topic Re: $5K ~ Seriously? in Community Chat

$5K ~ Seriously?

SydneyH — Thu, 27 Mar 2014 03:47:14 GMT

The airlines is offering family members this amount as compensation for their missing loved ones. This is soo insulting, it's hard to imagine........

http://www.microfinancemonitor.com/2014/03/25/mh370-flight-malaysia-pm-airliner-finally-say-crash-theory-right-5k-compensation-each/

Re: $5K ~ Seriously?

Lila Belle — Thu, 27 Mar 2014 03:49:05 GMT

That doesn't apply to the Americans. I think it's like $8mil.

Re: $5K ~ Seriously?

gazelle77 — Thu, 27 Mar 2014 03:49:51 GMT

Am sure there will be a lot of lawsuits, airline, Boeing, etc.

Re: $5K ~ Seriously?

sylviahomeatlast — Thu, 27 Mar 2014 03:53:59 GMT

that's heartless and inexcusable

Re: $5K ~ Seriously?

september — Thu, 27 Mar 2014 03:54:56 GMT

$8 mil. for an American, and $5 k...for who? Wow...in some cases, that would be almost what a passenger might pay for a ticket (if in 1st class, and booked at the last minute)

Re: $5K ~ Seriously?

dooBdoo — Thu, 27 Mar 2014 04:03:32 GMT

With all due respect, I’m the last to defend the Malaysian government or the airlines for the way they’ve handled all this, but here’s the story:

Malaysia Airlines' $5,000 payment is just the beginning

"Malaysia Airlines offered initial financial assistance to the families of Flight 370 passengers on Tuesday, and promised that additional compensation was being prepared.

The payments of $5,000 per passenger should help families cope with the immediate financial strain caused by a long search for the plane. But the airline is eventually likely to pay next of kin compensation that ranges into the millions of dollars per passenger.

Under an international treaty known as the Montreal Convention, the airline must pay relatives of each deceased passenger an initial sum of around $150,000 to $175,000.

Relatives of victims can also sue for further damages -- unless the airline can prove that it took all necessary measures to prevent a crash or any other incident that prevented passengers from arriving safely.

Liability could also stretch beyond the airline to the plane's manufacturer, Boeing, if a mechanical flaw is ruled the cause. But that would be difficult to prove if the plane is not recovered..."

Full article: http://m.kcci.com/money/Malaysia-Airlines-5-000-payment-is-just-the-beginning/25149870

Re: $5K ~ Seriously?

SydneyH — Thu, 27 Mar 2014 04:05:01 GMT

That airline should be prepared to go out of business.

Re: $5K ~ Seriously?

bells4me — Thu, 27 Mar 2014 04:08:57 GMT

$5000 is just to help with immediate expenses. They have a 1 billion $ insurance policy for the lawsuits.

Re: $5K ~ Seriously?

dooBdoo — Thu, 27 Mar 2014 04:10:21 GMT

On 3/26/2014 SydneyH said:
That airline should be prepared to go out of business.

Sydney, I've been thinking the same thing. My understanding is they opted to save money up front and not to upgrade their tracking system software to a better one. Plenty of mistakes seem to be showing up with all the investigations.

Re: $5K ~ Seriously?

SydneyH — Thu, 27 Mar 2014 04:13:25 GMT

On 3/26/2014 dooBdoo said:

Sydney, I've been thinking the same thing. My understanding is they opted to save money up front and not to upgrade their tracking system software to a better one. Plenty of mistakes seem to be showing up with all the investigations.

I suspect without the wreckage, Boeing will not be in a hurry to share blame. The plane was only 7 ~ 8 years old, I think.

Re: $5K ~ Seriously?

Lila Belle — Thu, 27 Mar 2014 04:15:10 GMT

NEW YORK (CNNMoney)

<h2>To the long list of unanswered questions about Malaysia Airlines Flight 370, add one that can't be answered with search planes, black boxes or satellite data. How much money does the airline owe its passengers' families?</h2>

International and contract law provide some answers, but the true figures will likely be settled when insurance claims and lawsuits are filed by relatives of the flight's 239 victims. Some attorneys, citing their past work on plane crashes, say the total for each passenger could vary from $400,000 to $10 million.

Based on calculations and more than two weeks of searching, Malaysia Airlines this week declared the airliner lost and said "none of the passengers and crew on board survived." The carrier said it has offered families an initial payment of $5,000 per passenger.

At least one U.S.-based case against Malaysia Airlines and Boeing, which manufactured the aircraft, is in progress. Aviation attorney Monica Kelly said she filed a request for documents and other information in an Illinois court on Tuesday. She said she represents Januari Siregar, whose son was aboard the Flight 370.

Boeing declined to comment late Tuesday, and officials with Malaysia Airlines couldn't immediately be reached.

Here are answers to some questions about compensation for the victims.

$5,000 isn't a lot of money. Can victims' families expect more? The initial payment is just that -- assistance to handle immediate expenses like travel and lodging.

Insurance claims and lawsuits will likely be handled separately.

Many factors will be considered in those negotiations between families and the airlines' insurers, which will make each family an offer and seek to settle the claim.

Bradley Meinhardt, a managing director at risk management services firm Arthur J. Gallagher & Co., gave an example.

"They're going to look at the earning potential of that deceased individual and the fact that he's got a wife and young kids that are going to need to be provided for for a long time," he said. "A single individual is going to be calculated differently."

Those calculations will vary based on age, the victim's country of residence and a variety of other factors, he said.

Despite the intrigue surrounding the missing plane, the claims will move forward quite normally, Meinhardt said.

"The accident is just like any other accident," he said. "The only difference is nobody knows exactly what caused it."

Can the families also file lawsuits? Yes, and many likely will.

Some, Meinhardt said, will be looking to make a statement of frustration with the airline.

Others may pursue targets beyond the airline, such Boeing (BA, Fortune 500). Those cases could be more difficult to prove without physical evidence from the 777 jet.

Mark Dombroff, an attorney who works with the airline industry and previously worked for the Federal Aviation Administration and Department of Justice, said there is "utterly no basis at all" to believe that a defective product caused the crash.

The lawsuits wouldn't depend on "whether they find the aircraft or not," he said. Instead, the suits would revolve around the airline's obligation to provide its passengers safe passage from point A to point B.

An international law known as the Montreal Convention specifies where cases may be brought. The families can sue, for example, in the country where the passengers bought the ticket, where the airline is based or their final destination.

That means most suits would be brought in Chinese or Malaysian courts. Dombroff said only families of the three Americans could sue Malaysia Airlines in U.S. courts.

When will the first insurance claims be paid? International law requires airlines to carry hefty insurance policies that cover the passengers and plane in nearly every circumstance. Nuclear detonations are the only events that aren't typically covered, Meinhardt said.

The first claims involving passengers could be paid out in the coming weeks and months.

A claim for the lost aircraft itself is already in motion. Insurer Allianz Global Corporate & Specialty said last week that it and other firms "have made initial payments" of an unspecified amount as part of "our contractual obligations where an aircraft is reported as missing."

Meinhardt said that policy is upward of $100 million and is typically paid directly to the airline or funneled into an escrow account.

Families can also begin to collect on any life insurance policies or flight insurance they have purchased. Those claims are handled separately from the airline's insurance.

What if the airline goes bankrupt? Malaysia Airlines lost money in the final three months of 2013. But even if the airline's financial situation worsens and it becomes insolvent, families of the victims can still collect through the maze of insurance policies.

The industry norm totals between $2 billion and $2.5 billion of coverage per plane, said aviation attorney Dan Rose of Kreindler & Kreindler.

That typically includes about $10 million of insurance behind each passenger, said Brian Havel, a law professor and director of the International Aviation Law Institute at DePaul University.

Don't expect a major incident like this one to sink the insurers, either.

"The aviation insurance market is highly specialized and involves multiple consortia of different insurance companies -- insurers and reinsurers," Havel said. Multiple insurers take small stakes of the larger policies so no single company bears the entire risk.

How is this different than if the crash happened in the U.S.? Besides international law, local law specifies how the investigation will be carried out and victims' families will be handled.

U.S. law requires airlines to develop family assistance plans that include compensation for expenses in addition to the claims paid by insurers.

Re: $5K ~ Seriously?

DustyPink — Thu, 27 Mar 2014 04:16:39 GMT

They think they can put a price on someone's life? Unreal.

Re: $5K ~ Seriously?

Lila Belle — Thu, 27 Mar 2014 04:17:39 GMT

On 3/26/2014 dooBdoo said:
On 3/26/2014 SydneyH said:
That airline should be prepared to go out of business.

Sydney, I've been thinking the same thing. My understanding is they opted to save money up front and not to upgrade their tracking system software to a better one. Plenty of mistakes seem to be showing up with all the investigations.

Most airlines don't want to upgrade them. It would cost them a staggering $100,000 per plane.

Re: $5K ~ Seriously?

SydneyH — Thu, 27 Mar 2014 04:21:30 GMT

On 3/26/2014 DustyPink said:
They think they can put a price on someone's life? Unreal.

Well they will have to do it eventually, but right now, the families should have carte blanche, ok maybe not but a reasonable sum to carry them through the year at the very least. They've been through h@ll and back.

Re: $5K ~ Seriously?

dooBdoo — Thu, 27 Mar 2014 04:25:06 GMT

On 3/26/2014 Lila Belle said:
On 3/26/2014 dooBdoo said:
On 3/26/2014 SydneyH said:
That airline should be prepared to go out of business.

Sydney, I've been thinking the same thing. My understanding is they opted to save money up front and not to upgrade their tracking system software to a better one. Plenty of mistakes seem to be showing up with all the investigations.

Most airlines don't want to upgrade them. It would cost them a staggering $100,000 per plane.

I'm not in aviation, so I don't know other than what I've been trying to read. Here's one article I found. They estimate the cost per flight would only have been $10:

Malaysia Airlines Didn't Spend $10 on Upgrade That May Have Found Missing Plane

http://mashable.com/2014/03/19/system-found-missing-plane/

Re: $5K ~ Seriously?

DustyPink — Thu, 27 Mar 2014 04:27:08 GMT

On 3/26/2014 SydneyH said:
On 3/26/2014 DustyPink said:
They think they can put a price on someone's life? Unreal.

Well they will have to do it eventually, but right now, the families should have carte blanche, ok maybe not but a reasonable sum to carry them through the year at the very least. They've been through h@ll and back.

Yes they have been through H and back, SydneyH. But, still 5,000 doesn't seem right at all.

Re: $5K ~ Seriously?

dooBdoo — Thu, 27 Mar 2014 04:27:16 GMT

On 3/26/2014 SydneyH said:
On 3/26/2014 dooBdoo said:
<em>Sydney</em>, I've been thinking the same thing. My understanding is they opted to save money up front and not to upgrade their tracking system software to a better one. Plenty of mistakes seem to be showing up with all the investigations.

I suspect without the wreckage, Boeing will not be in a hurry to share blame. The plane was only 7 ~ 8 years old, I think.

I don't remember seeing the age of the plane, but they did say there was damage repair to a wing (the tip, if I remember correctly) not long ago. I imagine sorting out liability, even if the wreckage is found, could be complicated.

Re: $5K ~ Seriously?

ShowMe — Thu, 27 Mar 2014 04:29:48 GMT

When I heard that amount, it literally made me sick to my stomach. To me, that was their way of trying to get rid of those people......but they have other plans..... You just can't turn your backs on those grieving people. Try to pay them off and then walk away thinking that's it....the will get over it. Like heck they will......they are hurting people and are humans that want some answers.

Re: $5K ~ Seriously?

dooBdoo — Thu, 27 Mar 2014 04:30:08 GMT

On 3/26/2014 DustyPink said:
On 3/26/2014 SydneyH said:
On 3/26/2014 DustyPink said:
They think they can put a price on someone's life? Unreal.

Well they will have to do it eventually, but right now, the families should have carte blanche, ok maybe not but a reasonable sum to carry them through the year at the very least. They've been through h@ll and back.

Yes they have been through H and back, SydneyH. But, still 5,000 doesn't seem right at all.

DustyPink, It appears the $5,000 is only one payment to defray some costs right now, in addition to accommodations they've been paying for since the disappearance of the flight. Truly, as you say, there's no price that can be given to each precious soul on board. What agony those families and friends are experiencing, I can't even begin to imagine.

Re: $5K ~ Seriously?

ShowMe — Thu, 27 Mar 2014 04:32:10 GMT

I heard something today that just literally also made me sick. With the heat they have there, they had been told to refrigerate their batteries......and nope, the haven't been. Unbelievable......