'Fast & Furious 7' Insurance Claim Could Reach Record-Breaking $50 Million

Universal — using face-replacement technology and the late Paul Walker's brothers to finish the film — is in a negotiation to get reimbursed as the costs soar past $250 million.

A version of this story first appeared in the May 30 issue of The Hollywood Reporter magazine.

When Paul Walker was killed in November in the midst of shooting Fast & Furious 7, it was clear the actor's untimely death could trigger by far the largest insurance claim in Hollywood history. That now appears to be the case as the project is undergoing an effects-packed 13-week shoot that will culminate in July with an enormous crowd scene using 600 people in the town of Rosamond, near Bakersfield, Calif. But according to a source with knowledge of the situation, there is growing tension between Universal Pictures and its insurer, Fireman's Fund, over the size of a record-smashing claim in the ballpark of $50 million.

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The cost of finishing Fast & Furious 7, originally budgeted at $200 million, will be daunting, even though a person with ties to the project says the storyline has not changed drastically. "They are finishing the film more or less as scripted, replacing Paul with [computer-generated] face replacement," says this person. "They have two of Paul's brothers as well as an actor to 'play' Paul when needed." (The Walker brothers, 25-year-old Cody and 36-year-old Caleb, both are helping fill in for their brother physically -- Caleb primarily for body size and mannerisms and Cody for the eyes. But the filmmakers need to create a character that not only looks like Paul but also performs like him. That's the actor's job.) Peter Jackson's Weta is tackling the effects work using three cameras (in addition to the main-unit cameras) to capture Walker's stand-ins for face replacement. "There is a massive amount of gear," reports the source. "Everything they want with Paul gets done three times over. Three [actors] times seven cameras per shot is a clusterf--- of money being spent."

Director James Wan also will come up with new scenes from unused footage Walker had shot for the previous two Fast & Furious films.

All of this has proved expensive, and insurance broker Brian Kingman of Arthur J. Gallagher & Co. believes Fireman's Fund will have to pay more than $50 million on a film now estimated to cost $250 million or more. A spokesman for Fireman's Fund declined comment, but in a 2012 discussion about the challenges of movie-business insurance, Fireman's Fund entertainment underwriting director Wendy Diaz noted that delays alone can cost as much as $250,000 a day on a big- budget movie, adding up to "millions of dollars."

In the case of Fast & Furious 7, Walker's death Nov. 30 at age 40 in a Porsche crash not only caused more than four months of delay but also necessitated additional work from writer Chris Morgan before filming and effects work could restart. A shoot set to wrap in January now is scheduled to end in July, requiring the production to pay stars including Vin Diesel more to keep them longer. Fireman's Fund is not on the hook for the entire cost of finishing the movie because Universal must pay what it would have cost to complete the project had the accident not occurred. But therein lies the dispute because it is a matter of judgment what producer Neal Moritz and the studio felt was required to finish the film without Walker. A Universal representative denies any tension, saying the insurance company has been "nothing but supportive."

In such cases, says Kingman, questions of whether and how the film will be completed and what percentage must be paid by the insurer are worked out in negotiations between the insurer and the studio's broker -- in this case, Fireman's Fund and Aon/Albert G. Ruben. An informed source says the insurer and Universal are at odds over how much of the ongoing work was necessitated by Walker's death and how much cost the studio would have incurred regardless as it finished the movie.

STORY: Paul Walker's Brothers to Help Complete 'Fast & Furious 7' Action Scenes

Intending to keep its franchise going, Universal is at work on an eighth installment and possibly more. Fast & Furious 7 is set for release April 10, 2015.

Universal, like all studios, routinely has insurance on projects to protect its investment if tragedy strikes. The record for an insurance settlement on a major franchise film appears to have come on Marvel's Iron Man 3, which was delayed three weeks in August 2012 after star Robert Downey Jr. broke his ankle. Sources peg that settlement at $10 million to $15 million. A larger settlement of about $20 million was paid when John Candy died in the middle of filming Wagons East! for Carolco in 1994. (The film was completed but performed poorly.)

Fast & Furious production resumed in April in Atlanta and returned to Abu Dhabi for a week of shooting. It now has moved to Southern California (during recent days, it was filming at Leo Carrillo State Park in Malibu).

In the wake of the fatal crash, it was unclear whether Universal would scrap the film and start anew -- which presumably would have been even more expensive for its insurer -- or replace Walker with another actor or eliminate his character. Since deciding to keep Walker in the film, the studio has courted fans by characterizing the move as a tribute to the actor. An April statement on the movie's Facebook page read: "We believe our fans want that, and we believe Paul would want that, too."

Matthew Belloni contributed to this report.