Lycoming Denies Insurance Threat

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Lycoming is denying claims by a Texas law firm that owners of IO-540 engines affected by its crankshaft recall are risking future insurance coverage by accepting a compensation package. "We strongly disagree with this position and are certain that accepting our Customer Care Program with its general release will not adversely affect your future insurance needs," Lycoming President Michael Wolf said in a letter posted on the company Web site. Wolf's letter was written after a story in Monday's edition of AVweb about a warning sent to some engine owners that signing the release that goes along with the weekly cash payments and replacement aircraft rentals might prevent insurance companies from covering the affected aircraft in the future. Lawyer Charles Ames, who is representing plaintiffs in a class action suit against Lycoming, said he wasn't giving legal advice, just reminding his clients to check with their insurance carrier before signing on the dotted line. Ironically, that's exactly the same advice Lycoming has for owners of all 2,000 affected aircraft. "We are certainly encouraging people to discuss this with their insurance company and if there are any questions they are welcome to call us and we'll go through the general release with them," said Lycoming spokeswoman Susan Bishop. Meanwhile, Bishop said, the phone lines are already humming with concerned customers.