Compulsory Personal Accident Cover
Compulsory personal accident (PA) cover is a mandatory component of a car insurance policy that provides financial compensation to the car's owner-driver in the event of an accident. It offers coverage for bodily injuries, disabilities, and death resulting from road accidents.
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What is the Personal Accident Cover in Car Insurance?
Personal accident cover is an add-on in car insurance that offers a pre-aggreed sum if the owner-driver suffers an accidental death or a permanent total or partial disability. The payout under this cover is as follows:
Under the personal accident cover, the payout amount is predefined in the policy terms & conditions and not linked to actual medical treatment costs. You can opt for the PA cover in car insurance with a third-party or comprehensive plan for a little additional premium.
Why is the Personal Accident Cover in Car Insurance Important?
Since an accident can impact both health and income, it can be tough to manage everyday expenses. The personal accident cover in car insurance ensures that the insured or their family members can cope better during these challenging times. Here is how it helps:
- Offers financial support during critical situations
- Helps manage expenses if earning ability is affected
- Supports dependents in case of unforeseen events
What is Included Under the Personal Accident Cover?
Besides providing the payout in the event of accidental injury or death, the PA cover in car insurance also offers financial compensation in the case of:
- Loss of both limbs or sight of both eyes, or one limb and sight of one eye
- Loss of one limb or sight of one eye
- Permanent total disability due to injuries other than those mentioned above
Compensation Under the Personal Accident Cover for the Owner-Driver
Currently, the IRDAI has fixed the personal accident compensation of Rs. 15 lakh following an order from the Madras High Court in September 2018. The details of compensation offered under PA cover for owner-driver and passengers as per the nature of bodily injuries are given below:
| Nature of Injury | Scale of Compensation |
|---|---|
| Death | 100% |
| Loss of both limbs or eyesight of both eyes OR Loss of one limb and eyesight of one eye | 100% |
| Loss of one limb OR eyesight of one eye | 50% |
| Permanent disability from injuries other than mentioned below | 100% |
How Much Does the Personal Accident Cover Cost?
Presently, the premium for the personal accident cover in car insurance is fixed at Rs. 750 by IRDAI under the bundled policies for all types of cars. However, motor insurance companies can decide the premium for unbundled or standalone personal accident cover, which can be higher. Therefore, opting for a bundled car insurance policy is beneficial if you don't own a personal accident cover. Buying a standalone personal accident cover can turn out to be expensive for you.
What is Not Covered Under the Personal Accident Cover?
The PA cover in car insurance excludes the following situations:
- Driving under the influence of alcohol or drugs
- Self-inflicted injuries or suicide
- Involvement in illegal activities
- Incidents not listed in the policy terms & conditions
When Can You Skip the Personal Accident Cover?
As of 1st January 2019, the IRDAI unbundled personal accident cover, allowing car owners to skip buying it if they already have one. Let us break it down for you.
Earlier, personal accident cover came as an in-built component of a car insurance policy. As a result, car owners had to purchase a PA cover each time they bought car insurance for a new car, in addition to the existing car(s). This led to multiple PA covers providing the same coverage, but at an additional premium.
Noting this unnecessary cost borne by owners of more than one car, the IRDAI decided to unbundle personal accident cover from car insurance, allowing people to buy the cover only once.
PA Cover in Car Insurance for the Paid Driver or Passengers
What if you have hired a paid driver to take you around, and he gets injured in an accident? Well, there are guidelines for paid drivers, too.
As per the Workman Compensation Act, the owner of the car or the employer is liable to pay compensation to the driver in case he gets injured in an accident while driving his/her employer's car.
To help you combat such a situation, motor insurance companies offer personal accident cover for paid drivers as an add-on cover. Your insurer will cover any liabilities to your paid driver under this cover. However, you will be required to pay an additional premium to buy PA cover for your car insurance.
Similarly, a car owner can protect passengers from accidental injuries by opting for Passengers Cover at an additional premium. This premium under the Personal Accident Cover varies depending on the car's seating capacity.
The details of the additional covers offered for paid drivers and passengers are given in the table below:
| Persons Covered | Premium | Compensation |
|---|---|---|
| Paid Driver | Rs. 50 | As per the Workmen Compensation Act |
| Passengers | Rs. 50
Rs. 100 |
Rs. 1,00,000
Rs. 2,00,000 |
How to Claim the Personal Accident Cover?
A claim for personal accident cover can be made by either the owner-driver or the nominee by following these steps:
- Inform the insurer about the incident and the resulting loss.
- File a Police FIR and request a Final Report (FR).
- Fill the claim form, provide the necessary documents, including incident photographs, to the insurer for successful claim processing. If possible, gather witnesses who can confirm incident details.
- In the unfortunate event of the owner-driver's death, the nominee has to file the claim. After the claim approval, the nominee will receive the claim amount as per policy terms and conditions.
FAQs About Compulsory Personal Accident Cover
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Is it mandatory to buy a CPA cover in insurance?
Yes, as per the India Motor Tariff 2002, it is mandatory to purchase a personal accident cover. The car owner can purchase CPA cover with third-party insurance as well as comprehensive car insurance. -
Can I buy personal accident cover separately?
Yes. You can purchase a standalone personal accident cover, even if you have it in your motor policy. It offers a higher sum insured to owner drivers than the mandatory CPA cover in car insurance. -
Is there a personal accident cover for the paid drivers?
Yes. As per the workman compensation act, the car owner or the employer is liable to pay compensation to paid drivers if they get injured in an accident. -
Does personal accident cover provide compensation to the surviving family members of the policyholder?
Yes. PA cover compensates to the surviving family members if the policyholder dies in the accident. -
How much coverage amount is paid under CPA in insurance?
An amount of Rs. 15 lakh is paid under personal accident cover. You can also opt for higher coverage with the add-on. -
What are the documents required for a personal accident cover claim?
When you raise a claim for personal accident cover, the following documents are necessary for a successful claim processing:
- Policy number
- Name and contact information of the insured
- Date, time, and location of the accident
- Incident details and the extent of the loss
- Police FIR and Final Report (FR)
- Death and post-mortem certificates (if applicable)
- Medical reports and hospitalisation bills
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Is the maximum compensation in PA cover capped at Rs. 15 Lakh?
Yes. The IRDAI has fixed the maximum personal accident cover compensation to Rs. 15 Lakh. But you can opt for higher compensation in multiples of Rs. 1 Lakh or Rs. 5 Lakh by paying an additional premium.
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