House votes to cap punitive damages from air disasters

Posted: Wednesday, May 01, 2002

JUNEAU (AP) -- The House approved a measure Tuesday that limits punitive damages paid by Alaskan air carriers for crashes.

The bill is aimed at reducing skyrocketing insurance premiums paid by rural air carriers.

''It's quite apparent in this state we have a crisis within the air transportation industry,'' said Rep. Lisa Murkowski, R-Anchorage.

Aviation crashes are the leading cause of work-related deaths in Alaska. Alaska pilots have 100 times the occupational death rate of all U.S. workers and five times the death rate for all pilots operating in the United States.

The bill is intended to control the cost of premiums -- which the aviation industry said has risen by as much as 50 percent in some cases -- so that small carriers can survive, lawmakers said.

Alaska law requires carriers to have at least $150,000 per seat coverage for bodily injury, but most air services have higher coverage.

The measure would limit punitive damages to $300,000 if the aircraft has 20 or fewer seats. Damages would be capped at $500,000 for aircraft with 30 or more seats.

It also caps damages against an aviation employer based on the number of employees the air service has.

Lawmakers representing rural communities argued that the measure will preserve essential air service for many areas by capping damages.

It passed the House on a 32-7 vote. Reps. Ethan Berkowitz, D-Anchorage; Sharon Cissna, D-Anchorage; Eric Croft, D-Anchorage; Gretchen Guess, D-Anchorage; Beth Kerttula, D-Juneau; and Vic Kohring, R-Wasilla, voting no.

Berkowitz said the bill does not include assurances from the insurance industry that such legal limits will result in cheaper insurance for pilots.

''There's no guarantee whatsoever that the benefits will be passed on to the air carriers,'' Berkowitz said.

The bill now goes to the Senate.

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The bill is House Bill 271.



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