Answer
This Financial Assignment focuses on a highly debated question relating to airline accident victim compensation. The assignment investigated who is responsible for compensating airline accident victims as well as which family members are entitled to receiving compensation. Airlines Accidents tend to claim the smallest number of human lives as compared to other forms of transport but they also tend to be the most high profile and intensely covered by Media. Airline accidents also award higher compensation to the victims and their families as compared to other modes of transport. This has raised controversy regarding whether airline accident victim families are entitled to compensation for the accidents and the amount of compensation they should be awarded (Wang, Hofer, & Dresner, 2013). To better understand the situation, we would break down the scenario on this Financial Assignment into two sections and discuss each section individually before bringing together the findings to deliver a final verdict.
Who is Responsible for Causing Airline Accidents?
An accident is defined as an unplanned event leading to disaster, injury or death; they are not planned for thus classified as Accidents. Either way, airline accidents are closely investigated to determine the cause of the accident, due to air travel accidents being classified as high profile and attracting a lot of attention (Liou, Yen, & Tzeng, 2008). While performing research for this Financial Assignment it was identified that recent years have registered a rising number of smaller airlines and commuter flights which have also led to more accidents but few of the smaller aircraft accidents are covered by the media. It has also led to commuter and small airline accident compensation is less than that awarded by international commercial airlines. The Financial Assignment clearly identified there is a certain level of bias towards airline accident coverage and compensation which is a serious concern that must be addressed.
Who should be held responsible for airline accidents?
To understand guilty and faulty parties the Financial Assignment research identifies it as being important to first perform an in-depth investigation to identify the cause of the accident. Only after the investigation has been completed should the responsible parties be held accountable and made to pay compensation to the airline as well as the accident victims. Causes of airline accidents could include one or more of the following factors: pilot error, equipment failure, violations of FAA regulations and guidelines, aircraft structure and design failure, Flight Service Station employee negligence, Air traffic Controller Negligence & Terrorism (Szeremeta, Janica, Niemcunowicz-Janica, & Pepinski, 2013).
Each of the above reasons and factors identified on the Financial Assignment can result in causing an airline accident thus requiring each factor to be investigated and thoroughly assessed to determine the airline accidents cause. After the cause of the accident has been identified, responsible departments and personnel can be questioned for the accident and the appropriate action is taken (Dupont, Martensen, Papadimitriou, & Yannis, 2010). In certain situation, the cause of an airline accident is associated with terrorism thus making it important for airline compensation to be an independent entity which does not expect compensation from the responsible parties. Doing this would result in seriously hampering airline accident victim compensation since it's not always possible to secure compensation from the parties responsible for causing an accident. This Financial Assignment also identified non formal causes such as terrorism which may result in air crashes thus raising a question to who would be liable to make compensations for such airline crashes (Goldman, 2010).
Should Families Of Airline Victims Be Entitled To Compensation?
This Financial Assignment classifies Airline Accident compensation as being as important as any other form of accident compensation and must be awarded to the victim's next of kin or family (Spearing, Connelly, Gargett, & Sterling, 2012). For a bystander awarding accident compensation to family members and next of kin may seem unfair since they receive financial benefits from an accident or a person's death. But it's not as simple as many people think since there is a process which is followed to claim the airline accident compensation. The compensation claiming process usually involves consulting the beneficiaries and other close family members who are directly linked to caring for the victim's dependents.
As per research performed during this Financial Assignment, accident compensation is meant to provide financial relief to dependents who may have relied on the victim to support their daily needs and expenses (Thakor, 2012). The accident would leave the family and dependents extremely venerable thus making it important for the family to receive financial compensation for injuries or death which could have occurred as a result of an airline accident. Airline accident compensation is similar to car accident compensation thus it's not fair to consider questioning airline accident compensation rights just due to air travel compensation being higher. To understand the underlying factors associated to compensation amounts, the Financial Assignment will consider important factors such as the frequency & risk rate, survival rate and insurance premiums charged by airline and car insurance companies (Kim, Rhie, Yoon, Kim, & Won, 2012). Each mode of transport and its insurance policies are very different from the other and result in different amounts of compensation being awarded to the accident victims and their families.
Accident frequency and risk assessment methods used on this Financial Assignment
The main factors linked to determining the different compensation rate offered by airline and car accidents is accident frequency and risk. Although airlines attract more fear among travellers due to the "near-zero" airline accident survival rate, air travel is considered to be the safest mode of transport (Baker, 2010). The Financial Assignment research also identified Road transport as classified as the riskiest mode of transport which results in millions of accidents, injuries and deaths each year. This results in making road transport accident compensation less than air travel due to road transport having a higher accident probability and lower insurance coverage and compensation rates.
Survival Rate effects the Insurance Premium Rate
Air travel also offers a lower survival rate compared to road transport due to aircraft travelling at a high altitude which results in most crash-landing being fatal. Road transport accidents are more common but pose a lower risk of death as compared to air travel (Bolderdijk, Knockaert, Steg, & Verhoef, 2011). Due to air travel having a higher fatality rate, air travel insurance is also considerably higher and charged per flight as compared to road transport insurance which is usually an annual premium policy. This results in Air travel insurance compensation rates being much higher than other forms of transport discussed on this Financial Assignment.
Conclusion
The Financial Assignment also correlated the number of travellers to increasing accidents. As the number of people travelling by air increases, it's only natural to see more air travel accidents occurring in the future (Barros, Faria, & Gil-Alana, 2010). Airline accidents could be caused by several factors and travel accidents can continue to be expected in the future. There are several aviation bodies associated with investigating airline accidents and they usually hold the responsible people to task. Compensation must also continue being awarded to the survivors, beneficiaries and close family members since this compensation helps reduce the financial strain on a victim's dependents. This allows for accident victim dependents to receive the required financial protection while they recuperate from the loss. The amount of compensation awarded will usually depend on the type of accident insurance policies a person buys. To conclude the Financial Assignment it is identified that the higher the cost of the accident insurance policy the higher compensation one can expect, making it the choice the insured individuals needs to considered while selecting their insurance coverage policies.
Bibliography
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