Is Personal Accident Cover for Owner-Driver Compulsory?

When you are driving a car, your safety is something that should never be overlooked. But accidents on roads can happen to anyone and sometimes they can become serious and put your life in danger. At the time, your and your family’s utmost priority becomes your  protection rather than worrying about expenses. To avoid any financial stress in that already stressful situation, personal accident cover is what you need. It is an add-on feature that comes with your  car insurance and gives you financial protection in the times of emergency. Many people find it a liability rather than an advantage. In this article, we will discuss the importance of personal accident cover and whether it is compulsory to buy or not. 

What is A Personal Accident Cover?

Also known as Accidental Insurance, a Personal Accident (PA) Cover for car insurance provides a safety net to the policyholder at the time of any injury or hospitalisation that may happen. It also provides a financial cushion to fall back on in case of demise of the policyholder due to a road accident while driving. This cover is similar to general insurance cover that offers financial compensation. The personal accident cover compensation to the policyholder is maximum of INR 15 lakh. This cover is mandatory by law and has to be taken as an add on as soon as you buy a vehicle.

When is A Personal Accident Insurance Cover Mandatory?

In many countries, including India, personal accident cover for the owner-driver is mandatory as part of motor insurance policies. The Motor Vehicles Act, 1988, mandates that all vehicles must have a valid insurance policy, which includes third-party liability and personal accident cover for the owner-driver. This requirement ensures that drivers are financially protected against accidents, even when driving their vehicles.

The mandatory cover usually has a minimum sum insured amount, which can be increased based on the policyholder's preference and the insurer's offerings. The maximum compensation offered is Rs 15 lakhs as per the guidelines of IRDAI. It means that your total claim amount cannot exceed  this limit during your policy term. For example, if you have claimed Rs 8 lakhs within 5 months of your policy and if you require it again then you can claim up to Rs 7 lakhs next time during that policy year. 

Reasons to Get Personal Accident Insurance

Every owner-driver must ensure that they have at least basic personal accident coverage. Every day, there are several road accidents. As a result, everyone should have themselves covered in case of an accident. The following are some of the benefits of having a PA cover policy.

Unintentional Deaths

If a policyholder dies in an accident, the insurance company will reimburse his family the amount he has insured. In such instances, the nominee would receive the total insurance amount based on the policy's coverage.

Disabilities Physical

A typical PA insurance plan would cover the three sorts of physical disabilities listed below: a) permanent partial disability, b) permanent total disability, and c) temporary total disability.

What is Covered Under Personal Accident Insurance?

Personal accident insurance coverage offers financial aid to the affected person’s family in the event of an unfortunate accident caused due to several reasons. While considering whether to buy a car insurance, one must pay attention to several factors, especially what your car insurance policy covers. Following is a list of some of the few scenarios when policyholders may claim for financial assistance.

Accidental Death: If the policyholder dies, the entire sum is given to their nominees.

Permanent Total Disability: If policyholders suffer a permanent total disability due to an accident, a certain sum is compensated based on the severity of the disability.

Permanent Partial Disability: This cover applies to policyholders who have suffered partial disabilities in an accident. The compensation is a percentage of the total insured amount which depends on the extent of the diability.

Temporary Total Disability: If a policyholder suffers temporary total disability which hinders their work, insurance policies are liable to pay a weekly or monthly allowance to help them cover their loss of income during recovery.

Accidental Dismemberment: If a policyholder suffers loss of any of their body parts due to an accident, they get compensated by the insurance company. Again, this compensation depends on the extent of the injury.

Hospitalization Expenses: Most car insurance policies that offer personal accident cover provide compensation for the policyholder’s hospitalization and other related expenses.

Child Education Support: Some insurance plans have provisions to take care of dependent children’s education if the policyholder meets an untimely death due to a road accident.

Personal Accident Plan Cover Exclusions?

Most auto insurance companies will not cover the following events or occurrences under a PA policy:

• Childbirth and pregnancy
• Suicide or self-harm
• Accidents caused by hasty driving or driving while impaired by drink, drugs, or other intoxicants
• Pre-existing injury disabilities
• Suffering from any mental illnesses
• criminal offence
• Participating in dangerous hobbies, sports, or adventures, particularly if untrained

What Should You Consider When Getting PA Coverage?

When choosing your personal accident cover, you should consider the following factors:

Sum Insured: Assess your financial needs and affordability and then go for a plan that adequately covers your and your family needs. Note that a higher coverage means a higher premium so, decide accordingly. 

Premium Rates: The premium for PA cover can vary based on the coverage amount and the insurer's terms. Compare different policies to find one that offers the best value for money.

Exclusions: Understand the policy's exclusions mentioned in your policy. For instance,  self-inflicted injuries, driving under the influence(drink and drive), and engaging in unlawful activities can significantly affect your premium rates. 

Rider Benefits: Some policies may offer add-ons/riders like educational grants for your children, buying blood from a blood bank etc. Assess whether these benefits align with your needs.

Advantages of Purchasing Personal Accident Insurance

The following are the advantages of getting own-damage insurance:

• Security And Peace Of Mind

In the event of uncertainty, in which the owner-driver suffers from a disability or dies, there is a major impact on the individual and family's earning capacity. With this style of cover, there is some padding to help the family cope with the changes.

• Minimal Documentation Required

Personal accident insurance, whether obtained in conjunction with automobile insurance or in any other form, can be purchased online. This is the simplest choice because it involves little to no documentation and can be completed at your leisure.

• Simple Claim Process

The claim process for making this type of insurance claim is simple. The full procedure can be completed either offline or online. Furthermore, once the procedure is completed, most insurance companies give compensation in a timely and efficient manner.

Factors To Consider For Personal Accident Cover

Before making the decision to buy a personal accident cover, prospective buyers must learn about the various factors that influence insurance with personal accident cover.

Legal Requirements

In India, traffic laws dictate that all car owners must purchase car insurance offering a personal accident cover. As per the India Motor Tariff of 2002, all vehicle owners must have personal accident cover regardless of whether they purchase car insurance with comprehensive coverage or third-party liability coverage. Including a personal accident cover as part of your car insurance also ensures legal compliance, thus saving you the trouble of facing legal complications in the future.

Coverage Limits

The minimum amount covered by a Personal Accident cover is INR 15 Lakhs. One must check whether their current personal accident cover policies provide this amount before buying a car insurance. Understand the maximum amount that can be covered by your personal accident cover, before making any final decisions.

Understand What Injuries Are Covered By Your Policy

Before making the final purchase of car insurance with personal accident cover, take the time to read through the document policies to understand what injuries are covered. This will save your time and effort at the time of an accident. Having a thorough understanding of the policy terms and conditions not only educates policyholders but also gives them the power to decide whether the specific car insurance policy offers the coverage that they were hoping to avail of.

Conclusion

To summarise, whatever personal accident policy you intend to get, give it a full read through the many terms and conditions linked with it to avoid falling victim to any hidden or misleading ones. Check to see if you are getting what you are promised before signing the contract.

If you have any questions, contact your insurance provider right immediately to acquire the best insurance coverage. It is your responsibility to stay safe and provide for your dependents at home.

FAQs

Q: Do passengers need to have a compulsory personal accident cover?
A: No, personal accident cover for passengers is not compulsory. However, it can be added to the policy for additional protection.

Q: Can I have multiple personal accident covers?
A: Yes, you can have multiple personal accident covers from different insurers. However, in case of a claim, the benefit is restricted to the actual loss suffered, and not all policies may pay out simultaneously.

Q: Is it possible to increase the sum insured for personal accident cover after I buy a policy?
A: Yes, most insurers allow policyholders to increase the sum insured for personal accident cover, subject to specific terms and conditions.

Q: Is PA cover applicable if the accident occurs outside the country?
A: Generally, PA cover is valid within the country's geographical boundaries. However, some policies may offer international coverage. Check the details with your policy provider before buying a policy.

Read More:

How to Claim Car Insurance After Meeting an Accident in India

Disclaimer: This article is issued in the general public interest and is meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.