Air India plane crash insurance claims might clock in at a staggering Rs 2,400 crore

The Air India crash on Thursday in Ahmedabad could turn out to be India's most expensive aviation claim. Liabilities are expected to range between $211 million and $280 million, or up to Rs 2,400 crore. Flight accident insurance is offered on all flights and can start from as little as Rs 10 and go up to Rs 500, depending on the distance and coverage. Air India Boeing 787-8 Dreamliner was going to London Gatwick with 242 people, of whom 241 died.

It took off from Sardar Vallabhbhai Patel International Airport in Ahmedabad at 1:38 pm and crashed within 30 seconds after failing to gain elevation. The deceased include 169 Indian nationals, 53 British nationals, 7 Portuguese nationals and a Canadian national. One passenger miraculously survived by jumping off the plane.

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Flight accident insurance typically offers compensation to those affected in case of an injury or death. It can be claimed in three scenarios: if a passenger dies due to an aircraft-related incident, the nominee is given the amount. The insurance also applies to emergency medical expenses in case a passenger is injured and seeks surgery, treatment and post-treatment care. It can also be claimed if one suffers permanent or temporary disabilities due to a flight-related incident.

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Airlines have fleet insurance policies, which cover risks such as aircraft hulls, spare parts, and liabilities to passengers and third parties, Ramaswamy Narayanan, Chairman and Managing Director of the General Insurance Corporation of India (GIC), told NDTV. In case of the Air India crash, claims are expected under both hull and liability. The total amount doled out will factor in things like the age of the deceased, among other things.

Amit Agarwal, CEO and MD at Howden India, says the amount can go up as high as $280 million.

The Dreamliner that crashed was insured in 2021 for approximately $115 million. Agarwal said that the "loss would be covered based on the value declared by the airline", irrespective of whether the damage is partial or total.

Passengers will be offered compensation under the Montreal Convention of 1999. The amount will be calculated under Special Drawing Rights (SDRs), which is currently valued at 1,28,821 SDRs, or roughly $1,71,000 (Rs 1.47 crore).

Personal travel insurance

People going to foreign countries also commonly opt for personal travel insurance. It usually costs between 4 per cent and 10 per cent of the total trip cost. Older passengers have to shell out more. Trip duration, destination, medical issues etc. also affect the premium. International travel insurance can cost between Rs 150 to Rs 1000 per day.