Tuesday, September 29, 2020

Understanding the Personal Accident Cover in Car Insurance

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When you buy car insurance in India, buying a personal accident cover offers an injury and life cover when in an accident. Car accidents can be brutal and can cause injuries that take a long time to heal. In the dearth of an insurance policy, you or your loved ones can be left in the middle of a financial crisis. Today, we are going to talk about a personal accident or PA cover in car insurance. We will look at the features of this cover and talk about some things that you need to keep in mind before buying it.

What is Personal Accident (PA) Cover in Car Insurance?

When you buy insurance for a car in India, a personal accident cover is offered as an add-on or a rider. It offers protection to the owner-driver or a hired driver. The cover allows you to claim the entire sum assured if the accident causes death or permanent loss of arms or legs. Some insurers also offer tax-free compensations with the option of getting paid in lump sum or in instalments. It is important to understand the inclusions and exclusions of the PA cover in car insurance to ensure that you are aware of what it offers.

Features of Personal Accident (PA) Cover in Car Insurance

Major Car Insurance providers in India offer a personal accident cover of Rs 15 lakh with their car insurance policies. Taking that into consideration, here are the significant features of a PA cover in car insurance:

  1. Accidental Death – In case of the death of the driver, the insurance company pays the nominee the entire sum insured of Rs 15 lakh.
  2. Permanent Total Disability – If the vehicle gets into an accident and the driver gets badly injured, resulting in permanent total disability, then it can get impossible to engage in his previous occupation. Some injuries can be bad enough to not allow him to engage in any occupation. In such cases, the insurer will pay the policyholder the entire sum assured of Rs.15 lakh to help him manage the financial setback and possibly create a stable source of income.
  3. Permanent Partial Disability – Sometimes, an accident can cause permanent partial disability in the form of a total loss of a sensory organ or a part of the body. This can lead to a loss of income. In such cases, the insurer pays the policyholder a pre-determined percentage of the sum assured based on the extent of the disability.
  4. Temporary Total Disability – Some injuries can result in home confinement of the policyholder until the injuries are healed. This can stretch from a few weeks to months. While there is no physical disability, it renders the policyholder income-less for the said period. In such cases, many insurers provide a weekly benefit to help tide over the resulting financial crisis.
  5. Medical Expense Reimbursement – Some personal accident cover policies also offer reimbursement of medical expenses like costs of treatment of minor injuries or out-patient medical expenses caused by an accident.

Exclusions of a Personal Accident (PA) Cover in Car Insurance

Here are some scenarios where the insurance company might not honour the claim for personal accident damage. While it can vary from one insurer to another, here is a generic list:

  1. Death or injury, directly or indirectly, wholly or in part, arising from intentional self-injury, suicide, or attempted suicide, physical defect or infirmity
  2. If an accident occurs when the policyholder is driving the car under the influence of liquor or drugs
  3. Committing a criminal offence
  4. Participating in dangerous activities like racing, adventures, etc.

Is it Mandatory to have a Personal Accident Cover with your Car Insurance?

The Insurance Regulatory and Development Authority of India (IRDAI) has made it mandatory for every owner-driver to have a minimum Personal Accident cover for all injuries, disabilities, or death. While earlier this cover was offered with car insurance policies, from January 2019, the IRDAI decided to unbundle them after it increased the compulsory personal accident coverage amount from Rs 1 lakh to Rs 15 lakh.

Things to Keep in Mind Before Getting a Personal Accident Cover

Here are some things that you must keep in mind before buying a personal accident cover:

  1. Ensure that you check the total coverage of the personal accident cover. Most insurance companies in India offer a personal accident cover of Rs 15 lakh with their car insurance policies.
  2. Check the disability claim (partial, total or temporary) claim details. Understand what percentage of the sum assured will be paid out in all these cases.

Summing Up

When you buy car insurance online in India, you must also research personal accident cover available to you. Read through the terms and conditions and pay special attention to the inclusions and exclusions as it will directly impact the coverage. Remember, the personal accident cover in car insurance is designed to offer financial protection to you and your loved ones in case of an injury, disability, or death due to an accident. Hence, consider your lifestyle and weigh all options carefully before buying the policy. Good Luck!

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