Air India Crash Explained: What Every Air Traveller Must Know About Payouts, Insurance & Airline Liability

 

When the unimaginable happens — a plane crash — understanding compensation rights becomes crucial for affected families and travellers. From airline liabilities to travel insurance payouts, here’s a detailed yet simple breakdown of how compensation works after an aviation tragedy.

Airline Liability: What Are Airlines Legally Bound to Pay?

In India, air passenger compensation is largely governed by the Montreal Convention, 1999, an international agreement to which India is a signatory.

✅ Key Compensation Highlights:

• Up to 128,821 Special Drawing Rights (SDRs) (approx. ₹1.55 crore) per passenger, for death or bodily injury — regardless of fault.

• Additional compensation possible if airline negligence is proven.

• These provisions are mandatory for international flights; however, Indian domestic airlines often adhere to similar norms under DGCA guidelines.

But here’s the catch: The final amount depends on factors like age, income, dependants, and economic

Travel Insurance: The Unsung Hero in Air Travel

While airlines have legal liabilities, travel insurance acts as an additional financial shield, especially for passengers and their families in times of crisis.

💰 Typical Travel Insurance Payouts:

• ₹25 lakh to ₹1 crore for accidental death

• ₹5 lakh to ₹10 lakh for permanent disability

• Medical evacuation & emergency hospitalisation

• Daily cash benefit for trip interruptions or hospital stays

However, only those who actively purchase a travel insurance policy before their trip are eligible for these benefits. Unfortunately, many Indian travellers skip travel insurance, especially for domestic flights.

No Travel Insurance? You May Still Get Covered…

Even if you didn’t buy a separate travel insurance policy, you might still be eligible for:

• 🏢 Airline compensation, as per international or DGCA rules

• 🏛️ Government ex-gratia payments, in special or high-profile cases

• 💼 Employer-sponsored insurance, for business trips

• 💳 Credit card-linked travel insurance, if booked through premium cards

• 🧳 Group tour insurance, via agencies or corporate policies

Legal Delays: Why Some Families Wait Years for Compensation

In many tragic crashes, families don’t receive compensation immediately. Why? Because:

• Investigations take time

• Liability may be disputed or unclear

• Missing nominee or insurance documentation

• Passenger lacked coverage or proof of dependency

🧠 Tip: Always update nominee details and keep travel records.

Behind the Scenes: How Airlines Are Insured

For example, the Air India Boeing 787 that crashed in Ahmedabad was reportedly insured for $120 million. Here’s how airline insurance works:

• ✈️ Aircraft hull insurance: Covers damage to the plane itself

• 👥 Passenger liability: Covers death or injury payouts

• 👨‍👩‍👧‍👦 Third-party liability: Covers damage to people or property on ground

In Air India’s case:

• A $20 billion fleet-wide insurance was secured in April

• Tata AIG is the lead insurer, with ICICI Lombard and public insurers also onboard

• The entire risk is reinsured by London-based firms

Final Thoughts: What Every Flyer Should Do

1. ✅ Buy travel insurance before every flight — even domestic ones

2. 📃 Nominate a beneficiary and keep documents updated

3. 💳 Check credit card benefits for hidden travel coverage

4. 📞 Inform family members of your insurance & travel details

5. 🧠 Know your rights under the Montreal Convention & DGCA