Breakdown of Insurance Payouts for Air India Crash Victims Released, Different from Compensation
- The catastrophic crash of Air India Flight AI171 on 12 June 2025 has become India’s deadliest aviation disaster, claiming nearly 280 lives
- With insurance payouts expected to reach a record-breaking $475 million, the incident is set to reshape global aviation risk markets
- From passenger compensation to third-party liability, the scale of the fallout is both human and financial
The deadly crash of Air India Flight AI171 on 12 June 2025 is poised to become the largest aviation insurance payout in Indian history, with total claims projected to reach $475 million (€445 million), according to Fortune.
The disaster has sent ripples across global insurance markets and prompted renewed scrutiny of aviation risk coverage.
Source: Getty Images
India’s deadliest air disaster
The Boeing 787 Dreamliner, en route from Ahmedabad to London, went down shortly after takeoff, crashing into a student hostel.
Of the 242 people on board, 241 lost their lives, alongside at least 38 individuals on the ground—including students and staff—making it officially India’s worst air disaster.
Insurance fallout from Air India crash
The insurance ramifications are substantial. The destroyed aircraft alone is expected to cost insurers an estimated $125 million (€108.9 million), said Ramaswamy Narayanan, chairman of the General Insurance Corporation of India.
The total insurance package covers a range of liabilities, including the aircraft, passenger fatalities, hostel damage, and third-party claims.
While Indian insurers such as Tata AIG and New India Assurance hold under five per cent of the risk, the bulk has been transferred to major global reinsurers, including Lloyd’s of London.
“The financial burden will predominantly fall on international reinsurers, leading to the hardening of the aviation reinsurance and insurance market,” said Swarup Kumar Sahoor, senior analyst at GlobalData.
Source: Getty Images
Payouts for families of Air India victims
Under the Montreal Convention—which India is a signatory to—families of the deceased passengers are automatically entitled to Rs 1.75 crore (approximately €195,000), without requiring proof of fault.
Legal experts estimate that total passenger-related claims could reach $350 million (€305.2 million), according to Fortune.
In addition, Air India’s parent company, the Tata Group, pledged an ex-gratia payment of Rs 1 crore to each victim’s family.
Moneycontrol clarified that this is a voluntary payment and does not replace compensation mandated under international law.
Third-party claims following hostel crash
The aircraft’s impact on the hostel resulted in numerous ground casualties and significant damage to property.
Third-party liability insurance will cover these claims, but compensation is not automatic.
Families must provide death certificates, identification, and legal documents to qualify for payouts, which can face delays due to verification procedures or kinship disputes.
Compensation awards vary widely in India, with courts previously issuing settlements ranging from Rs 20 lakh to Rs 1 crore (€20,100 to €100,500), depending on individual circumstances.
Infrastructure damages to the hostel and surrounding area are also eligible under third-party coverage.
The owning institution—whether a college or trust—can file claims for repair costs, operational disruption, and market-value losses.
Rising global reinsurance costs
Although Indian insurers are administering the payouts, more than 95 per cent of the risk is reinsured abroad.
With the scale of liability triggered by this tragedy, global aviation insurers are expected to increase premiums, adding pressure to an already strained reinsurance market.
In addition to airline compensation, affected families may also be entitled to personal travel or life insurance benefits.
India’s Insurance Information Bureau (IIB) portal offers a service to help families identify policies held by deceased individuals using basic personal information.
Amount Air India's plane crash only survivor will get
Legit.ng earlier reported that Air India announced on Saturday that it would provide an interim compensation of ₹25 lakh (approximately £21,000 or €24,500) to the only survivor, a 40-year-old Ramesh Viswashkumar and next of kin of the 241 passengers who died in the Ahmedabad plane crash.
This compensation amounts to over ₦43.5 million per recipient.
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Source: Legit.ng
