Air India Ahmedabad plane crash: Insurance coverage up to Rs 1000 crore, most expensive accident in India

NEW DELHI: One of the biggest air disasters India has ever seen took place in Ahmedabad yesterday. 294 precious lives were lost. This includes passengers, medical students and locals. Authorities had announced yesterday that the Tata Group would pay Rs 1 crore each to those who died in the disaster. In addition to this, they will also get insurance money. There are indications that the total compensation will be close to Rs 1,000 crore. If that is the case, this will be the costliest disaster in India's history so far.

Heard of the Montreal Convention? This is an agreement. It specifies the compensation to be paid to the relatives of a person who dies or is injured in an air accident. The agreement came into force in 1999. According to this agreement, airlines are obliged to pay compensation to those who die or are injured in accidents. India signed it in 2009.

According to the figures from last October, a passenger who dies or is injured will get about Rs 1.4 crore. If it is clear that the accident was caused by the negligence of the airline, the compensation to be paid will be even higher. The interim compensation will be announced first at the time of the accident. The compensation announced by Tata now falls in this category. The final compensation will be paid as per the Montreal Convention. The final compensation amount will be announced after the investigation into the causes of the accident.

Damage Insurance

Air India has insured all its aircraft under a $20 billion global aviation insurance program. It covers ‘hull insurance’ for damage to the aircraft and ‘liability insurance’ for accidents to passengers. These insurances will be based on the value of the aircraft at the time of the accident, says Amit Agarwal, MD and CEO of brokerage firm Howden (India). The Air India Boeing 787 Dreamliner that crashed was a 2013 model. Based on the information available, the aircraft was insured for about $115 million in 2021, Amit Agarwal said.

The insurance for those who die or are injured is calculated based on many factors. Age, educational qualification, last salary if employed, income if not salaried, whether the person is married or not, the number of people who were dependent on the person, and their general financial situation are taken into account. Experts say that when all these are taken into account, the insurance claim can go up to Rs 1000 crore.