According to a report by the Transport Research Wing of the Ministry of Road Transport and Highway, India reported a total number 480,652 road accidents in 2019, an average of 414 a day or 17 an hour. An accident is a threat to not just the life of the third party but an equally worrisome predicament for the policyholder – it affects his life and property adversely too. There are various aspects to a car insurance policy that one must consider while purchasing insurance to ensure that one gets the optimum coverage for oneself.
This choice will be crucial as it will not just define the nature of coverage of the policy but the premium prices as well.
What is a Personal Accident Car Owner in a Car Insurance Policy?
Personal accident insurance reimburses the insured of the medical costs incurred in an accident and the compensation to the family members in case of death or disability of the insured. The nominee is guaranteed 100% compensation from the insurance company in case of the accidental death of the insured.
Is It Mandatory to Have One in India?
It is mandatory for all car owners to have a personal accident cover. An individual has to buy it separately apart from his car insurance plan. This is mandated under the India Motor Tariff Rules, 2002.
Do You Need to Buy it Again for a New Car?
As of 1st January 2019, the IRDA unbundled the personal accident cover permitting car owners to skip purchasing a personal accident cover if he or she already has it.
This prevents the owner from purchasing an additional in-built personal accident cover with every new car insurance policy that he or she successively purchases.
What is the Difference in Premium Cost Once You Add Personal Accident Cover?
The premium is fixed at INR 750 for a 15 lakh policy cover. This amount has been fixed by IRDAI for all types of cars. However, car insurance companies have the liberty to determine the premium of standalone or unbundled personal accident cover.
It is important to note that the premium of a personal accident cover is the same for all persons irrespective of their age group, however, it depends on the occupation and the income of the policyholder.
What are the Major Benefits of Having a Personal Accident Cover?
- Accidental death compensation - The nominee of the insurance policy will receive some financial security in the form of compensation. The compensation amount may fluctuate between lakhs to a crore.
- Compensation for permanent total disability - The insurer will provide compensation for a permanent total disability such as loss of hearing in both ears, loss of speech, loss of vision in both eyes, etc.
- Compensation for permanent partial disability - The insurer will provide compensation for a permanent partial disability such as loss of hearing in either ear or loss of vision in either eye or loss of an index finger, thumb, hand, or limb.
- Compensation for temporary total disability - The insurer will provide a weekly allowance in case the insured is temporarily bedridden in the aftermath of the accident. The policyholder may also use this claim amount to pay EMIs if there is any loss of earnings.
- Transportation benefit - The insurer will reimburse the transportation cost incurred by the family member to reach the hospital where the insured is admitted. The amount that can be claimed has a threshold limit of INR 50,000.
- Miscellaneous benefits - The insurance company may provide for –
- Education allowance or benefits.
- Employment benefit.
- Funeral expenses.
- Hospital charges including ambulance cost.
- Vehicle alteration benefit.
- Home alteration benefit.
- Daily cash allowance is paid to the insured in case of hospitalization after the accident.
- Compensation is provided for ambulance charges to the hospital.
- Compensation is provided for transportation or repatriation of mortal remains.
- Compensation in case of bone damage or fractured bones.
- Compensation in case of accidental burns.
- Loan protector in case of demise or lifelong disability.
What is Personal Accident Cover for Paid Drivers/Customers?
The following aspects are covered by the policy –
The Workman Compensation Act makes the employer liable to pay compensation in case the driver gets injured in an accident. To protect one’s driver, one can opt-in for a personal accident cover as an add-on taking care of all the liabilities that you might incur in the future in lieu of any harm being caused to your driver.
While purchasing a personal accident cover, read the terms and conditions of the policy thoroughly, factor in the pros and cons of purchasing the said policy, and avoid falling prey to misleading clauses. Though this cover is compulsory, the choice of choosing an insurer is entirely yours!