AIG denies liability in Hudson River plane crash

Most of us still remember the dramatic crash landing of US Airways Flight 1549, when Captain Chesley “Sully” Sullenberger piloted a plane bound for Charlotte, NC into the Hudson River after a bird strike disabled its engines. Thanks to the quick thinking of Sullenberger and the flight crew, every passenger was evacuated before the plane sank.

http://www.youtube.com/watch?v=MSPsrhCPt-0

Now, however, insurance giant AIG is citing the flight crew’s heroics as a reason US Airways doesn’t have to compensate the passengers. Aviation liability insurance operates under different rules than regular insurance; it requires a finding of negligence on the part of the airline before any money is paid out. Ironically, the daring rescue of Flight 1549’s passengers- and the public’s fascination with the story- is giving AIG reason to deny liability and keep passengers from recouping their damages.

This is bad news for passengers, given the likelihood of post traumatic stress disorder among survivors of an airplane crash. The New York Times reports that Tess Sosa, a passenger on the plane with her husband and two young children, is struggling to cope with the ordeal, but can’t afford therapy because of her health insurance’s high deductible for mental health care.

AIG- who were bailed out by the government last fall during the financial meltdown- have so far offered each passenger $5,000, while offering $10,000-20,000 to certain other passengers with greater property loss. To get any money, they will have to sign a release of all claims. Airline crash investigations can drag on for months and something proving liability might still be discovered; anyone who accepts the offer would then be left out in the cold.

For the time being, AIG is holding out. As Ms. Sosa puts it, “It’s like telling me, ‘We aren’t responsible for this. This is your trauma. You deal with it.’”