Air India Crash: Insurance Claims May Reach Up To Rs 1,000 Crore, Is This India's Costliest Airline Tragedy Yet?
While the aircraft damage will be covered in $280-million insurance coverage, the biggest cost will come from the 'liability insurance'. Insurance claims may reach Rs 1,000 crore.
In India's one of the deadliest airline tragedies, a London-bound Air India Flight 171 crashed on June 12 claiming a total of 241 lives on board. Few also died in the doctors' hostel where the Boeing 787-8 Dreamliner aircraft fell near the Ahmedabad airport. Air India has announced a compensation of Rs 1 crore each to the families of those lost their lives. However, the flight crash will also trigger insurance claims, which, as per estimates, might go as high as Rs 1,000 crore.
Airline liabilities in the event of death or injury are governed by international conventions such as the Montreal Convention, 1999, to which India is a signatory, according to experts.
They said that under the Convention, airlines are liable to pay:
Up to 128,821 Special Drawing Rights (SDRs) (about $1.33 per SDR), as of October 2024, per passenger in case of death or bodily injury, irrespective of fault.
Compensation beyond that limit is also possible if the airline is proven negligent.
While interim compensation may be announced by the airline, final compensation for passengers will be determined under the Montreal Convention of 1999, to which India became a signatory in 2009, brokerage firm Howden (India) MD and CEO Amit Agarwal told news agency PTI.
'Compensation is calculated using Special Drawing Rights (SDRs), which stood at 128,821 SDRs (approximately $1.33 per SDR) as of October 2024. The actual payout will depend on the coverage purchased by Air India," Agarwal said.
On Thursday, June 12, a London-bound Air India plane carrying 242 passengers and crew crashed moments after taking off from Ahmedabad International Airport. Of these, 169 are Indian nationals, 53 are British nationals, 1 Canadian national and 7 Portuguese nationals.
Air India has insured its entire fleet under a $20-billion global aviation insurance programme. This insurance is divided into two parts — one for damage to the aircraft itself (called 'hull insurance') and the other for legal and passenger claims (called 'liability insurance").
As far as aircraft damage is concerned, Agarwal said, it would be covered under the aviation hull all-risk section, which insures the current valuation of the aircraft, including spares and equipment.
For a Dreamliner, this value can range between $211 million and $280 million, depending on its configuration, age, and other factors, he added.
'The aircraft involved (VT-ABN) was a 2013 model and, based on available information, was insured for approximately $115 million in 2021. Whether the damage is partial or total, the loss would be covered based on the value declared by the airline," he said.
Narendra Bharindwal, president of the Insurance Brokers Association of India (IBAI), told PTI that aviation insurance programmes for major airlines such as Air India are arranged on a fleet basis and reinsured across international markets like London and New York.
'No single insurer bears the entire risk — coverage is widely distributed among global reinsurers, with shares as small as 1.5 per cent to 2 per cent and a lead reinsurer typically taking 10-15 per cent. The financial impact of such incidents is shared globally across this network," Bharindwal said.
It is too early to ascertain the overall liability (passengers and third party) on the operator because of this crash.
Overall Insurance Claims
While the aircraft damage will be covered in the $211 million-$280 million insurance coverage, the biggest cost will come from the 'liability insurance'.
Experts also said the actual amount the passenger receives will depend on a number of factors.
Typically, the claimant (family of the deceased passenger or the injured) has to prove the extent of the actual damage suffered. Factors such as age of the deceased passenger, educational status, employment, last salary drawn, marital status, general economic status, the number of dependants the extent of dependency are, typically, considered to assess the damage.
According to timesnownews.com, 'The (overall) claim could go as high as Rs 1,000 crore and could have a ripple effect on the aviation insurance industry."
It is being considered to be one of the deadliest and costliest airline crashes in the Indian aviation history.
Stay updated with all the latest business news, including market trends, stock updates, tax, IPO, banking finance, real estate, savings and investments. Get in-depth analysis, expert opinions, and real-time updates—only on News18. Also Download the News18 App to stay updated!
tags :
Air India crash
Location :
New Delhi, India, India
First Published:
June 13, 2025, 10:57 IST
News business Air India Crash: Insurance Claims May Reach Up To Rs 1,000 Crore, Is This India's Costliest Airline Tragedy Yet?
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Hindustan Times
25 minutes ago
- Hindustan Times
Mostly intact black box seen as key break in Air India plane crash investigation
The black box recovered from the Air India flight 171 crash site in Ahmedabad shows minimal damage and the data it contains is likely to be extracted in India itself, officials said on Saturday, raising hopes for some early clues about what caused the Boeing 787 jet to crash just 33 seconds after take-off. Also Read: Air India plane crash: Aircraft's right side engine was overhauled in March The relatively intact condition of the flight data recorder represents a crucial break for investigators, who typically face lengthy delays in air crash probes when damaged black boxes must be sent to original equipment manufacturers for extracting the data . In this case, that would have been Boeing's HQ in the US. To be sure, the data may still have to be shared with Boeing and the manufacturer of the plane's engines, GE, for analysis. A police officer said crash site analysis by National Security Guard teams using advanced scanners and sniffer dogs found no evidence of explosives at the BJ Medical College complex , where the plane crashed and exploded, killing 241 of the 242 on board besides several students of the college and residents of a nearby colony. Also Read: Committee to probe Air India crash; report due in 3 months: Aviation ministry 'The black box will give a clear idea of the situation before the crash. It was found on Friday and it appears to not be much damaged. Hence it is more likely to be analysed by Indian investigating agency (Aircraft Accident Investigation Bureau- AAIB) at its headquarters in Delhi,' said an official close to the investigation, who asked not to be named. In April, the civil aviation ministry inaugurated a new laboratory built in Delhi to correlate data from cockpit voice recorders, radar, and flight data recorders to enhance accuracy in air investigations. Also Read: Air India plane crash: Tea-seller's son among victims, ground toll rises A second official aware of the matter added that a final decision was pending. 'The relevant authorities are weighing options. While the AAIB, in all likelihood will access the black box, the authorities are also discussing the need for inputs from Boeing or [engine-maker] GE on the crash data.' Teams from the AAIB continued focusing on recovering the aircraft's tail section, which contains the second black box, officials said. The Boeing 787 has two black boxes, one at each end of the aircraft, for redundancy. Each black box, which is in fact coloured bright orange, in a 787 contains what is known as the enhanced airborne data recorder (EADR) that includes the flight data recorder and the cockpit voice recorder. The recovered black box contains not just voice recordings from the cockpit but data on every activity inside the aircraft, including which buttons pilots pressed, levers they activated and what settings instruments were put to, officials said. A team from the U.S. National Transportation Safety Board is assisting the investigation, while Boeing officials from the US were expected to have arrived on Saturday. The NSG inspection on Saturday morning using advanced scanners and K9 units from Delhi and Ahmedabad cleared security concerns about the crash. 'The NSG teams did not find any trace of explosives or IEDs across any debris of the Air India plane,' said a police officer who requested anonymity. During the security sweep, however, NSG teams made a grim discovery—the body of a woman, possibly a crew member, trapped beneath the aircraft's tail section that had been lodged in the wall of the hostel mess of the medical college. ' Their scanners can detect objects hidden beneath opaque surfaces. It was during this search that the body was found,' the police officer said. After receiving clearance from NSG and police, two large cranes were deployed on Saturday afternoon to remove the aircraft's tail section from the hostel mess wall—a delicate operation that took nearly four hours. The tail, while removed from the building, remains at the crash site along with other aircraft components scattered across the cordoned hostel complex. Officials said all debris must be preserved as evidence until the investigation is complete. 'Instructions have been issued to agencies on the ground in Ahmedabad to preserve all parts of the aircraft wherever it is placed because it is the most crucial evidence,' said a senior civil aviation ministry official. The wreckage will eventually be moved to a hangar at the airport or an airbase close to the city, one of the officials cited above said, adding that it is here that investigators will attempt to reconstruct the aircraft to understand the sequence of failures that led to the crash. 'At the hangar or the air base, wherever it is taken, the remaining part of the damaged aircraft will be put together to probe what led to the crash,' an official said, explaining that a decision on where to take debris is pending Boeing officials are expected to visit the site and examine the wreckage before any major relocation occurs, the officials added. The crash site remained under heavy security on Saturday with Gujarat police and Air India officials guarding aircraft components scattered across the medical college campus. The affected parts of the campus, spread roughly over a 200 metre radius, remains sealed to all except investigators. 'The plane missed hitting our colony by just about 100-200 metres,' said Sujata, a homemaker whose house is adjacent to the complex. 'Police said entry will be banned for a few more days, so this means the plane's parts will be kept there till that time,' said Sujata, whose rooftop has become the go-to spot for TV anchors and photographers attempting to get a visual of the site.
Time of India
an hour ago
- Time of India
Crest mobilises UT departments to promote rooftop solar adoption
1 2 3 Chandigarh: Aiming to promote the use of solar energy in private homes, Chandigarh Renewable Energy and Science and Technology Promotion Society (Crest) has initiated a big move under PM Surya Ghar: Muft Bijli Yojna. Crest plans to involve several departments of the Chandigarh administration to help spread awareness and encourage people to join this central government scheme. In a detailed letter, Crest has asked the municipal commissioner, deputy commissioner, and secretary engineering of the UT administration to actively support the scheme. Their role will be to engage with residents and motivate them to install rooftop solar panels. The goal of the scheme is to help one crore households across the country generate their own electricity using solar power by the end of the 2026–2027 financial year. In its communication to the officials, Crest explained that the ministry of new and renewable energy (MNRE) will soon brief field officers and promote experience-sharing on the scheme. Therefore, it is important to help people understand the scheme, its guidelines, and its goals. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Giao dịch CFD với công nghệ và tốc độ tốt hơn IC Markets Tìm hiểu thêm Undo The letter reads that a video conference will soon be held by the ministry to brief field officers and encourage experience-sharing. Officers are expected to actively participate and come well-prepared with a good understanding of the scheme's guidelines and objectives. Expansion is the challenge According to the Chandigarh administration, CREST has already implemented the scheme on government properties in the city. By installing solar panels on the rooftops of government buildings, the authority is generating around 20 megawatts (MW) of solar power under this scheme alone. The main challenge now is to expand the scheme to private buildings, which requires the consent of individual households. Currently, Chandigarh is generating a total of about 90 MW of solar power. Resco vs PM scheme Under the Resco model for private properties, which is still awaiting approval from the central government, consumers will not have to pay anything upfront. A selected company will install solar panels on rooftops at no cost to the property owner. In return, the consumer will be charged Rs 3.95 per unit (kWh) of electricity generated. This rate will remain fixed for a BOT (build, operate, transfer) period of less than 20 years. Out of this amount, Rs 0.07 per unit will be retained by the electricity department as facilitation charges, while the remaining Rs 3.88 per unit will be paid to the Resco company on a monthly or bi-monthly basis. In contrast, under the PM Surya Ghar: Muft Bijli Yojana, the consumer is required to make an initial capital investment to install the solar panels. However, the government provides a subsidy to support this investment. For installations up to 2 kilowatts, a subsidy of Rs 30,000 per kilowatt is offered, totalling Rs 60,000. For the third kilowatt, an additional Rs 18,000 is provided. This means that for a 3-kilowatt system, the total subsidy amounts to Rs 78,000. No more subsidy is given for systems above 3 kilowatts, as the maximum subsidy cap is fixed at Rs 78,000. Follow more information on Air India plane crash in Ahmedabad here . Get real-time live updates on rescue operations and check full list of passengers onboard AI 171 .
United News of India
an hour ago
- United News of India
Crompton Greaves secures solar pumps order worth Rs 101 crore from MEDA
Mumbai, Jun 14 (UNI) Crompton Greaves Consumer Electricals Ltd said that it has secured its largest-ever order in the solar water pump segment. The company has received a Letter of Award (LoA) from the Maharashtra Energy Development Agency (MEDA) valued at over Rs 101 crore (exclusive of GST) for the design, manufacture, supply, transportation, installation, testing, and commissioning of 4,500 Off-grid Solar Photovoltaic Water Pumping Systems (SPWPS) across Maharashtra under Component B of the PM-KUSUM scheme. This significant order underscores Crompton's ongoing commitment to providing sustainable irrigation solutions that empower farmers across India. The turnkey project also includes a comprehensive five-year maintenance contract (CMC), ensuring long-term reliability and support for the installed systems. Crompton's advanced solar-powered DC submersible pumps are engineered for durability, high performance, and ease of use, specifically designed to address water access challenges in off-grid and rural regions. The company will leverage its trained field personnel, local district support teams, and robust after-sales service network to ensure seamless implementation and operational excellence throughout the project's lifecycle. Rajat Chopra, Business Head - Home Electricals & Pumps at Crompton Greaves Consumer Electricals Ltd., commented, "We are delighted to have received the Letter of Award from MEDA for 4,500 Solar Photovoltaic Water Pumping Systems under the PM-KUSUM scheme. This milestone not only marks our largest solar pump order to date but also reflects our ongoing commitment to delivering reliable and high-performance pumping solutions tailored to the needs of farmers across India. The order reinforces confidence in Crompton's product excellence, long-lasting performance, and robust service network. It further strengthens our position as a trusted partner in driving solar-powered irrigation forward. At Crompton, we remain focused on enabling clean energy access for farmers while ensuring seamless execution backed by quality, innovation, and strong after-sales support." UNI JS BD
