Why Holding Personal Accident Insurance Is Mandatory?

Both securing a valid license and purchasing personal accident cover (PA cover) are mandatory for vehicle owners in India. As per the Motor Tariff 2002, vehicle insurance plans had to include personal accident insurance mandatorily.

However, in January 2019, the IRDAI unbundled the PA cover from vehicle insurance plans. This means the IRDAI now permits you to purchase a separate personal accident cover policy for coverage against accidental risks while driving your vehicle. You can purchase this cover for all types of vehicles, including two-wheelers, taxis, private cars, and commercial vehicles (like trucks and buses).

Through this initiative, the IRDAI aims to reduce the overall cost of ownership of a vehicle. This move was taken because the IRDAI earlier had raised the compulsory personal accident cover from Rs 1 lakh to 15 lakh, thereby burdening vehicle owners.

Personal Accident Cover: a Note

Personal accident insurance cover (PA cover) protects the owner of an insured car against accidental injuries. This add-on cover provides compensation in cases of the car owner suffering permanent disability, body injuries, and even death, as a result of a car accident. The car owner is reimbursed if they get injured in a car accident.

In cases of death because of a car accident, personal accident insurance compensates up to 100% of the sum assured. On the other hand, where disability is concerned, the compensation is calculated as per the degree of disability – permanent or temporary.

Having Personal Accident Insurance Is Mandatory For Owner-Drivers

In India, car owners have to get personal accident cover. As a policyholder, you can purchase this add-on cover by paying extra on the insurance premium of your comprehensive car insurance policy or third-party car insurance policy. Please note that if you do not have PA coverage as part of your car insurance plan, you are liable for legal punishment as per laws in India.

Premium Cost Of Personal Accident Cover

The premium of personal accident insurance of Rs 15 lakh is pegged at Rs 750. As per the IRDAI mandate, this premium amount is applicable for PA cover of bundled insurance policies for all vehicles.

Nonetheless, the IRDAI allows motor insurance providers to fix the premium for unbundled PA cover or standalone PA cover. This means that the premium amount of PA cover for unbundled and standalone covers can go higher. Hence, opting for a bundled car insurance policy is beneficial if you do not have personal accident cover. Conversely, purchasing a standalone personal accident insurance cover can be expensive.

What Does PA Cover?

Depending on your chosen benefits, the scope of your insurance policy is determined. The basic coverage of this type of insurance includes death benefits. As part of comprehensive accident cover, the beneficiaries receive coverage for temporary total disability, permanent total disability, permanent partial disability, and death.

Aspects To Consider When Purchasing PA Cover

When getting a personal accident cover, you must ensure it includes all daily activities leading to accidents at both home and office. And, as much as possible, go for wider coverage plans. Always opt for an insurance that includes permanent disability, broken bones, accidental death, and burns due to accidents.

Studying the claim settlement record of your insurance provider is also important. In addition to that, PA cover must include ambulance and hospitalization costs. Some insurance plans provide coverage for your overseas trips, too. Besides, consider the amount the nominee is entitled to in cases of permanent disability or death.

What A PA Plan Does Not Cover?

A personal accident policy does not cover death by suicide, war, criminal intent, consuming intoxicating substances, pregnancy, and war.

Conclusion

By unbundling personal accident cover from vehicle insurance plans, car owners no longer have to purchase this coverage when insuring every vehicle they own. As per this new IRDAI mandate, vehicle owners can purchase PA cover only once.

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Created on Dec 28th 2022 22:17. Viewed 140 times.

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