How insurance payouts to air crash victims are determined

Air India, following international aviation protocols, is set to compensate the families of air crash victims through its insurance providers. Each deceased passenger's family will receive 1,28,821 Special Drawing Rights (SDRs), a type of international monetary reserve currency created by the International Monetary Fund (IMF) to supplement its member countries' official reserves. The use of SDRs in such compensations ensures a standardized approach, providing a consistent value irrespective of fluctuations in individual national currencies. The current exchange rate plays a crucial role in determining the exact payout in local currency, as SDR values fluctuate based on a basket of major world currencies, including the US dollar, euro, Chinese yuan, Japanese yen, and British pound. This method allows for fair compensation aligned with global economic conditions, offering a level of predictability and security to the bereaved families navigating through tragic times. The conversion process ensures that victims’ families receive an equitable settlement reflective of the current financial landscape. Insurance payouts in air crash incidents are guided by international conventions, such as the Montreal Convention, which outlines the liabilities and compensation limits for airlines. These agreements standardize the compensation framework, ensuring that airlines adhere to a globally accepted system, thereby facilitating faster resolution and support for the victims' families. This structured approach underscores the importance of international cooperation in addressing the financial aftermath of such tragic events, aiming to provide timely relief to those affected.

— Authored by Next24 Live