Insurance costs because of last month’s deadly Metro crash, even before it has to face pricey victims’ lawsuits and repairs to its automatic safety system.
The transit agency’s annual liability insurance premiums have nearly doubled because of the deadly June 22 crash and a bus accident last fall that killed a California man, Metro spokeswoman Angela Gates said.
Metro was able to reduce costs in other areas, but the higher dues mean the system will pay an estimated $2.4 million more than the $9.5 million it was paying.
In addition, Metro is facing at least five lawsuits in connection with the crash, with the plaintiffs seeking a total of more than $27 million.
The cases represent a handful of the victims of an accident that killed nine people and injured more than 70. The potential legal payouts could soar if the rest of the crash victims or their families file suit.
The transit agency’s liability insurance should cover legal fees stemming from the lawsuits. But Metro will be on the hook for the higher insurance premiums, as well as the $5 million deductible for each accident. That brings total expenses to at least $12 million more out of the agency’s coffers.
Metro also would have to pay for anything above the maximum payout under its policy, which could happen with such a deadly crash. Metro declined to say what the cap is on the policy, concerned it could make the agency financially vulnerable.
“I’ve never spoken about this in public,” Metro Chief Financial Officer Carol Kissal said. “It might put targets on our future claims and liability claims that we have.”
She said she was conflicted about not sharing the amount, given that riders and taxpayers would be paying for it. “There’s no doubt about it that we are using public money,” she said.
Metro also will have to shoulder much of the costs for repairing track circuits and electrical infrastructure because the agency’s property insurance policy covers only physical damage to items such as trains, Kissal said. Those costs remain unknown.
But Metro is looking to hire forensic accountants to help pinpoint costs from the crash that the insurance policies could cover.
“The bottom line goal is to recover as much as we can under the policy,” she said. There is no word yet on how much the accountants will cost. The agency is seeking bids.
