Is Personal Accident Cover for Owner-Driver Compulsory?

Published On 09 Dec 2019 By InsuranceDekho

Every car owner in India is mandatorily required to have a personal accident cover. However, its purchase with a car insurance plan is optional.

Roads are filled with uncertainties. Accidents are unpredictable and can have dangerous consequences such as critical injuries, permanent disability or even loss of life along with property damage. Therefore, you need to prepare yourself for any such unavoidable circumstances, especially if you are driving with a personal accident cover. Let’s discuss this cover in detail.

The IRDAI (Insurance Regulatory and Development Authority of India), announced on January 1, 2019, that it is unbundling, the personal accident cover from car insurance policies. The purpose of this movement is to reduce the overall cost of ownership of a vehicle, as previously IRDAI has increased the compulsory PA coverage amount from Rs. 1 lakh to Rs. 15 lakh, which became a burden on all vehicle owners.

Even though it is not compulsory to get a bundled PA cover that comes along with a car or bike insurance policy, it is, however, mandatory for every owner-driver to have at least a basic PA policy for covering all injuries, disabilities or death caused to the self. You never know what is waiting for you at the turn of the next lane. And it would often be difficult for you or your family to pay out large sums for your medicines or other hospitalisation needs. The good news is, one doesn’t need to buy a personal accident cover more than once, neither does one need to renew it every year. It is a one-time investment.

Reasons Why One Must Get a Personal Accident Cover

Every owner-driver must make sure to have at least a basic coverage for personal accidents. Each day, a great number of accidents occur on the Indian roads. So one must have oneself insured against the damages caused as a result. Here are some of the coverages you would get if you hold a PA cover policy.

Accidental Deaths

In case a policyholder meets an accidental death, the insurance company would pay the sum he has insured to his family. In such cases, the nominee would receive the total insurance amount as per the cover offered by the policy

Physical Disabilities

A typical PA insurance plan would have the coverage of the following three types of physical disabilities - a) permanent partial disability, b) permanent total disability, c) temporary total disability.

The first among these include an injury caused due to an accident that leads to the loss of eyesight, speech, hands or feet. In this case, the policyholder would get either a partial amount of the sum covered by the policy for a specific period of time or receive a one-time lump sum amount altogether.

The second, on the other hand, occurs when the injury caused to the policyholder prevents him/her from carrying on with his normal responsibilities. In this case, the policy would get terminated at once after paying the assured sum to the policyholder if he/she doesn’t have any chances of recovery over a continuous time period of 12 months.

A temporary total disability occurs when a person suffers from bodily injury during the policy year that prevents him/her from continuing with any kind of occupation. However, the disability caused must not exceed a period of 104 weeks since the date of the injury until the time you are being able to resume all your chores as certified by the medical professional of the policyholder. In such an injury, the insurance company generally provides the policyholder with daily or weekly benefits. The amount receivable depends upon the nature and intensity of the impairment following the accident. However, the policyholder would usually have the freedom to customise his or her PA cover plan as per his/her needs and preferences.

What is Not Covered in a Personal Accident Plan?

Most insurance companies refuse to cover the following events or occurrences in a PA cover -

  • Pregnancy and childbirth
  • Suicide or self-injuries
  • Accidents met as a result of rash driving or driving under the influence of alcohol, drugs or other intoxicants
  • Pre-existing disabilities of injuries
  • Suffering from any psychological disorders
  • Committing a criminal offence
  • Participating in hazardous activities, sports or adventures, especially if one is untrained

Factors to Keep in Mind While Getting a PA Cover?

  • The premium of a personal accident cover is the same for all owner-drivers, irrespective of their age. It is because the risks of an accident associated with the policyholder remains the same, does not matter which age group does he or she belongs to.
  • Rather than age, a personal accident cover depends on the occupation and the income of the policyholder. Depending on your income, your PA insurance plan might differ. For example,Tata AIG offers separate PA covers for salaried and self-employed individuals. While for the former, it offers a total premium amount of only 10 times the annual income of the individual’s income, which becomes 20 times the salary of the latter.
  • Never jump for benefits or add-ons that seem appealing to you. Most of the personal accident policies come with a long list of perks and privileges that are really not required. You must choose your benefits wisely and think whether you really going to need all of them. Try to eliminate those which you might find unnecessary or inappropriate for your personal needs. There are many insurance policies which offer the basic coverages at an affordable rate.
  • Most insurance companies refuse to provide personal accident coverage to people who are exposed to high risks, such as those who are involved in high-risking jobs or occupations like air hostess or pilot, and those involved in sports like paragliding or bungee jumping.

To conclude, whatever personal accident policy you are planning to buy, do consider giving a thorough read through the various terms and conditions associated so as to avoid falling prey to any hidden or misleading ones. Also, check whether you are getting what you are promised before signing the deal. In case you have a doubt, ask and clarify with your insurance provider straight away so as to get the best insurance plan. It is your responsibility to be safe and keep supporting your dependants at home.

For further reading:

How to Claim Car Insurance After Meeting an Accident in India

Disclaimer: This article is issued in general public interest and 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.

Sources: HDFC Ergo General Insurance, Money Control, Economic Times, ICICI Lombard, Live Mint, Acko General Insurance

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