AI crash likely to generate Rs 400-cr claims

The Air India Express flight 812 flying in from Dubai which crashed on Saturday while landing at Mangalore’s “table top” airport surrounded by deep gorges is expected to generate insurance claims worth over Rs 400 crore.

The insurers—led by Anil Ambani’s Reliance General which had bagged the AI account for the first time in 2009-10 and reinsurers—led by Japanese Mitsui-have already swung in to action to assess the losses and settle claim quickly as possible.

Coincidentally AI’s UK-based surveyor for last 20 years Charles Taylor Adjuster is in Mumbai when the crash happened and has proceeded to Mangalore to begin the survey of the losses. Industry sources pointed that the claims out of the human tragedies would be around Rs 125 crore while for the aircraft the claim can be around Rs 225 crore. The aircraft which had crashed was new and had been acquired by AI at the end of 2007.

Each passenger who has lost his/her life is entitled to receive a minimum of Rs 75 lakh which can rise if the family members of the passengers prefer to go the court of law demanding higher compensations.

The flight was an international one and since India is signatory of Montreal Convention (in 2008) which fixes compensation for death or bodily injury of any passenger(traveling in an international flight ) over Rs 75 lakh.

Montreal Convention had increased the compensation for death or bodily injury by seven times from the earlier levels of $20000 to $ 1,40,000 . Similarly the compensation for damage to the checked baggage was also hiked from $ 20 per kg approximately to $ 1400 per passenger. The compensation for damage to cargo also was raised from $ 20 per kg approximately to $ 24 per kg.

“As a policy, we do not comment on individual policy details or specific customer claims”, said a Reliance General spokesperson. Reliance general consortium had paid total $ 25 million for AI’s cover out of which $ 20 million was for the aircraft and passengers’ liabilities.

Speaking to FE, S Narayanan, managing director & CEO, IFFCO-Tokio General Insurance, which along with three other general insurers –Reliance General Insurance, HDFC Ergo General Insurance, Bajaja Allianz General Insurance had participated in providing the insurance cover to Air India said, “I don’t think that too much of time will be taken by the consortium while settling the claims as it will be done on-account payment or...