Mumbai, June 13: Post-midnight on Friday, June 13, Air India confirmed that a total of 241 people onboard the Boeing 787-8, Air India flight AI171, died in the deadly Ahmedabad plane crash. The list of 241 dead includes 229 passengers and 12 crew members. In what can be said to be a miraculous escape, one passenger, a British national of Indian origin, survived the deadly crash. He was later identified as Ramesh Vishwaskumar Bucharvada. Amid this, the Air India Flight AI171 crash incident is likely to trigger India's costliest aviation insurance claim ever, possibly crossing over INR 1,000 crore. This development comes after the Tata Group announced a compensation of INR 1 crore each for the families of those who lost their lives in the tragic London-bound Air India plane crash.

What Are Experts Saying About Insurance Claims?

Besides covering the medical expenses of those injured, Tata Group, which owns Air India, said that it will provide INR 1 crore to the families of each person who has lost their life in the tragedy. The insurance claim, which is likely to be over INR 1,000 crore, is expected to cause a storm in the aviation insurance industry. According to experts, the insurance payout for the Air India flight AI171 passengers, which crashed in Ahmedabad, is most likely to be governed by the Montreal Convention. It must be noted that India is also a part of the convention under which the nationality of the passengers onboard the crashed plane will define the minimum liability. Ahmedabad Plane Crash: Tata Group to Give Rs 1 Crore Each to Victims' Families.

Tata Group to Give INR 1 Crore Each to Victims' Families

Although Tata-owned Air India has announced a compensation of INR 1 crore each to victims' families, the final compensation for the Ahmedabad plane crash passengers will be determined under the Montreal Convention of 1999, to which India became a signatory in 2009. So, how will the compensation be calculated? Amit Agarwal, MD and CEO of brokerage firm Howden (India), said, "Compensation is calculated using Special Drawing Rights (SDRs), which stood at 128,821 SDRs (approximately USD 1.33 per SDR) as of October 2024." Agarwal further said that the actual payout will depend on the coverage purchased by Air India.

Air India Aircraft Which Crashed in Ahmedabad Insured for USD 115 Million in 2021

Speaking about the Air India aircraft (Air India flight AI171), Amit Agarwal said that the aircraft damage will be covered under the aviation hull all-risk section, which has insured the current valuation of the aircraft, including spares and equipment. He further said that for a Dreamliner, the value of the aircraft damage can range between USD 211 million and USD 280 million, depending on factors such as configuration, age, among other things. As per the expert, the Air India aircraft (VT-ABN), which was involved in the crash, was a 2013 model. Agarwal said the aircraft was insured for approximately USD 115 million in 2021. Air India Flight AI171 Crash: 2 Manipuri Crew Members Kongbrailatpam Nganthoi Sharma and Lamnunthem Singson of London-Bound Flight Killed in Ahmedabad Plane Crash (See Pics).

He also said that the loss would be covered based on the value declared by the airline, whether the damage is partial or total. Narendra Bharindwal, president, Insurance Brokers Association of India (IBAI), said that aviation insurance programmes for airlines such as Air India are arranged on a fleet basis. He further said that these fleets are reinsured across international markets like London and New York. "No single insurer bears the entire risk - coverage is widely distributed among global reinsurers, with shares as small as 1.5 per cent to 2 per cent and a lead reinsurer typically taking 10-15 per cent. The financial impact of such incidents is shared globally across this network," Bharindwal added.

Insurance Split Into 2 Parts – Hull Insurance and Liability Insurance

According to reports, Air India has insured its entire fleet under a massive USD 20 billion global aviation insurance programme. However, the insurance is split into two parts, one for damage to the aircraft, called "hull insurance", and the other for legal and passenger claims, also called "liability insurance". The cost of the Boeing Dreamliner, which crashed in Ahmedabad, is estimated to be between USD 211 million and USD 280 million (Translating to INR 2,400 crore). That said, insurance experts believe the real financial impact will come from liability claims, which will include compensation to the families of the passengers who died in the crash and other damages on the ground where the Air India plane crashed.

(The above story first appeared on LatestLY on Jun 13, 2025 01:01 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).