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The Forbes Advisor editorial team is independent and objective. To help support our reporting work, and to continue our ability to provide this content for free to our readers, we receive payment from the companies that advertise on the Forbes Advisor site. This comes from two main sources.
First, we provide paid placements to advertisers to present their offers. The payments we receive for those placements affects how and where advertisers’ offers appear on the site. This site does not include all companies or products available within the market.
Second, we also include links to advertisers’ offers in some of our articles. These “affiliate links” may generate income for our site when you click on them. The compensation we receive from advertisers does not influence the recommendations or advice our editorial team provides in our articles or otherwise impact any of the editorial content on Forbes Advisor.
While we work hard to provide accurate and up to date information that we think you will find relevant, Forbes Advisor does not and cannot guarantee that any information provided is complete and makes no representations or warranties in connection thereto, nor to the accuracy or applicability thereof.
Published: Jul 27, 2022, 1:58pm
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Personal accident insurance can offer valuable financial protection if you’re injured in a car accident. Many comprehensive car insurance policies include some level of personal accident insurance as standard, but you can also buy standalone policies.
Here, we explain exactly how personal accident car insurance works and why you might need it.
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Personal accident car insurance will pay out if you, your partner or a named driver suffers a serious injury, becomes permanently disabled or is killed in a car accident.
The money received from the pay-out can be used to cover medical expenses, as well as replace any income that you would lose as a result of being unable to work due to your injury. The pay-out can go to your family if the accident results in your death.
Policies will only pay out up to a set amount which is tax-free and usually delivered as one lump sum. However, in some cases, it can also be paid in regular instalments over a set time.
Exactly what personal accident car insurance covers you for will depend on the policy and the insurer. But you will usually be able to make a claim for any of the following:
Some policies will also cover you for fractured bones, scarring and burns.
Personal accident car insurance is included as standard on most – but not all – comprehensive car insurance policies. However, cover levels can be very limited, so you may prefer to pay extra to increase it.
Very few third party, fire and theft policies will include personal accident cover as standard, and you will struggle to find any third party car insurance policies that include it.
How much you will receive from a personal accident insurance policy depends on the insurer. Many policies will offer a pay-out of around £5,000 as standard, others will offer up to £10,000. If you want a more enhanced level of cover of up to £100,000, you’ll need to pay extra.
Individual pay-outs will then vary depending on the seriousness of the injury – for example, you might receive £6,000 for the loss of a finger, £30,000 for the loss of a hand or foot, and up to £100,000 for loss of hearing or speech or accidental death.
Your policy documents will set out the levels of cover for different injuries.
It’s important to check the small print of your policy carefully to ensure you know what is and isn’t included. While exclusions will vary between policies, relatively minor injuries such as sprains generally won’t be covered and neither will physiotherapy or psychological trauma.
Some policies also impose upper age restrictions, so you might not be covered if you’re over the age of 80, for instance.
Other exclusions are more likely to be linked to your driving behaviour. This means you won’t be covered if:
Finally, most personal accident policies specify that the injury must be ‘solely and directly’ caused by the accident. This means that if death or an injury was caused by sickness, disease or an underlying health condition, the policy is unlikely to pay out.
Personal accident insurance is not mandatory. But – especially if you are often on the road – it can provide the peace of mind that you’ll have a financial safety net should you need specialist medical treatment or are unable to work due to a car accident.
But it’s worth checking that you won’t be doubling up on cover first. For example, you may already have appropriate cover in place such as income protection (that pays out if you were off work for an extended time) or life insurance (that would provide your family with a lump sum if you died prematurely).
You may even have enough in savings to cover your outgoings if you could no longer work.
If you think personal accident insurance would be valuable, check what your existing car insurance policy provides – and how much it would cost to bolt on more enhanced cover.
It is also possible to buy a standalone personal accident insurance policy which offer higher pay-outs, as well as a higher level of cover.
Compare what you would get with a standalone policy versus the cover offered by your existing car insurance policy. In doing so, it’s worth checking the following:
Once you’ve compared cover levels, then compare the price of each policy to work out what’s best for you.
I’ve been writing about personal finance issues for many years across a wide range of websites, magazines and newspapers. My role is to demystify financial products, explain people’s options and help them make the most of their money.
I’ve been involved in personal finance and property journalism for the past 20 years, editing websites and writing for national newspapers. My objective has always been to offer no-nonsense information to readers that either saves or earns them cash.
Personal Accident Car Insurance – All You Need To Know – Forbes
