India is facing its largest-ever aviation insurance payout following the country’s deadliest plane crash in over a decade, which killed 241 people and caused widespread devastation in Ahmedabad. The total claim is expected to reach approximately $475 million (₹39.4 billion), making it one of the costliest incidents in Indian aviation history.
According to Ramaswamy Narayanan, Chairman and Managing Director of the General Insurance Corporation of India, the insurance payout includes $125 million for the destroyed aircraft’s hull and engines, with an estimated $350 million earmarked for liability claims covering passenger deaths, crew, and third-party damages. The liability portion also includes compensation for individuals affected on the ground and will be governed by international frameworks such as the Montreal Convention, which allows for unlimited compensation in cases of proven airline negligence.
The claim far exceeds India’s annual aviation insurance premium collections and will heavily impact the global reinsurance market, as over 95% of India’s aviation risk is reinsured by international firms. The presence of foreign nationals among the deceased could further increase liability, as compensation must align with their home countries’ legal standards.
Insurance companies have already established settlement camps on-site in Ahmedabad to assist victims’ families and expedite the claims process. However, the financial aftershock of this disaster is expected to ripple across the global aviation insurance sector. Experts anticipate that Indian airlines will face higher premiums and stricter terms in future policy renewals, as the market hardens in response to the sheer scale of the claim.
This tragic incident is not only a profound human loss but also a pivotal moment for aviation risk management in India, prompting calls for stricter oversight and industry-wide reforms.