Accident Cover – Car Insurance

Accidents are dangerous and can cause permanent damages to your life and therefore it becomes important to prepare yourself against any mishaps. But then how would you prepare yourself for any unforeseen eventualities? Take a look at this two-minute read to ensure an uncomplicated solution.

Accidents cause physical damages to your car. They can also leave emotional scars. And sometimes, more than that — they can cause injuries to you, your driver, another person or even your family and friends riding in the car.

But you can protect yourself, at least financially, from such unfortunate incidents by adding an Accident Cover to your car insurance.

Accident Covers Are Mandatory

Imagine if you are stuck in traffic and are getting late to work. You realize the jam has been caused by a young man fighting with a car driver about an accident.

It turns out that the car had injured the young man’s elderly uncle. The injuries were serious and could lead to some disablement too. The young man was desperate and right in fighting for a justified compensation.

A lot of such accidents happen on Indian roads. To avoid problems caused by such accidents, the government came up with the Motor Vehicles Act, 1988. It made ‘Third-party’ car insurance mandatory. No person can drive a car without insurance.

Third-party Car Insurance Policy protects any damage caused to the third person or property on road. Benefits paid under Third Party Liability cover are

  • No limit on the compensation the insurer pays in case of personal injury, disability or death.
  • Third party property damage up to Rs. 7.5 Lacs
  • Personal Accident cover for owner driver, passenger, paid driver or employee

So does it cover injuries caused to the driver during an accident?

Generally, Third-party policies are often bundled with a ‘Personal Accident’ cover. It is a mandatory cover for the owner driver which is available at a nominal fee. So, if you suffer injuries due to an accident while driving your own car, the insurance company will pay a fixed amount as compensation.

Below are the conditions while buying a PA cover for Owner Driver

  1. The owner-driver has to be the registered owner of the car insured
  2. The owner-driver has to be the insured named in the car insurance policy
  3. The owner-driver has to hold a valid driving license

What If I Have A Paid Driver?

Quite a valid point, actually. In fact, under the Workman Compensation Act, you are liable to pay compensation to an employee in case of injury or accident while at work.

Insurance companies understood this need. And that’s why they offered a separate add-on cover called ‘Accident cover for paid driver’. An additional amount of Rs. 50 has to be paid as an add-on in order to buy a Legal liability cover for the paid driver.

Under this cover, the insurer pays compensation to your driver in case of any injury, disability or even death. You can, thus, ensure your driver is protected too. During any accident-related injuries or death of the paid driver, the insurance company pays a specific compensation. Legal Liability to the paid driver comes under the Workmen’s Compensation Act, 1923, Fatal Accidents Act, 1855 and Common Law.

What About My Family Riding In The Car?

You can cover them too. In this case, you buy an add-on called ‘Personal Accident cover for unnamed passengers’. This extends to your family, friends or even colleagues—whoever travels with you in your car. You can get these add-ons when you buy a Comprehensive Car insurance policy at a small extra payment.

You can opt for a sum insured in multiples of Rs. 10,000, like Rs. 20,000, Rs. 30,000 till Rs. 2,00,000. The cost of the add-on will start from Rs. 5 to Rs. 100 per passenger.

Accident Covers Of All Types

This means, there are essentially four different types of accident covers.

WhatWho Is CoveredWhich PolicyCompensation Limit
Accident CoverThird-party individual or peopleThird-party car insuranceNo limit
Personal Accident CoverOwner-driverComprehensive car insurance or Compulsory Cover in Third PartyRs. 2 lakh
Personal Accident Cover for Paid driverPaid driversOptional cover in Comprehensive car insurance or Third PartyAs per Workmen Compensation Act.
Personal Accident cover for Unnamed PassengersAnyone who is riding in the car along with the driverOptional cover in Comprehensive car insurance or Third PartyAs per sum assured up to Rs. 2 lakh.

Accident Cover In Car Insurance – What’s Covered?

By now, you must have already made assumptions that anything and everything is covered under a personal accident cover in car insurance. If you think so, let me get your conceptions clear. Here’s what’s covered under an accident cover in car insurance.

  • Accidental Death

The insurance company pays the entire sum insured to the insured’s beneficiary during an unfortunate event like death.

  • Permanent Total Disability

The insurance company is liable to pay the entire sum insured to the insured in case of any permanent total disability due to an accident.

 Compensation paid is as listed below:

BenefitsScale of Compensation
Death100%
Loss of two limbs or sight of two eyes or one limb and sight of one eye.100%
Loss of one limb or sight of one eye50%
Permanent total disablement from injuries other than named above.100%

Exclusions in Car Insurance Policy

Mentioned below are the exclusions in a car insurance policy:

  • Childbirth or pregnancy
  • Driving under the influence of alcohol, drugs or any intoxicants
  • Suicide or self-injuries
  • Pre-existing disabilities or injury
  • Participating in any hazardous activities, adventures or sports
  • Committing any criminal act
  • Suffering from any mental disorders

Claim Process for Car Insurance Policy

Considering the different types of coverage and compensation rules, it’s natural that the claim process will change too.

Third Party Car Insurance Claim Process:

  • Inform your insurer immediately after the accident. If someone else caused the damage, make a note of their insurance details.
  • File a First Information Report (FIR) at the nearest Police station. This is important for the entire claim process. The FIR report should state clearly who was in the wrong.
  • The case may be taken up at the Motor Accident Claims Tribunal Court, where the compensation amount will be decided.

Comprehensive Car Insurance Claim Process:

In case of any own-damage—either to the owner-driver, the paid driver or the passenger, then the insurer will pay the compensation directly. However, make sure you inform the insurer immediately after the accident. A FIR report at the Police Station may be required even in such situations.

Necessary list of documents and information to be furnished while filing the claim:

  • The insured’s name and contact number
  • The policy number
  • Date and time of accident
  • Location of the incident
  • Explanation of the incident occurred and extent of loss

The below documents are required in case of Accident related death/ disablement claim:

  • Death and post-mortem certificate
  • FIR report
  • Medical reports and hospitalization bills

The insurance company will then process the claim. It will conduct verification of the damage. You may have to submit medical reports that prove the injuries have been caused by the accident.

Once the insurer approves the claim, the due compensation will be paid.

Conclusion

So, you may have confidence on your driving skills. But, who knows that the person driving another vehicle may dash you and leave you with injuries that are irreparable. Apart from providing you with financial support, accidental cover in car insurance also safeguards you with an injury as minor as a scratch on your body to something as major as death or permanent disabilities due to accidents.

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