plenty of time for a therapist to determine if there is a problem. If so, then one of two things needs to happen. AIG continues to pay for it, or the persons personal insurance whether private or state or whatever, picks up and continues on because it would be determined a medical condition. Here is her quote "But her top priority was getting the insurer to pay for therapy to reduce the risk of post-traumatic stress disorder for her and her daughter." It sounds like to me they haven't been diagnosed by anyone other than herself. She never says she and her daughter "have been diagnosed". I wonder how much her lawsuit is going to be?

Call me cynical, that's the way I see it.

Actually, I pretty much agree with everything you said here. And maybe using the term PTSD is a little over the top. This situation cannot compare to soldiers that are constantly in stressful situations where they could die at any time and it wasn't my intent to equate the two. My point was that if a person needed counselling, then it should be covered by insurance regardless of how much is needed. And again, that is up to a professional to determine. Some people can bounch back really easily from something like this and some people may need a little more time. Even though they did all survive, I'm sure they thought they were going to die and I'm sure to some that would cause some emotional trauma.

[Guest db99wj]

I agree. Anyone complaining about their shoes is an idiot.

Actually, I pretty much agree with everything you said here. And maybe using the term PTSD is a little over the top. This situation cannot compare to soldiers that are constantly in stressful situations where they could die at any time and it wasn't my intent to equate the two. My point was that if a person needed counselling, then it should be covered by insurance regardless of how much is needed. And again, that is up to a professional to determine. Some people can bounch back really easily from something like this and some people may need a little more time. Even though they did all survive, I'm sure they thought they were going to die and I'm sure to some that would cause some emotional trauma.