In the tragic wake of the recent Air India plane crash, questions are mounting: Who is financially responsible? How are insurance claims handled? And what support is available for victims and their families?
Passenger Compensation: What Are the Rights?
Under the Montreal Convention, 1999 — which India is a signatory to — airlines are liable to compensate victims up to 113,100 Special Drawing Rights (SDRs) per passenger, which amounts to approximately ₹1.2 crore. If negligence is proven, compensation may exceed this limit.
For domestic flights, the Carriage by Air Act, 1972 and rules set by the Directorate General of Civil Aviation (DGCA) determine compensation. Interim relief must often be paid within 30 days of the incident.
Who Actually Pays the Claims?
Air India, like most commercial carriers, holds extensive aviation insurance. However, the financial burden primarily falls on insurers and global reinsurers. Two main types of policies come into play:
- Hull Insurance: Covers damage or total loss of the aircraft.
- Liability Insurance: Covers passenger injuries/deaths and third-party property damage.
Indian public sector insurers like New India Assurance, alongside international reinsurers through markets like Lloyd’s of London, are believed to underwrite these policies.
Aircraft and Third-Party Damage
If the aircraft is deemed a total loss, the hull insurer pays the agreed insured value (e.g., $100 million). If property or people on the ground were affected, third-party liability coverage compensates accordingly.
Coverage for Crew and Legal Costs
Airline crew members are protected under employer liability insurance or worker’s compensation. Additionally, airlines carry legal expenses coverage to defend claims brought by victims’ families, especially in international jurisdictions.
Claims Timeline and Payout Process
The timeline varies, but here is the general process:
- Initial investigation (by DGCA/AAIB)
- Submission of insurance claims by families
- Assessment and verification by insurers
- Interim payments within 30 days
- Full and final settlement in 6–24 months
Government Role and Ex Gratia Relief
In cases with strong public attention, the government often announces ex gratia compensation in addition to insurance payouts. These discretionary payments can range between ₹5 lakh to ₹10 lakh per victim, depending on the circumstances.
The Human Cost Behind the Numbers
While insurance provides financial relief, it cannot compensate for the human loss. Every claim represents a life lost or impacted. Aviation tragedies like this underline the importance of safety, preparedness, and a strong legal framework for victim support.
Stay tuned for further updates on the investigation and compensation process surrounding the Air India crash.