Amtrak Train Crash Victims Face $200M Injuries Cap

For the first time, Amtrak could face a $200 million payout to train crash victims – the limit set by Congress. But that may be too low to cover the costs of the eight lives lost and more than 200 people injured in the May 12 derailment in Philadelphia.

That payout cap for a single passenger rail incident was part of a late effort in 1997 to pass a law that would rescue Amtrak from financial ruin and help it one day become independent.

Adjusted for inflation, which the law does not consider, that amount would be just under $300 million now. And Amtrak is still far from independent.

An Associated Press review of past cases found that Amtrak never before has been liable for a $200 million payout for a single passenger rail incident. The Philadelphia crash could be the first time the liability ceiling would actually apply to the railroad. It’s not known how high the costs of victims’ deaths and injuries from the May 12 crash will run.

The train, which left Washington headed to New York, was moving at more than twice the speed allowed on a curve when it derailed not long after it stopped at Philadelphia’s 30th Street Station.

“I don’t think Amtrak has ever faced a situation like this, and since they own the Northeast Corridor, they’re 100 percent on the hook,” said Frank Wilner, author of the book, Amtrak: Past, Present, Future.

Using past passenger rail accidents as a guide, some lawyers expect damages from the crash to be similar to a 2008 accident in Los Angeles, which resulted in a $200 million payout to victims. In that crash, the train’s engineer was texting and didn’t stop at a red signal when the train collided head-on with a freight train, killing 25 people and injuring more than 100.

The money was paid to victims by Metrolink, which provides commuter rail service in Southern California, and Veolia Environment, a French company that operated the rail service at the time.

In the wake of the May 12 Amtrak crash, some legislators have begun taking a renewed look at the liability cap. On May 18, U.S. Sen. Bill Nelson, D-Fla., filed legislation aimed at helping victims of the May 12 Amtrak derailment.

His bill would raise the current $200 million cap on the amount the rail company is obligated to pay victims after an accident to $500 million. It would be retroactive to May 12, 2015. It would also allow the Secretary of Transportation to change the limit if the agency determines that a different minimum level of financial responsibility is needed to satisfy claims.

An Amtrak spokesperson declined Insurance Journal’s request for comment on insurance coverages. But Amtrak’s 2013 annual report, the most recent annual report available on Amtrak’s website, shows that Amtrak has a wholly-owned subsidiary and captive, Passenger Railroad Insurance Limited (PRIL) in Bermuda, that provides excess liability and property insurance coverage.