While the families of the passengers on Air India’s London-bound AI 171 that crashed last week, and those killed or injured on the ground, will get compensation from the liability part of the airline’s insurance policy, it can take up to two years to receive the money, explains Saikat Neogi
l Compensation for the passengers
THE AIRLINE LIABILITY coverage framework of the Montreal Convention of 1999, to which India became a signatory in 2009, ensures compensation for injuries or death of passengers in an international flight due to any air disaster. Air India, through its insurers, will pay 1,28,821 Special Drawing Rights (SDRs) per deceased passenger. At the current exchange rate, one SDR equals Rs 120. The compensation thus works out to about Rs 1.5 crore. However, to receive any amount beyond the fixed SDR compensation, the family members will have to establish in a court that it was the airline’s fault that led to the crash. As crew members and pilots are not covered under the Montreal Convention’s liability coverage, their families will have to seek compensation under Air India’s employment contracts. Apart from this, the Tata Group has announced Rs 1 crore in ex gratia compensation for the families of each person who lost his life in the crash, including those killed on the ground. Air India will also provide an interim payment of Rs 25 lakh each to the families of the deceased and to the survivor, to help address immediate financial needs.
l Process to get the insurance payout
CLAIMS CAN BE filed by the legal heir of the deceased by providing a death certificate, proof of ticket, a nominee certificate, or a legal heirship certificate issued by a competent court. It will be processed by the airline’s claims department and settled through its aviation liability insurers. The insurers will appoint a loss adjuster, who will communicate between the nominee or legal heir, the insurers and others involved in the claim. “If the compensation amount received by the family is not acceptable, it can file civil lawsuit, which will allow the court to determine the additional compensation,” says Amit Agarwal, CEO & MD, Howden India. Airlines are encouraged by the Montreal Convention to settle all claims within two years. However, any disputes regarding the final payout may take longer to settle.
l Other benefit-based insurance policies
WHILE THE MONTREAL Convention will cover all passengers, the families can also file claims if the deceased had life insurance, travel insurance or credit card-linked accident insurance policies. They will be eligible for the sum assured as set out in the respective policies, and the claims settlement will be faster for such covers. Each policy has specific rules for compensation, and the nominee must provide a death certificate, proof of flight boarding, and documentation confirming their legal status (nominee or heir). Claims are subject to verification and may also require a court decree, depending on the situation. Only if there are medical costs that are to be claimed, then the rule of contribution applies, where the collective payout will not exceed the actual costs incurred.
l Third-party liability for people on the ground
THE AIRCRAFT CRASHED into a medical college campus, causing additional fatalities on the ground. The families of the injured and the deceased and even the property owners, have the right to claim compensation from the airline under the third-party liability cover. “It ensures that the affected people on the ground have legal recourse and financial support,” says Sourav Biswas, business head, Aviation Insurance, Alliance Insurance Brokers. The nominee will have to make a liability claim against the airline for his loss. Air India’s liability insurance policies will then step in to cover the compensation, subject to investigation and legal procedures to determine the extent of loss. Claim can be filed for an unlimited amount based on the earning potential of the deceased, but the insurer will decide on the payout. In case of a dispute, the legal heir can go to a court. The Tata Group has assured that it will bear all medical costs of the injured.
l Fast-tracking of claims
THE INSURANCE REGULATORY and Development Authority of India has told insurers to accelerate and ease the claims settlement for the claimants of the ill-fated airline. To fast-track claims, it has mandated insurers to obtain the authentication list of victims of the crash from authorities, verify the details as available in the databases of companies that issued mandatory overseas medical insurance policies, as well as personal accident policies and life insurance policies. Post-mortem reports or first information report from the police will not be required where official confirmation of the victims is available. It has also directed the Life Insurance Council and General Insurance Council to set up a dedicated joint cell near the hospital where the BJ Medical College victims are being treated to assist with health and life insurance policies. The regulator has asked insurers to submit a report every week from June 16 and publish claims settlement data on their websites. The regulator has underlined that no claim should be denied or delayed on account of procedural formalities.