Lawsuit Filed by White Aviation Against U.S. Specialty Insurance for Aviation Claim

White Aviation LLC has filed a lawsuit against U.S. Specialty Insurance Company, alleging a breach of contract and bad faith concerning an aviation insurance claim. The case, pending in the U.S. District Court for the Middle District of Alabama, centers on a disagreement over coverage for engine replacement costs of a 1981 Beech 200 aircraft.

The complaint outlines that the aircraft suffered damage due to a front gear failure on June 13, 2023. Under the aviation insurance policy, which covers damages up to $1,750,000, White Aviation promptly reported the incident and collaborated with the insurer's adjuster for repairs. Initially, both parties agreed that new propellers and engines were necessary, with the insurer authorizing the purchase of replacement engines for $850,000 and a $200,000 deposit was made on November 1, 2023.

A dispute arose over the final financial settlement. On September 9, 2025, the insurer issued a significantly lower payment of $267,987.87, citing "betterment" as the justification—asserting that the replacement engines increased the aircraft's value. White Aviation argues this deduction violates the policy’s repair clause, which mandates covering reasonable costs without exceeding the agreed value minus the deductible. With the aircraft grounded due to a repair shop's lien for unpaid costs, White Aviation is pursuing legal claims of breach of contract and bad faith, seeking both compensatory and punitive damages, and has requested a jury trial.