Plane crashes - insurance costs 2007-2018

In 2018, airline written premiums amounted to over 1.3 billion U.S. dollars, an increase from 1.15 billion U.S. dollars in the previous year.

Accidents in the aviation industry

According to the severity of a crash, an aircraft incident could result in hull loss or fatal accidents. An aircraft, when damaged during the flight can lead to wreckage beyond economically desirable repair. These types of accidents are considered as hull loss and accounted as a total loss for a firm. When an aircraft incident leads to fatalities, then it is considered as a fatal accident. Most of the fatal accidents also lead to hull loss, yet most of the hull losses do not result in fatalities. Striving to enhance efficiency and safety, aviation firms reduced aircraft hull losses down to 0.21 hull loss per one million flights in 2019. Loss of control was the most likely reason for a fatal aircraft accident.

Airline insurance

Although quite rare, the cost of an aircraft incident could reach over half a billion U.S. dollars. Airlines purchase insurance packages to cover potential losses, ranging from service mistakes to hull loss. Insurance coverage reduces the risks of an airline's operations. Yet insurance for airline operations is considerably costly, inducing some air transportation companies not to acquire insurance coverage. Total airline insurance by air carriers demonstrated a declining trend, indicating a lower level of insured airline operations to cover hull loss, liabilities or other activities. In 2018, the airline insurance cost for commercial aviation was over 2.9 billion U.S. dollars. On the other hand, if an unexpected event occurs, airlines open a claim to receive an insured amount with respect to the losses incurred. Between 2016 and 2020, collision or crash incidents accounted for over half of all aviation insurance claims by value, which was equivalent to nine billion U.S. dollars. During the same period, travel issues including luggage or delay composed 13 percent of the total number of aviation insurance claims globally.