Quickie category

[Mookie]

UP/BNSF - are they self-insured?

[edblysard]

Yes and no…they have insurance policies, for catastrophic events, but the policies have pay out limits, after that is reached, it is all out of their pocket!

[cx500]

They will also have a big deductible, in the millions of dollars, before the insurance compoany will need to get involved.

[AgentKid]

Both Ed and cx500 have it right

When there is damage first there is the deductable, then there is the insurance payout, and then everybody starts sueing everybody for what will likely be out of pocket settlements.

Back in the day of loose car railroading, damage to goods in transit was so routine that in every large centre there would be an auction house whose primary business would be to sell off damaged goods for the proverbial "scratch and dent" sales. In Calgary, for instance, the primary auction house was conveniently located across 9th Ave. SE from the CPR freight sheds to simplify getting the stuff off of railway property. The money from these sales was set aside for use in paying the deductables from claims involving wrecks, etc. From what I understand, the money raised by the auctions did go a significant way toward keeping up with deductable payments.

Bruce

 

[cacole]

Today's Harbor Freight Tools company started out as a railroad salvage seller.

 

[BaltACD]

cacole

Today's Harbor Freight Tools company started out as a railroad salvage seller.

 

 

I suspect the tools they sold then were of higher quality than what they get from China today!

[Paul_D_North_Jr]

You can find the details in their annual reports - well, at least for UP; I doubt that BNSF issues them anymore since being bought by Berkshire Hathaway about 5 years ago.  Try NS or CSX instead.     

- Paul North. 

[CSSHEGEWISCH]

Growing up where I did, everybody knew about Railway Salvage in Hammond, conveniently located next to the IHB just east of Hohman Ave.  You could find almost anything you could think of (and a few other things, too) inside their walls.

[edblysard]

Sunday, the BNSF had a little whoopsie here at the PTRA, they had just doubled up a train, about 125 cars, and on their way out managed to lay five loaded articulated auto-racks and a bunch of coil cars over on their sides.

The issue is was it train handling or track failure…BNSF train and crew running on UP tracks, so the finger pointing is still ongoing.

And, since Houston is the major point of entry for Audi/Volkswagen in the southern US, well, one of the racks had about 6 Audi R8s inside…130 to 140 thousand dollars a pop at least.

Now, if they would just have a scratch and dent sale!

The reality is that once the insurance company settles up with Audi, the cars will be crushed, no matter what actual condition they are in, just because of the liability issue,

I looked at some of them, most have no apparent damage at all, some a few minor scratches and a dent or two, and one lost its windshield. The R8s all looked fine to me.

But, if they were sold, and there was a issue later….

Shame though, the R8 is a really pretty car!

[Mookie]

Paul_D_North_Jr

You can find the details in their annual reports - well, at least for UP; I doubt that BNSF issues them anymore since being bought by Berkshire Hathaway about 5 years ago.  Try NS or CSX instead.     

- Paul North. 

 

I am wading through them, but it is slow going.  Will keep on....

[chad s thomas]

Hi Ed,

I've heard in the past that in a derailment involving autos they would be scrapped for liability reasons. Do you know where they draw the line? Say a 100 autorack train derails a couple cars, What can be delivered and what goes to the scrapper? I was told the whole train worth would be wasted, but that seems a little extreame.

[edblysard]

Only the contents of the cars that derailed get scrapped, those that stay on the rails are still good to go.

I am sure a lot of it depends on the insurance adjusters determinations also, the car may derail, remain up right with no damage to the autos, and the adjustor may not write them off...in this case, all the autoracks were laying on their sides, so....

[chad s thomas]

Thanks ed, that makes more sense then the story I heard (scrap em' all).

That brings up another question. between the securing straps/blocks and the cars suspension, in the event of a autorack 'layover' ,how often does the auto body make contact with the autorack structure?

[jeffhergert]

edblysard

Only the contents of the cars that derailed get scrapped, those that stay on the rails are still good to go.

I am sure a lot of it depends on the insurance adjusters determinations also, the car may derail, remain up right with no damage to the autos, and the adjustor may not write them off...in this case, all the autoracks were laying on their sides, so....

 

We had a derailment 10 or so years ago.  Involved some auto racks with Cadillac Escalades.  One car only had one truck on the ground, the other autoracks involved weren't as lucky.  All involved, including the one  with only one truck derailed, had their loads scrapped.  (Conviently at the scrap yard on the other side of the tracks as it turned out.)  

Jeff

[carnej1]

Given that the core of Berkshire Hathaway is a group of insurance businesses I guess the case could be made for BNSF to be aself insured company.