With the search for missing Malaysia Airlines Flight MH370 stretching into its third week with no concrete leads as to its whereabouts, insurers are preparing to pay the airline for the loss of the jetliner.
The lead insurer for MAS, Allianz Global Corporate & Specialty, has already placed a payment of GBP67 million (RM365.5 million) in an escrow account, according to UK daily The Telegraph.
The paper also reported that Allianz will provide hardship payments for the families of the 227 passengers on board Flight MH370 to help them cope with current expenses.
The payment is in accordance with standard air travel policy – and the assumption that a plane is destroyed if it goes missing for more than two days.
According to the report, Allianz is not the only insurer involved, as Malaysia Airlines’ policy has been reinsured by several other international companies.
While millions could be paid out to the families of the passengers, insurers are keeping close watch on the SAR operations, as terrorism or negligence could modify the amount they would need to pay.
Lawyers have advised family members to seek legal advice before signing documents for compensation from airlines and their insurers.
At a minimum, the Montreal Convention – an international aviation treaty – allows the next-of-kin of the plane’s 227 passengers to seek up to USD175,000 (RM573,475) each without proving any fault with Malaysia Airlines.
Story: The Malay Mail
