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Insurer deducts $436,000 for used aircraft engine in Alabama suit
White Aviation says the carrier mailed a balance check of $267,987.87 after earlier approving $850,000 for replacement engines, leaving the aircraft grounded.
White Aviation LLC has sued U.S. Specialty Insurance Company in federal court in Alabama, accusing the insurer of breach of contract and bad faith over an allegedly underpaid aviation claim tied to a 1981 Beech 99 aircraft.
According to the complaint, a front gear failure on June 13, 2023 caused substantial damage during landing. White Aviation says the parties agreed propellers and engines needed replacement, and on November 1, 2023 the insurer approved buying two replacement engines for $850,000, with the insurer paying a $200,000 deposit.
The dispute centers on what White Aviation received after the repairs. The insurer mailed a balance check for $267,987.87 on September 9, 2025, and White Aviation alleges the insurer treated used engines as a “betterment,” deducting $436,431.57 even though it had agreed the replacement cost was $850,000.
White Aviation argues the policy’s repair clause does not allow any “betterment” deduction and says the alleged shortfall left the aircraft grounded, with a repair shop placing a lien and keeping the logbooks. The company is seeking compensatory and punitive damages for breach of contract, bad faith, and “abnormal bad faith,” and requested a jury trial, Insurance Business reports.