A personal accident policy exists when someone takes out what is known as personal accident insurance. This is often already packaged into other existing policies for travel, car and even household insurance.
The intention of a personal accident policy is to provide you with a payment if you are severely injured or die in an accident. This payment comes in the form of a tax-free lump sum if the policy holder is involved in an accident resulting in the loss of one or more limbs, one or both eyes, the loss of use of the above, or some other form of permanent disability.
The type of payment from this type of policy depends on the type and level of injury, and can be made weekly over one or two years, or as a lump sum. Unlike life cover, a personal accident policy will not pay out if you die from an illness or natural causes. Most policies also won’t pay out if there was an element of ‘wilful exposure to danger.’ This would include ignoring hazard and danger signs, such as red flags flying on a beach.
How can a personal accident policy be provided?
A personal accident policy can be provided in one of two ways:
- As a stand-alone policy, either as an individual policy or a group policy, where an employer takes out a policy on behalf of its employees; or
- As a benefit included as part of another product, for example with travel insurance or a bank account.
Most personal accident policies pay out lump sum benefits when the policy terms are satisfied, which usually means when the consumer dies or suffers injury as a result of an accident or unforeseen event. Policies usually state that the holder is not covered if the death or injury is caused by “sickness, disease or any naturally occurring condition or process.”
Generally, personal accident insurance policies cover as standard:
- Permanent total disablement; and
- Loss of, or loss of use of, a limb.
Some policies also cover permanent partial disablement, temporary total disablement and/or temporary partial disablement. The amount of benefit payable varies from policy to policy, so the small print should always be read before taking on the policy.
Can I still make a claim for compensation following an accident?
The answer to that is yes, you can still make a compensation claim following an accident whether you hold a personal accident policy or not. To do this, you must satisfy the three legal requirements of the accident being not your fault, that it happened within three years of the start of the claim, and that your injury was caused as a direct result.
If you want to find out more about claims, call Accident Advice Helpline today on 0800 689 0500 form a landline, or 0333 500 0993 from a mobile.
Date Published: 10th March 2014
Author: Louise Thacker