The Tragic Air India Boeing 787 Dreamliner CRASH near Ahmedabad on June 12, 2025, is expected to result in insurance claims worth over ₹1,000 crore. Making it India’s largest Aviation Insurance payout to date.As per the Industry insiders,the total claim value could soar as high as ₹4,000 Crore. It includes aircraft loss as the liability claims.
According to the insurance industry, loss of an aircraft depends on its age, along with this there is also a claim for deaths of the passengers, third party damages like the doctors death, hostel and other nearby damages. You will be surprised to know that the total claim is much more than the total annual premium of India’s aviation insurance till now.
Insurance Claim Breakup: Hull Loss and Passenger Liability
Air India’s fleet is insured under a $20-billion aviation insurance programme. The policy covers both Aircraft and liability and is underwritten partly by Tata AIG, a group company, along with other Indian insurers. The reinsurance of this risk is managed by a global Re-Insurer AIG, with backing from Indian public sector insurers like New India Assurance and GIC Re. Shares of both public sector firms dropped 4% and 3% respectively following the crash.
Why the Insurance Payout is so high
The aircraft was recently insured for ₹850 crore, following an engine upgrade
Legal liability under international laws (Montreal Convention 1999) increases compensation, especially in the case of negligence.
Legal & Regulatory Implications
Minimum compensation under international aviation law: ~₹1.6 crore per victim.
Unlimited liability could apply if investigations find negligence by Air India or aircraft manufacturers like Boeing or GE Aerospace.
Investigations are being conducted by the AAIB India, U.S. NTSB, and U.K. Civil Aviation Authority.
Impact on the Aviation Insurance Industry
Expected to harden the aviation insurance market in India and globally.
Premiums are likely to rise for all Indian airlines in upcoming policy renewals.
Biggest insurance claim in Indian aviation history,
surpassing previous accidents like the Air India Express crash in 2020.
Conclusion: Financial Sector Watchers on High Alert
This crash may become a benchmark case in Indian aviation insurance history. As claim settlements proceed and legal investigations unfold, all eyes are on the outcomes—both for affected families and for the future cost of aviation insurance in India.