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Aviation Insurance: Hull Cover and the Montreal Convention
Aviation insurance helps pay for aircraft damage and legal claims after an aviation event. Different policies cover different losses. The Montreal Convention sets many airline liability rules for international flights. It is not itself an insurance policy.
A passenger’s proven injury claim differs from a claim for the damaged aircraft. This distinction matters after an accident.
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Timeline: treaty and revised limits
1929–2009: from Warsaw to Montreal
The 1929 Warsaw Convention began a common system for international airline claims. The 1999 Montreal Convention updated it. Montreal entered into force on 4 November 2003.
International Civil Aviation Organization (ICAO) records show India joined on 1 May 2009. It took effect for India on 30 June 2009. India’s Carriage by Air Act, 1972, as amended, gives it domestic legal effect.
2024: inflation review changed the figures
ICAO revised the Convention limits effective 28 December 2024. The first passenger death-or-injury tier rose to 151,880 Special Drawing Rights (SDRs). An SDR is an International Monetary Fund unit. Its currency value changes with exchange rates.
These are liability rules, not an insurance sum automatically paid to each person. See ICAO’s revised table and the IMF’s SDR guide.
QUICK CHECK 1 OF 6 · TRUE OR FALSE
Did the Montreal Convention take effect for India in 2009?
ICAO records show India joined in May 2009. The Convention entered into force for India in June 2009.
Show answer
True. ICAO records show India joined in May 2009. The Convention entered into force for India in June 2009.
Must Know: insurance cover
1. Match the cover to the loss
| Cover | Main loss | Simple example |
|---|---|---|
| Hull all-risks | Accidental physical damage to the aircraft, subject to policy terms. | A wing is damaged on the ground. |
| Hull war | Specified hostile acts often excluded from ordinary hull cover. | War or malicious damage destroys an aircraft. |
| Passenger liability | Legal claims for passenger death or bodily injury. | A passenger is injured in an accident. |
| Baggage and cargo liability | Legal claims for loss, damage, or delay. | Checked bags are lost. |
| Third-party liability | Harm to people or property outside the aircraft. | An aircraft damages a building. |
Policies may also cover spares and airline operations. A deductible is the part the insured airline pays first. Terms can exclude wear, certain war acts, or other losses. Read the exact policy.
A lender or aircraft lessor may be named in the policy. It wants its financial interest protected. Insurers often buy reinsurance to share very large claims.
Case: a storm on the ground. Hail hits a parked plane. The wing needs repair. The airline reports the loss to its hull insurer. The insurer checks the cause and the repair bill. The airline may pay a first share under its deductible. No passenger injury claim follows from this damage alone.
ICAO’s insurance paper separates hull and liability risks. An International Air Transport Association guide describes aircraft damage cover.
2. Law and insurance do different jobs
The Montreal Convention asks when and how much a carrier owes. Liability insurance helps the carrier fund a covered legal claim. Hull insurance pays for aircraft damage under its own contract. The Convention does not pay for the aircraft.
Article 50 requires carriers to keep adequate liability insurance. India’s aviation requirements also call for cover for passengers, baggage, crew, cargo, hull, and third-party risks. See the Directorate General of Civil Aviation requirement.
QUICK CHECK 2 OF 6 · TRUE OR FALSE
Does hull insurance itself pay a passenger’s injury claim?
Hull cover concerns the aircraft. Passenger liability cover concerns the carrier’s legal duty to an injured passenger.
Show answer
False. Hull cover concerns the aircraft. Passenger liability cover concerns the carrier’s legal duty to an injured passenger.
Good to Know: passenger claims
1. Two tiers for death or bodily injury
The claimant must show an accident on board, or while embarking or disembarking. The claimant must also prove the damage. Under the first tier, the carrier cannot avoid liability by saying it was careful. The current boundary is 151,880 SDR per passenger.
This is not a flat payout. Proven damage may be lower. Article 20 can also reduce liability when the passenger’s own fault caused or added to the harm.
For proven damage above that boundary, the second tier has no fixed ceiling. The carrier can defend itself. It must prove that it was not negligent, or that a third party alone caused the damage.
Case: a hurt passenger. A sudden event hurts a person on board. The person keeps the ticket and care records. They show the harm and its cost. They need not prove fault for the first tier. If they seek more, the carrier may raise a second-tier defence.
ICAO’s treaty guide explains both tiers. A public offer by an airline and a court’s final award are separate matters.
2. Other claims have different rules
| Claim | ICAO limit from 28 December 2024 | Key point |
|---|---|---|
| Passenger delay | 6,303 SDR per passenger | Prove loss from delay; the carrier has an Article 19 defence. |
| Baggage | 1,519 SDR per passenger | Checked and unchecked baggage have different fault rules. |
| Cargo | 26 SDR per kilogram | Special declarations can change the normal limit. |
These figures are ceilings for ordinary claims, not automatic payments. Different Convention exceptions may apply. Declared-value arrangements can raise a baggage or cargo limit.
A passenger’s personal travel policy is separate. It may pay benefits under its own terms. It does not replace the carrier’s legal duties.
Case: a lost bag. Keep the bag tag and report the loss at the airport. List what was inside and show proof where you can. The bag limit is not a cash gift. It sets the usual top sum for a valid claim.
QUICK CHECK 3 OF 6 · TRUE OR FALSE
Does 151,880 SDR mean every family automatically receives that exact amount?
The claimant must prove damage. The figure marks the first tier, and the claimant’s own fault may reduce liability.
Show answer
False. The claimant must prove damage. The figure marks the first tier, and the claimant’s own fault may reduce liability.
Great to Know: claim route and limits
1. What happens after an event?
An accident investigator asks why an event happened. An insurer checks policy cover. A court or settlement process decides contested liability. Their findings serve different purposes.
For a damaged aircraft, an adjuster checks repair cost or total loss. The deductible and exclusions matter. For a passenger claim, the carrier checks treaty scope and proven damage. Reinsurers may then repay part of the insurer’s loss.
What should a claimant save? Keep the ticket, bag tag, bills, care notes, and emails. Write down when and where the loss took place. Tell the airline soon. Ask for a case number. Keep a copy of each form you send. These steps help show what happened and what the loss cost. They do not by themselves prove fault. Fault may not even be the key test for a first-tier claim.
The airline may offer an early sum. Ask what it covers before you sign. A first offer need not end all claims. The answer depends on the paper you sign and the law that applies.
2. Where the Convention applies
The Convention chiefly governs international carriage between places in States Parties. Some return journeys with a foreign stop also qualify. It governs carrier claims for passengers, baggage, and cargo. It does not itself set compensation for people on the ground.
India’s Carriage by Air Act also has a Third Schedule for non-international carriage. Check that schedule and the ticket for a domestic flight. Do not assume every domestic claim is identical to an international one.
The Convention allows several court locations. A fifth forum can apply to passenger death or injury when residence and carrier-presence conditions are met. Article 35 sets a two-year period to bring an action. Legal advice matters in a real claim.
Exam trap: the first-tier boundary is not the maximum for every passenger case. Further proven damages may be due under the second tier.
3. War cover and grounded aircraft
Ordinary hull cover may exclude war, terrorism, and related acts. Airlines can buy separate hull-war and war-liability cover. Wording varies by policy.
Grounding alone does not prove an insured loss. The cause, trigger, and exclusions decide. A crash, a government order, and normal wear can produce different insurance outcomes.
For example, a jet may sit idle for weeks after a safety check. Lost ticket sales do not become a hull claim just because the jet did not fly. The airline must point to a policy term that pays for that kind of loss.
Think it through. A passenger has a valid injury claim, and the aircraft is badly damaged. Why might two insurance covers respond?
Show the explanation
Passenger liability cover addresses the carrier’s legal claim. Hull cover addresses physical damage to the aircraft. Each policy has its own terms.
Current Affairs: a real claim setting
Air India Flight AI171, June 2025
Flight AI171 was bound from Ahmedabad to London on 12 June 2025. It crashed shortly after take-off. The Aircraft Accident Investigation Bureau’s preliminary report records early facts. It does not determine civil compensation.
This international route makes Montreal’s passenger rules relevant. A claimant must still prove the covered loss. A separate policy may respond to the aircraft’s hull loss. Harm to people on the ground raises other liability questions.
As of June 2026, the Bureau said it had released a preliminary report. Its anniversary statement described the investigation as continuing. Avoid treating early findings as final fault findings.
Earlier reporting: LiveLaw’s legal overview and Outlook Business’s review. The treaty and official investigation records above support this lesson’s rules and case facts.
QUICK CHECK 4 OF 6 · TRUE OR FALSE
Does a safety investigation report itself set each family’s legal compensation?
Investigators examine causes and safety lessons. Claims follow the Convention, law, evidence, and policy terms.
Show answer
False. Investigators examine causes and safety lessons. Claims follow the Convention, law, evidence, and policy terms.
QUICK CHECK 5 OF 6 · TRUE OR FALSE
Can a carrier face proven passenger damages above the first-tier boundary?
The second tier has no preset ceiling. The carrier may avoid extra liability only by proving a permitted defence.
Show answer
True. The second tier has no preset ceiling. The carrier may avoid extra liability only by proving a permitted defence.
QUICK CHECK 6 OF 6 · TRUE OR FALSE
Does the Montreal Convention itself cover a damaged aircraft hull?
The Convention governs specified carrier liabilities. Hull insurance covers aircraft damage under a separate policy.
Show answer
False. The Convention governs specified carrier liabilities. Hull insurance covers aircraft damage under a separate policy.
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