Air India crash could trigger $475 million in claims; insurance cover hiked weeks before

The Air India Boeing 787-8 Dreamliner that crashed near Ahmedabad last week had its insurance cover enhanced by ₹100 crore during its April renewal, just weeks before the fatal incident. The total insurance payout from the crash, which killed 270 people, including 241 onboard, could touch $475 million (around ₹1,500 crore), according to people familiar with the matter, reported TOI.

The aircraft's cover was raised from ₹750 crore to ₹850 crore in April 2025 following an engine replacement, said sources. The aircraft was en route to London Gatwick when it went down in what is now being called the worst wide-body aircraft crash in Asia in recent years.

The bulk of the insurance burden will fall on global reinsurers, with Indian insurers expected to absorb only ₹100–150 crore of the total liability. Over 90% of the risk was reinsured with overseas firms including AIG, AXA XL and other players in the London and Bermuda markets.


The insurance policy, led by Tata AIG General Insurance, covers Air India’s entire fleet and is valued between ₹8,000 and ₹10,000 crore. The annual premium paid by Air India for this policy is reportedly around ₹250 crore. Domestic co-insurers include GIC Re, United India, Oriental Insurance, National Insurance, and ICICI Lombard.

The Dreamliner, which has been declared a total loss, was valued at ₹850 crore on an age-adjusted basis. Apart from hull loss, insurers are bracing for large passenger and third-party compensation claims. Under the Montreal Convention, families of the deceased passengers are entitled to payouts of around ₹1.7–1.8 crore each, pushing the total passenger compensation liability alone above ₹420 crore.

Experts said this tragedy could have broader implications for the aviation insurance sector, especially for wide-body aircraft operations in Asia. “This was the first major crash involving a wide-body aircraft in the region. It is likely to harden the global aviation insurance market,” one expert noted.

Meanwhile, the Insurance Regulatory and Development Authority of India (IRDAI) has issued directives to fast-track claims. In a June 14 circular, IRDAI instructed all insurers involved in the crash to submit weekly updates on claims from June 16 onwards. Insurers have also been asked to appoint nodal officers, waive formalities such as FIRs and postmortem reports, and expedite disbursals under life and personal accident policies.

With inputs from TOI