Ahmedabad air tragedy: India set for largest-ever insurance payout after Air India crash

In what is expected to be the biggest insurance claim in Indian aviation history, Air India is likely to receive a compensation between Rs 1,000 crore to Rs 2,400 crore following the tragic crash of Flight AI-171 near Ahmedabad on June 12, 2025. This unprecedented payout includes multiple components covering the aircraft’s loss, passenger compensation, third-party liabilities, and damage to nearby structures.

Also Read:The mystery of seat 11A: Two crashes, two survivors, one incredible coincidence

Industry insiders estimate that the hull loss of the aircraft alone may amount to Rs 665 crore to Rs 965 crore, depending on the final valuation of the Boeing aircraft involved in the incident. Additionally, insurance compensation for the 241 passengers who tragically lost their lives could range from Rs 377 crore to Rs 434 crore, based on international passenger insurance norms.

What makes this claim more complex and expansive is the third-party coverage involved. The crash also severely damaged a nearby medical hostel building, which led to additional casualties and infrastructure loss. Insurance compensation will also extend to those affected in this facility, covering death benefits for the students who died, as well as treatment and relief for the injured.

Experts believe this payout will surpass all previous aviation-related insurance disbursements in India, highlighting the wide-ranging financial impact of the disaster. While the official settlement will take time as insurers conduct detailed evaluations, this claim is likely to reset benchmarks for aviation insurance in the country.