Air India Plane Crash May Trigger Over Rs 1,000 Crore in Insurance Claims, Could Be India’s Biggest
The recent crash involving an Air India Boeing 787 Dreamliner near Ahmedabad may result in insurance claims exceeding Rs 1,000 crore, according to industry experts. If confirmed, this could turn out to be the largest aviation insurance payout in India’s history.
The tragic incident, which led to the death of over 240 people and caused major damage on the ground, has raised serious concerns around both aircraft hull loss and passenger liability.
Air India’s aircraft are covered under a global $20 billion aviation insurance programme. This includes both hull and liability insurance, partly underwritten by Tata AIG—part of the Tata Group—and backed by Indian public sector insurers such as New India Assurance and GIC Re. The reinsurance component is led by AIG, and spread across multiple global reinsurers. Shares of both New India Assurance and GIC Re declined following the incident, falling 4% and 3% respectively.
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Speaking on the situation, Amit Agarwal, Managing Director and CEO at Howden India, said “The aircraft damage will come under aviation hull all-risk, which covers the declared value of the plane, along with spares and equipment. The Dreamliner involved—VT-ABN, delivered in 2013—was insured for about $115 million as per 2021 records.”
While the hull value itself is significant, the passenger liability claims are expected to far exceed it. Under the Montreal Convention of 1999, airlines are liable to compensate families of deceased passengers, and the amount is currently pegged at 1,28,821 SDRs, or approximately $171,000 per passenger. These payouts can vary depending on the passenger’s nationality and route.
Hitesh Girotra, Executive VP at Prudent Insurance Brokers, said “The hull loss is just one part. Depending on how many international passengers were onboard, the liability side may become much larger. There may also be third-party claims from damage to property and civilians on the ground.”
According to Girotra, the current hull value of the aircraft could be between $75–80 million, but the total liability burden—including possible court-awarded compensation—may stretch this claim far beyond the Rs 1,000 crore mark.
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Industry insiders point out that large aircraft like the Boeing 787 usually come with high-value policies. Narendra Bharindwal, President of the Insurance Brokers Association of India, added “Aircraft hull values typically range from $200–300 million. But on international routes, the liability component alone can go well beyond $500 million, especially when reinsurance is spread across global players.”
While the cause of the crash is still under investigation, experts say this incident highlights the complex and evolving nature of aviation insurance, especially in emerging markets like India where air travel is growing rapidly.
The final claim value will depend on technical assessments, court proceedings, and how liability is distributed among insurers and reinsurers.
Disclaimer: This post is for general informational purposes only. It does not constitute financial advice. Please consult a qualified professional before making financial decisions.
