Personal Accident Cover (PA Cover) in Motor Insurance

Accidents can lead to severe damage and bodily injuries, and sometimes even loss of life. Who wants to fall prey to such incidents which not only bring financial stress but also create emotional havoc? 

That is why everyone wishes to have a financial safety net in case of an accident, and the best safety net is the Personal Accident (PA) Cover in Motor Insurance. One can opt for it alongside comprehensive insurance policy and Third-Party Liability policy.

Read here to understand how PA Cover can provide peace of mind for you and your loved ones, how it works, and why it's important for car insurance and bike insurance. 

Personal Accident insurance coverage safeguards the owner or driver of the vehicle, unlike other insurance types which provide financial help for damage or loss of car parts or bike parts. 

Personal Accident Cover in Motor Insurance provides financial assistance to the insured member in case of accidental death, bodily injuries, permanent partial or total disability, and temporary total disability, as a result of accident. 

Also, in case the insured person dies of an accident, the nominee will receive 100% compensation from the insurer.

Yes, the Personal Accident (PA) Cover for the registered owner-driver of a vehicle has been made mandatory in India for all private vehicles given that the owner-driver has a valid driving license.

Alarming Road Incidents Statistics in India

According to the annual report by Ministry of Road Transport and Highways on road accidents in India in 2022, India has consistently reported a high number of road mishaps despite government’s increasing investments in road infrastructure.

Here are some noteworthy statistics:

• The number of road accidents in 2022 was at an all-time high, witnessing an 11.9% increase from the previous year. 

• In 2022, 4,61,312 incidents of road mishaps were recorded, which led to the loss of 1,68,491 lives.

• The number of people who died and the number of injured people also increased in 2022, by 9.4% and 15.3%, respectively.

• As per the report, about 72% of total accidents and 71% total deaths in road mishaps in 2022 happened due to over speeding.

• The data also shows that the hit-and-run cases contributed to 14.6% of the total road accidents and 18.1% deaths in 2022.

Imagine a speeding truck hitting the side of a car, hurting the driver. Many such unpredictable events can lead to loss of life or permanent disabilities. Therefore, in such situations, PA Cover comes in handy. 

So, here's why Personal Accident Cover is important:

Financial Safety Net

If suppose you meet with an unfortunate accident damaging your car and injuring you. Then your regular insurance policy will cover the damage to the car and PA cover will help with the medical bills associated with your treatment, thus acting as your safety net.

Peace of Mind

PA coverage’s financial benefits in case of death or disability of the policyholder can be a lifesaver. It provides you and your family peace of mind by helping manage sudden financial burdens and cover immediate expenses.

Now, if you are the owner of your car, you will be covered by the PA policy. However, if you have a paid driver who gets injured in an accident while driving your car, he/she will be covered under the PA policy (as an extended cover or as a standalone policy) as per the Workmen Compensation Act. 

Remember that the driver must have a valid driving licence to avail this.

As per the Workman Compensation Act, the vehicle owner or the employer is liable to pay compensation to the paid driver in case of any injury arising due to work-related accidents.

Here are two ways to cover paid drivers under PA policy:

Extending PA Cover for Paid Driver

Some insurance companies allow you to add your paid driver to your PA coverage. However, you will have to pay an additional premium.

Standalone PA Cover

You can also get your paid driver their own standalone PA cover policy, which would specifically protect them financially in case of an accident.

Though the PA Cover Insurance covers the vehicle’s owner-driver, this add-on can be extended to other passengers in the car in case of accidents leading to their disability or death. 

You can buy the extended cover for an additional premium. Also, the number of passengers in a vehicle that can be covered under this policy depends on the type of vehicle or seating capacity.

Additionally, if passengers have their individual standalone PA policy, then they would be covered under that. 

The policyholder will not receive any benefit under the PA cover in case of injuries or death caused due to:

• War and invasion
• Any act of terrorism 
• Intentional self-injury or suicide
• Biological or chemical contamination
• Influence of intoxicating drugs or liquor
• Engaging in illegal activities
• Participation as a professional in hazardous or adventure sports
• Pre-existing disability or accidental injury
• Childbirth and pregnancy

IRDAI (Insurance Regulatory and Development Authority of India) has fixed a premium of ₹750 for bundled PA Cover of ₹15 lakhs for private cars and two-wheelers. 

However, IRDAI has given the liberty to insurance companies to have their own PA Cover pricing structures for standalone policies - the premiums of which are based on risk and various other factors.

For example, if you travel daily in a metropolitan city, then your chances of meeting with an accident will be higher. Hence, your PA Cover premium will also be higher. Similarly, other factors like your age, occupation, risk level, sum insured, add-on riders, etc., also determine the premium cost for Personal Accident Cover in India.

Here are some key factors that you must consider when buying a Personal Accident (PA) policy:

• Your Requirements: First decide your risk appetite as younger individuals might prioritize higher sum assured, while older individuals might focus more on better medical expenses coverage.
• Coverage: Determine if you need coverage based on your lifestyle. For example, if you travel a lot, you might need a PA policy with higher coverage as you are more prone to accidents. 
• Sum Assured: Choose a PA policy in which the payout amount in case of death or permanent disability can adequately cover your financial needs and liabilities.
• Premium: Compare quotes from different insurers to find the best policy as per your coverage and budget requirements. Also, remember to consider the potential premium increase upon policy renewal.
• Benefits: Consider a policy with benefits like medical expense coverage, temporary disability benefits, and accidental death benefit, or which offers optional riders like hospital daily cash allowance, etc.
• Claim Process: Compare and choose an insurer with a good claims track record.
• Policy Wording and Exclusions: It is crucial to carefully read the policy wording and review all the inclusions and exclusions before paying.

Life is unpredictable and so are accidents. Hence, you need a Personal Accident Policy that comes with several benefits including: 

• Medical Bills: PA Cover helps cover medical bills associated with hospitalization, surgery, or rehabilitation due to injuries arising because of accident.
• Death Benefit: If an accident turns out to be fatal, the PA Cover acts as a financial cushion and offers a lump sum payout to the insured person’s family. This helps cover immediate expenses and manage sudden financial burdens.
• Disability Benefit: In case of permanent disability due to an accident, the PA Cover provides financial support for home modifications or special equipment, as per the policy.
• Income Support: PA Cover also provides some financial support in case there is no source of income. This may happen when the policyholder cannot work due to injury or disability caused by accident.
• Educational Support: Some Personal Accident policies may also cover educational benefit for the policyholder’s children, given they are dependent and under 25 years old.
• Flexible Coverage: Often PA Cover allows you to choose a higher sum assured or additional riders as per your specific needs.
• Peace of Mind: PA Cover is a valuable investment that offers financial security in case of unforeseen accidents and, hence, provides peace of mind for you and your loved ones in financial emergencies.

The claim under the Personal Accident Policy as a part of Motor Insurance can be claimed by the owner-driver or nominee of the respective four-wheeler or two-wheeler. The policy’s aim is that the nominee or the surviving owner fetches the maximum benefits (as mentioned in the policy).

To retrieve benefits of the PA cover during an accident where the owner-driver has been injured, one needs to file a claim. Following are the instructions to make one: 

1. Intimate the insurer about the incidence and resulting loss.
2. Ask for an FIR followed by FR. It will be one of the most important documents needed for processing the claim. If possible, arrange for the witnesses who can approve of the occurrence of a claim.
3. Complete the formalities with the insurer, that includes filling in the claim form, provide photographs of the car accident (if applicable). In the case of Digit, all these processes can be easily completed online on our Digit app.
4. Submit all the documents online and wait for the insurers to verify the details.

In the eventuality of death of the owner-driver, the nominee will file the claim. She/he will