AIG Balks at Claims From Jet Ditching In Hudson

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."

This is not being shared to accuse AIG or other insurance companies of some nefarious agenda. There are plenty of other incidents to support that view. It is here merely to support an observation: As one should expect, insurance companies are not your "friends". Instead, they are self-focused businesses that strive to make as much money as they can.

In all your dealings with them, keep that in mind and you should be okay.