Is Personal Accident Cover for Owner-Driver Compulsory?

Accidents on roads happen all the time, sometimes they are minor but at times they can be serious or lethal. It is always better to be prepared for what happens next, afterall prevention is better than cure. This saying goes in tune with whether you need to drive safely as well as when you need to cover yourself with proper insurance. This is where a personal accident cover comes into picture to safeguard you - the vehicle owner from any motor accident. A personal accident cover is mandatory as by law. As per the Insurance Regulatory and Development Authority of India (IRDAI), if you are a car or bike owner you must have a personal accident cover of INR 15 lakh to ensure financial coverage at the time of need due to a motor accident.

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.

What Coverage Does Personal Accident Cover Provide? 

There are three kinds of coverage offered under Personal Accident (PA) Cover:

• Permanent Total Disability: In case the policyholder gets totally disabled after a motor accident, they are liable to get the total coverage amount of inr 15 lakh. In case of loss of both limbs, loss of both eyesight, loss of one limb and one eyesight also, the policyholder gets 100% of the coverage amount.
• Partial Disability: In case the policy holder loses one limb or eyesight of one eye, they are entitled to receive 50% of the sum insured.
• Accidental Death: In case of accidental death of a policy holder, their nominee as mentioned in the policy document will be given the total coverage amount of INR 15 lakh.

When is A Personal Accident Insurance Cover Mandatory?

A Personal Accident Cover becomes mandatory as soon as you buy a motor vehicle (car or bike). This means that every individual who owns a car or a bike must have a PA cover. It is important to note that a Personal Accident Cover is mandatory for individuals who are riding the vehicle registered in their name. This also means that if you are buying a new car and you already own a scooter for which you had taken a personal accident cover, you do not have to take another cover while buying your car. Let’s look at an example to understand this better:

Rahul has a Honda Xtreme 125r bike and already has a Personal Accident Cover of INR 15 lakh which he had taken while buying his bike on July 4th 2023. Today, Rahul is buying a car Tata Tiago NRG on the 5th of July 2024. Since Rahul already has a PA Cover, he doesn’t need to buy another cover for personal accident while buying his car. One Personal Accident Cover qualifies for one person irrespective of how many vehicles they own.

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.

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 buying a Compulsory Personal Accident Cover one must keep the following in mind:

• Coverage Sum Insured: While there is a mandatory coverage amount of INR 15 lakh, you can choose to enhance your coverage to make your cover more secure for emergencies and for your family in case of a sudden mishap. You can always opt for a higher coverage in the multiples of 1 lakh or 5 lakh with a minimum of 15 lakh coverage. Note that increase in coverage will also increase premium price. Make an informed decision and consider to go through the coverage details properly.
  
• Sum Insured: The sum insured for a personal accident insurance policy is directly proportional to your income. It can be a maximum of 120 times of your monthly income depending on your insurer. Let’s look at it with an example:
  • Shardul is an electrical engineer with a monthly income of INR 50,000. Since as per rule, one can take a maximum of 120 times of their monthly income as their personal accident sum insured. Shardul if they feel like, can take a maximum of 50,000 x 120 = 6000000 of sum insured.
  • Note that whether this sum will be granted to them or not will also depend on the nature of his job owing to the risk class of his job, how frequently he travels and is on the road which will determine his risk factor, and his past credit and claim history.
• Claim Process: One should also keep in mind the claim process of their insurer. Usually you must inform your insurer within 30 days of the accident to make sure the claim process is smooth. The ideal scenario is to immediately inform your insurer as soon as the accident happens or as soon as you can.

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.

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. Is it compulsory to have personal accident cover in India?

Ans. Yes, if you own a motor vehicle (bike or car), it is compulsory as per the Insurance Regulatory and Development Authority of India (IRDAI) to have a Personal Accident Cover in India.

Q. What is the coverage under Accidental Insurance?

Ans. Under Accidental Insurance or Personal Accident Cover you get INR 15 lakh of coverage. This coverage is bifurcated based on the injury type:

Q. Why do you need Personal Accident Cover?

Ans. A personal accident is needed to minimise the burden on you or your family in case you (the policyholder) is in a road accident. Personal accident provides up to 15 lakh rupees of coverage for medical treatment and also provides this money to the dependents of the policy holder in case of their demise due to a road accident.

Q. What is the claim eligibility for Personal Accident Cover?

Ans. Accidental Insurance or Personal Accident Cover is only valid in the condition that you are:

• The registered owner of the vehicle
• The insured named in the Personal Accident Policy
• A valid driving licence holder

Q. Which insurance is best for an accident claim?

Ans. As per claim settlement ratio, HDFC Ergo (100% CSR) is the best insurance company for personal accident claims.

For further reading:

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.