Find Out Why a 15 Lakh Personal Accident Cover is Mandatory

Posted on: Jul 19, 2022 | 3 mins | Written by: HDFC ERGO Team

Find Out Why a 15 Lakh Personal Accident Cover is Mandatory

Car accidents, by definition, are unpredictable and unexpected. Even minor accidents can cause significant financial drain, while the major ones can severely impact your health. In both cases, there’s an immediate need for finances, which you may not always have handy, when needed. And that is why a personal accident cover is mandatory with your car insurance policy, as it is a safety net against these emergencies.

What is a personal accident cover?

A Personal Accident (PA) cover is a financially protective instrument that covers you against death or disability due to an accident. While it was previously tied-in with your car insurance policy, the IRDAI (Insurance Regulatory and Development Authority of India) unbundled it from car insurance policies, to lower the cost of car ownership. However, it is still mandatory for vehicle owners to have a personal accident cover in car insurance with a coverage amount of INR 15 lakhs. Failure to have a personal accident cover might attract fines in accordance with the Motor Tariff, 2002.

What does a PA cover?

In case of disability, you will be compensated for your treatment costs in accordance with the policy terms. For total disability cases, the entire sum insured is paid to the policyholder. And in case of death, your nominee will receive the sum assured and other death benefits, if any.

Personal accident covers usually cover owner-drivers. However, there are PA covers for paid drivers, and unnamed passengers as well, covering accident-related risks to a named driver, and passengers in your vehicle. These are optional but can be availed to protect your family members and the driver.

Things to note when getting a PA cover

• Coverage

Ensure you’re getting adequate coverage from your PA cover. If you’re constantly travelling with the family, it makes sense to have them covered under the policy as well. If you hire a driver for your daily commute, you can cover the driver as well at a nominal cost. All the potential scenarios in your daily life must be covered against the risk of accident.

• Insurer

Choose an insurer that has a healthy claim-settlement ratio. The higher, the better. This means that that insurer is willing to settle your claims and is not looking to withhold coverage. Also, choosing an insurer with a wide presence helps, as the treatment can be done easily at one of the network-affiliated hospitals.

• Policy specifics

Ensure that your PA cover includes coverage for specific scenarios such as broken bones, burns, partial disability, permanent disability, and accidental death.

• Ease of portability

Ensure that the insurer speaks of ease in policy portability. It must be a time-bound act and hassle-free, to ensure that the policyholder can transfer their policy from one insurer to another without hassle.Furthermore, lookout for discounts that are given on lowering your risk profile and improving your health.

What is not covered under a PA plan?

It’s also important to understand what is not covered under your PA plan. Some plans may not provide overseas coverage. Natural death is also not covered. Driving under the influence of alcohol, drugs or any other intoxicating substance will likely void your claim. Driving without a valid license may also lead to claim rejection. Damage arising out of war is also not covered. Neither is driving with criminal intent.

Conclusion

To summarise, taking a PA cover of INR 15 lakhs with your car insurance is mandatory. However, you don’t need to avail a PA cover for every vehicle you own. Keep in mind the inclusions and exclusions and go through the policy document in detail to understand the specifics. Choose an insurer with a high claims-settlement ratio and renew your policy on time to remain covered and avoid legal action.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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