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Lauren Scruggs

Calls Off Insurance War

in Propeller Maiming

3/28/2012 10:00 AM PDT BY TMZ STAFF

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Lauren Scruggs -- the model who suffered gruesome injuries in an airplane propeller accident last year -- is halting all legal action after agreeing to a settlement with the pilot's insurance company.

Scruggs had gone to battle with Aggressive Insurance Services because she felt entitled to more than a $200,000 settlement ... the most the company claimed it could give to a "passenger."

Scruggs had argued that she wasn't technically a passenger when the accident occurred because she had already departed the aircraft when she was struck by the plane's propeller ... losing a hand and an eye.

Now, both Scruggs and A.I.S. have jointly announced they have reached a settlement ... but the terms are confidential. We're guessing it's a helluva lot more than $200k.

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12:00 PM PT: A.I.S. Division Head Joel Crisalli tells TMZ, "Details on a settlement of this type are privileged and are between the company and the family, any settlement discussions are privileged."

Crisalli adds, "As people, I have been as sensitive to Ms. Scruggs and her recovery as anybody else is in the country. She's a lovely young lady and this is a horrible accident. We don't want to do anything at all that in any way is going to make her feel bad."

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