In what would be India’s costliest aviation insurance claim, Thursday’s fatal Air India crash in Ahmedabad is likely to see liabilities between $211 million and $280 million (up to Rs 2,400 crore). The aircraft, a Boeing 787-8 Dreamliner, which was headed to London Gatwick, had 242 passengers and crew members. One person survived the accident when it happened barely 30 seconds after takeoff.
Aircraft accident insurance, covering passengers for injuries or death in flight incidents, is mandatory on commercial flights. Premiums range from as little as Rs 10 to as high as Rs 500, varying with the distance of travel and coverage. This insurance is the key to the rescue in situations like the Ahmedabad crash, when the plane lost altitude minutes after taking off from Sardar Vallabhbhai Patel International Airport at 1:38 PM.
241 individuals were killed in the crash, including 169 Indians, 53 British, seven Portuguese, and one Canadian. A passenger survived by leaping from the plane moments before it crashed.
Types of Coverage and Compensation
Insurance companies pay compensation in three circumstances: on death, the nominee is paid the insured amount; in case of injuries, there is payment for emergency medical attention and surgery; and for disabilities, either temporary or permanent, payment is made.
Airlines carry fleet insurance policies covering aircraft hulls, spare parts, and passenger and third-party liabilities. Ramaswamy Narayanan, Chairman and Managing Director, General Insurance Corporation of India (GIC), opines that the Air India crash will entail both hull and liability claims.
Montreal Convention and Payout Estimates
The total liability could be as high as $280 million, said Amit Agarwal, CEO and MD, Howden India. The crashed Dreamliner was valued in 2021 at around $115 million. “The loss would be covered on the value declared by the airline,” regardless of the damage being total or partial, Agarwal said.
Families of passengers are covered under the Montreal Convention of 1999 and are eligible for compensation. The compensation would be computed in Special Drawing Rights (SDRs), equivalent to 128,821 SDRs or about $171,000 (Rs 1.47 crore) as of now.
Personal Travel Insurance Provides an Additional Shield
Most global visitors also choose individual travel insurance, which is generally 4% to 10% of the entire trip cost. Higher premiums are charged for older visitors, and prices depend on the length of the trip, medical background, and travel location. Prices for international insurance may be anywhere from Rs 150 to Rs 1,000 per day.