Insurance-Covered Repairs

Alexander D. Mitchell IV · **Posted:** Mon Feb 17, 2020 4:01 pm

Has anyone else here had to contend with repairs covered to rolling stock or infrastructure under insurance?

Here's an unusual tale:
The Deltic Preservation Society in the UK has three ex-British Rail 3300-hp high-speed Deltic locomotives. One, D9009 Alycidon, is mainline-certified. Last March 3rd, while operating a rail tour, the locomotive suffered an enormous power surge, which damaged the traction motors and other electrical equipment. The evidence indicated either arcing from overhead catenary out of position or a lightning strike. The loco "failed" and had to be replaced on the charter.

In January (after ten months) it was reported that the society's insurer had agreed to cover at least some of the necessary repairs.

Quote:

The DPS is pleased to advise members and supporters that, at long last, full authorisation has been received from the society’s insurer to proceed with the repair of the six damaged traction motors, sustained when a huge power surge caused the calamitous failure of D9009 last March 3.
The traction motors had been removed at Burton on Trent where D9009 has resided ever since, and a preliminary assessment had been made by the repairer, Sulzer. The work to effect a full repair can now proceed.
This is by no means the end of the problems. Discussions continue with the insurer regarding the loss of revenues (4 rail tours were lost due to D9009’s non availability) and No. 2 generator also requires remedial work.
It has just been decided to bring D9009 back to Barrow Hill from Burton-in-Trent by road transporter - it is sitting on accommodation bogies. It will be far easier and cheaper to lift out the power unit with the damaged generator at Barrow Hill to enable a swap to be made (a conditioned generator is available which will then allow the damaged one to be sent away). Also returning to Barrow Hill will be the two bogies which were under D9009 on its ill-fated railtour.
One bogie which will be staying at Nemesis’ Burton depot will be the fabricated bogie originally under No. 9 which was exhibiting signs of one of its middle wheelsets being rubbed and marked. This is to be stripped by Nemesis to try and ascertain what was causing this long-standing problem.
A large amount of Society funds is still required to repair this defective bogie and the Virgin MoneyGiving account remains open for anyone kind enough to make a donation.

Yesterday's Facebook update:

Quote:

Now the loco is back at Barrow Hill [where the DPS maintains a loco shed and workshop] it will be sheeted over and remain outside to facilitate a thorough clean and to allow it to dry out. This may take up to 4 weeks.
Once the loco is inside, a thorough assessment and testing of the traction cabling, switchgear and protection equipment will be carried out. It’s not been possible so far, due to the need to preserve evidence and working through the Insurance Company’s forensic engineering process. A worst case scenario is that all of the traction cables will need replacing. Estimated worst case cost £25,000.
In order to obtain insurance cover in the future and to limit the possibility of such catastrophic damage in the future, new protection equipment will need designing and fitting to our locos. This will be filters to absorb high voltage surges that occur during fault conditions and events like wheel slip at high speed or traction current overload. The design work and approval of the changes will require professional support. Estimated cost £30,000.
Asbestos has been found in two traction motor armatures and two field coil frames that need to be rewound as part of repairing the damage sustained when D9009 failed near Prestonpans on 03/03/2019. We may not be able to recover the cost of removing it through our insurance. Cost £15,000.
A briefing will be provided at the Society AGM about what is likely to have happened on 03/03/2019, lessons to learn and improvements we can make for the future.

Now, I ask:

About the only thing most rail buffs know about "insurance" is that their excursions got cancelled, or the price went up sharply, because of it.
Have any of your major North American operational outfits had to deal with having to repair a preserved locomotive or other rolling stock under insurance? Any advice or nightmares to share?

Paul D · **Posted:** Mon Feb 17, 2020 4:21 pm

I was not involved in a any way but I believe the Soo Line 2719 was repaired by insurance after the collision with a Wisconsin Central freight train in Chippewa Falls around 2000ish.

The stories I heard of the repairs included the usual "That was old damage or wear and tear".

Wasatch RR Cont · **Joined:** Wed Nov 29, 2017 2:32 pm **Posts:** 68

Yes. Wasatch RR Cont has done mechanical repairs that were covered under an insurance policy that had noting to do with an accident or other damage, strictly mechanical failure. Though I am not at liberty to tell you who the customers were or how this happened, I will tell you that one such customer was located in the UK and said customer had taken out a policy on mechanical damage only, regardless of circumstance.

I was amazed at how much they paid and did not argue with our costs in this situation. You CAN insure anything...even a hole-in-one at a golf course (which is how most of those car giveaways are handled).

We have had one case in the USA that is the same and one case in Switzerland that was the same. Total, we have dealt with three insurance claims that were insured on mechanical issues only.

Kindly,

John E. Rimmasch

wrg113 · **Joined:** Fri Feb 12, 2010 7:52 pm **Posts:** 109

I am a Licensed Public Insurance Adjuster. I carry both the Pennsylvania and New Jersey license. I've been in Property claims for 16 years and can say with confidence that I am qualified to comment on the issue of damage to buildings, structures, and their contents.

My advice is to make sure that your agent fully understands the unique nature of your facilities and operations. Too often, especially with commercial and farm/ranch policies in particular, there are holes in coverage that handcuff the outcome of a claim. This is usually because the agent is out of their element and does not fully grasp the specific needs of the client.

Discuss your coverage with your agent. Make sure you have adequate amounts of coverage and that it includes everything you need it to. Also, for high value or rare items be sure to schedule their value in advance.

It's not a bad idea to get a second opinion from a competitor or even a PA like me.

Wasatch RR Cont · **Joined:** Wed Nov 29, 2017 2:32 pm **Posts:** 68

WRG113,

It is unfortunate that this discussion will not get the views that it deserves. This topic is very much under-covered and under-discussed as a business and preservation discussion item.

You mentioned a word in your post that most have no idea the definition of....other than it is a word we use at most of our depots; Schedule.

To "schedule" your items in insurance is to note them specifically with a dollar amount. Too often, we simply "blanket" our policies and thus the issue that WRG113 mentioned. Blankets can be tough if the insurance company does not understand what they are covering or what you are expecting to be covered.

In the situations I was involved in, the locomotives had very specific and detailed "schedules" that included everything. Catastrophic failure of the boiler. Minor boiler repairs, running gear, cosmetics and so on. The policy was not a "if it breaks fix it" it was, "if this item breaks it is worth this much and we expect it to be repaired."

The term "schedule" needs to be explored more by our industry and I suspect, as I have found in my own case, the more we "schedule" the better (in some cases) the costs can be.

Kindly,

JohnE.

Insurance-Covered Repairs

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