✈️ Air India AI-171 Crash: ₹100 Cr Insurance Top-Up Before Accident, Claims May Reach ₹1,500 Crore
In a shocking development related to the Air India AI-171 plane crash, it has emerged that the airline had raised the insurance coverage by ₹100 crore in April 2025, just weeks before the tragic accident occurred. According to industry insiders and a report published this week, total insurance claims could reach up to ₹1,500 crore, making it one of the costliest aviation insurance events in India.
📰 What Happened?
Flight AI-171, operating under Air India’s international division, crashed during a routine operation, resulting in significant damage to the aircraft and injuries to passengers and crew.
The aircraft involved was a Boeing 787 Dreamliner, one of the flagship models in Air India’s fleet.
Initial investigations point to a possible technical malfunction, though official causes are still under review by aviation regulators.
📈 Insurance Cover Details
Insurance Provider: A consortium led by international and Indian underwriters
Pre-April 2025 Coverage: Approx. ₹2,000 crore
Post-Increase in April: Coverage extended to ₹2,100 crore
Estimated Claims Now: Could reach ₹1,500 crore, according to industry sources
This move to increase the cover just weeks before the crash has raised eyebrows and could lead to increased scrutiny from reinsurers and the Directorate General of Civil Aviation (DGCA).
💰 Why Such a High Claim Value?
Aircraft damage: Replacement of a Boeing 787 can cost ₹1,100–₹1,300 crore.
Passenger claims: Compensation for injuries and loss of life.
Operational disruption: Grounding of flights, re-routing costs, brand damage
Legal fees and third-party liability
🧾 Implications for Air India and the Aviation Sector
Premiums likely to rise: Indian airlines may face higher premiums in upcoming renewals.
Underwriter concerns: Global reinsurers will closely examine Indian aviation risks.
Government involvement: Given that Air India is now under the Tata Group, regulatory oversight is expected.
❓ FAQs: Air India AI-171 Crash and Insurance Claim
Q1: When did Air India increase the insurance coverage for AI-171?
A: According to reports, the insurance coverage was increased by ₹100 crore in April 2025, just before the crash.
Q2: What is the estimated claim amount for this crash?
A: Industry sources estimate total claims could reach up to ₹1,500 crore, including aircraft replacement and passenger compensations.
Q3: Is it common to increase aviation insurance shortly before an incident?
A: While routine insurance reviews are standard, such timing will likely be reviewed thoroughly by regulators and insurers.
Q4: Will this impact Air India’s future operations or financials?
A: The insurance is expected to cover most of the losses, but reputational and operational impacts could still affect Air India in the short term.
Q5: Who pays the claim in such cases?
A: A consortium of insurers and reinsurers will process the claim, with global and domestic players sharing the risk.
📌 Conclusion
The Air India AI-171 crash has triggered a complex web of insurance and regulatory implications, especially since the airline had increased its insurance coverage so recently. As investigations continue, industry experts anticipate heightened scrutiny in aviation underwriting, especially in high-risk sectors like long-haul international routes.
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Reported by Benny on June 17, 2025.