Air India Crash: How Insurance Claims Are Likely To Play Out

The crash of an Air India flight minutes after taking off from the Ahmedabad airport on Thursday is set to become India's most expensive aviation claim, and could go up to Rs 2,400 crore.

No-fault compensation up to Rs Rs 1.2 crore will help avoid drawn-out legal battles, with potential for far higher compensation beyond that amount, if negligence is proven, said Narendra Bharindwal, president at Insurance Brokers Association of India.

Hitesh Girotra, vice president of aviation and specialty lines at Prudent Insurance Brokers Pvt., explained that the nationality of the passengers on board will define the minimum liability applicable to the operator, as per the Montreal Convention. Since, the aircraft crashed into a residential apartment, there is third party property damage liability on the operator. "While the hull component is easy to ascertain, understanding it to be an agreed value policy; but it is too early to ascertain the overall liability (passengers and third party) on the operator because of this crash,” he said.