Ahmedabad Plane Crash: Know What Airline Insurance Covers In A Flight Emergency

Air India Dreamliner Crash: When disaster strikes while flying, airline insurance quietly moves into action. The recent Air India crash in Ahmedabad, Gujarat which claimed over 200 lives and left a trail of destruction in the Meghani area, has brought sharp focus back on a system most passengers rarely think about until something goes wrong.

The Basics: What Airline Insurance Is Meant to Cover

In any commercial aviation incident, there are three main areas of coverage under standard airline insurance:

• Hull Loss (the aircraft itself)

• Passenger Legal Liability

• Third-Party Liability

According to Sourav Biswas, Business Head, Aviation Insurance at Alliance Insurance Brokers, the total loss from this crash is estimated at $130 million—$80 million for the aircraft and about $50 million in liability claims. Since the aircraft is considered a total loss, meaning it cannot be salvaged or repaired, the entire insured sum is likely to be claimed.

What about passengers affected in such a crash?

If you are a ticketed passenger on a commercial flight, you are automatically covered under the airline’s liability policy. That coverage kicks in if someone is injured or killed during the flight. In such cases, the family can claim compensation, and this is typically regulated under global conventions like the Montreal Convention (for international travel) or similar domestic aviation rules.

"This includes medical expenses, compensation for disability or death, and even claims for destroyed or damaged baggage," Biswas says.

Clarifies Biswas: Passengers with personal travel insurance may be eligible for further benefits, including emergency medical expenses and trip disruptions. That means passengers who bought a ticket and are flying in the aircraft if they suffer any bodily injury, are reimbursable for a claim or they have the right to claim. Third-party liability means that if the aircraft damages any third-party property or individual that third-party property owner or that individual has the right to claim for the damages against the airline or the aircraft.

“As a passenger, you can get compensated for physical injury, death, of course, if I am dying my family will claim. So that is the coverage you get and there is normally regulation in place as to the minimum amount of claim taken. And it depends on whether it is a domestic flight or an international flight. Secondly, passengers also get a claim for their destroyed baggage or damaged baggage. So, these are the two coverages: passenger legal liability and the package liability which are entitled to the passengers when they fly in an aircraft.”

There’s also coverage for lost or damaged baggage, including electronics (under your own travel insurance plan if any), although the fine print here gets tricky. Insurers usually cap the payout for personal electronics at relatively low amounts, somewhere between Rs 25,000 and Rs 50,000 per item, and often require receipts or proof of ownership. Valuables like jewellery or luxury watches? Usually excluded unless specifically declared and insured in advance.

What about losses on the ground?

The Air India aircraft did not just crash, it also hit residential quarters housing doctors from BJ Medical College. This brings third-party liability into focus. If the aircraft damages any property or injures someone on the ground, the airline’s insurance policy steps in.

When an aircraft causes damage or injury outside the airport or mid-air (during an emergency landing, for instance), affected individuals or families can file claims against the airline’s insurance under this clause. These claims are assessed carefully and tend to be time-consuming, given the scale of damage often involved.

These claims can be significant, and insurers conduct a thorough investigation before settling. Moreover, in densely populated urban crash zones, such as the one in Ahmedabad, third-party claims can rival those of the passengers onboard.

Baggage, Valuables, and Documents: What’s Included?

Baggage destroyed in a crash is typically covered under airline insurance. But personal valuables like jewellery, watches, or expensive electronics are often excluded unless specifically declared beforehand. Even then, the payout is limited.

Important documents such as passports or IDs are only reimbursed for re-issuance costs, not for delays or logistical problems caused by their loss.

Personal Travel Insurance Helps, But It’s Optional

Beyond what the airline is obligated to cover, passengers who have taken out individual travel insurance, either through their credit card, company or separately, often have a better shot at faster and broader assistance.

These personal policies typically cover:

• Emergency medical treatment (in-flight or after landing)

• Hospitalisation abroad

• Emergency evacuation

• Trip delays or cancellations

• Repatriation of remains in the event of death

Biswas points out that in emergency scenarios, like when a passenger falls seriously ill mid-flight or the plane needs to divert, coordination between airline teams and the insurance provider can make a big difference.

No One Wants to Think About It, But It Matters

Passengers should remember that having an active policy is the key. Says Biswas, “While airline liability policies cover all passengers, personal travel insurance ensures faster access to medical help and broader benefits, especially abroad.”

Most people don’t read the fine print of what they are covered for when they fly. Some don't even know if they are covered at all. But as the Air India crash shows, these policies are not just technical formalities, they are financial and logistical lifelines in the worst-case scenario.

For families of the deceased, that support will now play out in slow, often painful stages, document collection, formal claims, and long waits. Airlines typically activate dedicated response units to help families through the process, but the experience is rarely smooth.

Still, it is these under-the-radar insurance mechanisms that help pick up the pieces when aviation accidents occur, whether that is rebuilding property on the ground or helping a grieving family navigate a system they never expected to encounter.