Is Personal Accident Insurance essential in India?

Fire Insurance Company

Is Personal Accident Insurance essential in India?    12th Feb 2020

While driving on the Indian roads, the possibility of an accident can never be ruled out. Whether due to a momentary lapse on your part or due to oversight on the part of someone else, accidents can take place anytime and anywhere. But the damages/losses incurred due to it can be mitigated with the help of personal accident insurance in India.

What is Personal Accident Insurance

Personal accident insurance is offered in combination with Third-party policy. Insurance companies charge a nominal fee for offering this coverage. Under this policy, you will be reimbursed by the insurance company for injuries suffered while driving your vehicle.

Is it mandatory to get personal accident insurance in India?

As per the latest insurance regulations introduced by the government, it is mandatory to get personal accident insurance in India for a vehicle owner. The current regulations by IRDAI state that the car owners, as well as bike owners, will now get a mandatory personal accident cover of Rs. 15 Lacs as per their motor insurance policies. Previously, this cover was capped at Rs. 2 Lacs for car owners and Rs. 1 Lac for two-wheeler owners against a premium of Rs. 100 and Rs. 50 respectively.

Now the premium has been increased to Rs. 750 for a cover of Rs 15 Lacs. This premium is payable over and above the mandatory third party insurance cover. If the insured person wants a higher cover, then the same can be availed by paying a higher premium, which is to be decided by the insurance company. The coverage of the policy extends to the owners of the vehicle as well as the drivers of the vehicle, provided the availability of a valid driving license.

This improvement in the personal accident insurance in India was introduced after a judgement by the Madras High Court in the year 2017. While passing the judgement, the court noted that enhancing the personal accident cover will act as some kind of solace to the victim as well as survivors of the accident.

Though there are some exceptions applicable wherein the owner can opt-out of this mandatory personal accident cover i.e.

  • If the vehicle owner already has a valid personal accident cover policy with a sum insured of more than Rs. 15 Lacs.
  • If the owner already has a motor insurance policy with a compulsory personal accident cover with a sum insured of more than Rs. 15 Lacs for another vehicle owned by him/her.
  • If the vehicle owner already has a separate compulsory personal accident policy.
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    Benefits of Personal Accident Insurance

    Some of the standout benefits of subscribing to personal accident insurance in India have been listed here: -

  • The policy covers in the case of the unfortunate death of the insured. The nominee is entitled to the entire sum.
  • The cover is even provided for total permanent disability, permanent total disability, permanent partial disability and temporary total disablement.
  • Some policies even cover hospitalization due to an accident and the cost of transportation for mortal remains in case of death.
  • The dismemberment of any kind is also covered in some policies. Certain companies have also given said ratio and benefits for certain kinds of injuries that will then be paid to the policyholders
  • Very few companies also provide optional coverage in case of burns. This can also be considered before personal accident insurance is taken into action.
  • The treatment for the burns is also covered by some insurance companies.
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    With such extensive benefits on offer, availing personal accident insurance in India is a necessity for the vehicle owners.