Why AirAsia insurance payouts could vary

Scott Tong Dec 30, 2014
HTML EMBED:
COPY

Why AirAsia insurance payouts could vary

Scott Tong Dec 30, 2014
HTML EMBED:
COPY

The CEO of AirAsia today pledged compensation for the persons aboard flight 8501, but the amount that families of the deceased will receive could vary widely.

Indonesia has not signed the newest aviation convention setting updated payouts for deadly air disasters, so if a person’s ticket starts and ends in Indonesia – where the flight took off from – the grieving family could receive less.

In reality, airlines can pay what they see fit. Very often, they make initial payouts within the first two weeks to cover funeral and other up-front family expenses.

Robert Jensen, of Kenyon International Emergency Services, says most airlines have agreed to a minimum payment, typically about $25,000. He advises a follow-up payout of at least $175,000. Insurance companies may not pay up, but the airlines should, he says.

“You take care of the people and the bottom line is always enhanced,” he says.

Moreover, the alternative could be costly litigation.

 

There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.