Flight accident insurance coverage FAQs: All you need to know

The tragic Air India flight AI 171 crash in Ahmedabad took away over 200 lives of not only the passengers and crew inside the plane but also many others on the ground at the crash site.

The incident has put the spotlight on insurance remedies available to victims of a flight accident and their families or nominees. This article explains various Frequently Asked Questions (FAQs) around flight accident insurance.

In a plane crash resulting in the death of travellers, multiple layers of insurance and compensation packages can come into play. Some of them are as follows:

• Aviation insurance
• Travel/flight accident insurance
• Life insurance
• Personal accident insurance
• Credit card-linked travel insurance
• Employer's insurance
• Ex-gratia payment by the government/airline

While compensation through aviation insurance, as per the Montreal Convention, is mandatory, other insurance will depend on the individual traveller's policies. Read more about the above in the following FAQs.

Aviation companies like Air India generally maintain a comprehensive fleet-level aviation insurance policy. These policies cover physical damages to the plane as well as passenger, third-party, cargo, and crew members' liabilities.

The compensation to families/legal heirs of deceased passengers in an international plane crash is governed by the Airline Liability coverage framework of the Montreal Convention, 1999. India became a signatory to this convention in 1999.

SDR is like international money created by the International Monetary Fund (IMF). One SDR is equal to ₹120. Thus, the total compensation per passenger in the Air India crash works out to be around ₹1.5 crore.

In case family members are not satisfied with the compensation, they may move the court. But they will need to establish that the crash was due to the airline's fault.

The Montreal Convention covers only the passengers on an international flight. Families of deceased crew members and pilots in a plane crash can seek compensation through the airline's employment contracts.

In case of a domestic plane crash, compensation to victims is governed by the Indian aviation laws. And the airline's insurance policy provides compensation to families of the deceased passengers.

As per the Montreal Convention, airlines have to settle all claims within two years. However, a dispute may prolong the claims settlement.

The airline's claims department will process the claim, and it will be settled through the airline's aviation liability insurers.

Yes, families of victims on the ground, including property owners, can claim compensation from the airline under the third-party liability cover. They may file a claim for an unlimited amount depending on the earning potential of the victim, by the final compensation will be decided by the insurer. However, legal heirs can move to court if they are not satisfied with the compensation.

Flight accident insurance is generally offered as part of a travel insurance plan. Some insurers may also offer flight accident insurance as an add-on. Travellers can buy this insurance on their own, ideally before boarding a flight.

In India, some examples of travel insurance that also covers flight accidents are the following:

• Tata AIG Travel Insurance
• Niva Bupa Travel Insurance
• ICICI Lombard Travel Insurance
• Bajaj Allianz Travel Insurance
• Care Travel Insurance
• Reliance Travel Insurance.

Apart from the above, there are many other insurers that offer travel insurance plans.

These policies typically offer a lump sum payout due to death or disability resulting from a flight accident. They also provide coverage for hospitalisation and treatment following a flight accident. Some travel policies also cover emergency evacuation, for example transportation to the nearest medical facility if required after a flight accident.

Travel insurance not only covers flight accidents but also has several other features. You must read the policy document carefully before paying the premium. It is also recommended to compare multiple policies before buying one. You should ensure that the policy covers everything that you need for travelling peacefully.

Legal heirs/families of the deceased can file for claims by providing a death certificate, proof of ticket and flight boarding, a nominee certificate, or a legal heirs certificate issued by a competent court.

Families/legal heirs of deceased victims in a plane crash can file life insurance claims, personal accident insurance claims, and credit-card-linked travel insurance claims. However, it will depend on whether the victim had these policies or not.

Credit card-linked travel policies are generally offered when buying a flight ticket with a credit card. Life insurance and personal accident covers can be purchased by anyone at any time.

Generally, business travellers are covered by their employer's insurance.

Ex gratia payment by the government is rare in the case of a plane crash. Airlines generally announce such payments in case of a plane crash. For instance, Air India has announced a ₹1 crore ex gratia payment to families of each deceased passenger.

Before boarding a flight, travellers should share their boarding pass and tickets as well as all insurance-related documents with their family. It is also required to have adequate travel insurance coverage. These policies come at a very low cost but can prove to be very helpful in case of a mishap.