Even as the crash of AI 171 is set to become India's most expensive aviation claim, settlements could take years for families of victims.
While the aircraft hull insurance is likely to be settled sooner, liabilities to passengers and third parties are likely to take longer for settlement.
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Aircraft hull insurance could be paid off right away in the next course of the two-three months, said Sourav Biswas, business head- Aviation Insurance at Alliance Insurance Brokers. Based on available information, the operator will receive an estimated $80 million for the aircraft's loss and damage, with limited deductions.
Hitesh Girotra from Prudent Insurance Brokers also said that the aircraft hull insurance policy is relatively straightforward, dependent on the value of the aircraft.
As soon as a crash happens, the reinsurer companies deploy internationally reputed surveyors who gather available information from the site and submit a report basis the investigations and findings. After the report's submission and assessment, they will release an insurance claim report which will be handed to insurers, he explained.
For liabilities, there will be appointment of lawyers or legal firms who will complete due diligence basis the Montreal convention, Girotra said.
Initially, the airline will offer compensation which some families will accept and some won't, choosing instead to file a suit in the court of law, Biswas said. Given that there are citizens of India, United Kingdom, Canada and Portugal, settlement timelines will then depend on multiple courts across multiple jurisdictions, he explained.
Similar to motor claims, these too can be challenged on the basis of victims' current and potential earnings, etc, Girotra said.
Proceedings will be guided by the Montreal Convention to which the countries are signatories. The Montreal Convention 1999 establishes airline liability in the case of death or injury to passengers, and in cases of delay, damage or loss of baggage and cargo.
The MC99 is designed to be a single, universal treaty to govern airline liability around the world.
Given that we don't know timelines regarding investigations and findings, insurance and reinsurance companies will likely create reserves on books which will be used for payments till court proceedings, Girotra said.
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