Personal accident cover

Personal accident cover could provide compensation to you, your partner or even your passengers if they’re injured or killed in a car accident.

Some level of personal accident cover is usually included in comprehensive car insurance. If it’s not, you should be able to add it on to your car insurance policy or take out a separate policy.

Personal accident cover could provide compensation to you, your partner or even your passengers if they’re injured or killed in a car accident.

Some level of personal accident cover is usually included in comprehensive car insurance. If it’s not, you should be able to add it on to your car insurance policy or take out a separate policy.

Daniel Hutson
Motor insurance expert
minute read
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Posted 24 JANUARY 2020 Last Updated 8 JUNE 2022

What does personal accident insurance cover me for?

Personal accident insurance doesn’t usually compensate for minor sprains and breaks. And it won’t typically cover you for any psychological trauma you suffer as a result of an accident. Personal accident payouts are normally for ‘loss of' life or ‘loss of use of’ a part of your body, and the payment amount depends on the type of injury sustained.

The payment is meant to cover the expenses you incur because of an accident for specialist medical treatment and physical therapy. It can also help cover any lost future earnings if you or your partner are no longer able to work.

Insurance providers offer different levels of personal accident cover – also called personal injury cover. Some will cover multiple injuries, while others have larger amounts for single injuries. One thing almost all policies have in common, though, is that they’ll only pay up to a certain amount.

What should I look for when taking out personal accident cover

Before taking out personal accident cover, you need to consider who the policy covers, whether or not the cover extends to injuries that may occur outside of the UK, as well as the scope of the cover.

  • Who will the policy cover? Personal accident insurance may cover an individual, a couple or the whole family.
  • Where will I be covered? Will the policy only cover accidents that happen in the UK? Or will the insurance provider compensate for accidents that happen abroad as well?
  • What injuries will be covered? Will you get compensation if you lose your hearing? Or if you lose a finger or toe? Make sure you read the fine print.
  • What situations am I covered for? Are you covered for accidents that happen while waiting for help to arrive? Or getting in and out of your car?
  • How much am I covered for? Personal injury policies usually pay out a fixed lump sum for specific injuries – for example £8,000 for the loss of an eye, but the lump sum amount offered can vary greatly per provider, so it’s worth comparing a few options.

What can invalidate personal accident cover?

Your personal accident cover can be invalidated, under certain circumstances, for example, if: 

  • You have an accident while driving while under the influence of drugs or alcohol.
  • You’re driving without a valid licence.
  • You’re driving without wearing your seatbelt.
  • You’re taking part in rallies, races or speed tests.
  • The accident or injury has been self-inflicted or is death by suicide. 

In these instances, the insurance provider does not have to pay out any compensation.

Most personal accident policies specify that the injury must be “solely and directly” caused by an accident. They will typically have an exclusion for death or injury that’s been caused by sickness, disease or any naturally occurring condition. For example, a lower limb amputation resulting from diabetes would not count as an accident.

Do I get personal accident cover with my car insurance? 

If you have comprehensive car insurance or travel insurance, it may already come with personal accident cover. You can check this by reading through your insurance documents or contacting your insurance provider directly.

Should I consider taking out a separate personal accident insurance policy?

For the most comprehensive cover, it might be worth taking out a standalone personal accident insurance policy. 

If you don't have a separate policy, any cover you do have will potentially be an add-on or optional extra to a car insurance, or travel policy. Because of this, it may be more limited about when the cover applies and potential exclusions. For example, your travel insurance may only offer you cover while you’re on holiday and not year-round, or your car policy might cover you in a car accident but not any other kind of accident.

If you work in a risky occupation – for example, if you’re a farmer who uses heavy machinery or you work in construction – or have risky hobbies, such as rock climbing, sailing, mountaineering or horse-riding, having a standalone personal accident policy that covers these activities could give you peace of mind.

Add-ons can also be restrictive when it comes to who is covered. Some policies may only cover the policyholder and their partner, and they might not be as comprehensive as a standalone policy.

How much does personal accident cover cost?

Premiums for personal accident insurance depend on the level of cover chosen and other factors – such as your age, where you live and your claims history. So, ultimately, it’s up to you to decide what’s important and how much you’re willing to pay – whether you opt for a standalone policy or an add-on to a vehicle or travel policy.

When you compare car insurance quotes with Compare the Market, our easy-to-read comparison will show you whether personal accident cover is included. So, be prepared and compare car insurance in minutes.

How much will I receive if I have to make a claim? 

With personal accident cover, your policy will set out exactly how much you should get in a particular set of circumstances or for a type of injury, for example the loss of a limb, or your sight. For example you could be paid £10,000 for the loss of a leg in an accident. The money is paid out by your insurance provider. You will want to consider the level of cover when choosing your policy.

If the accident was caused by someone you may also be able to take them to court and sue them for compensation for the injury caused to you – separately from your insurance claim.

What is the personal injury discount rate and how does it affect personal injury claims?

Compensation paid out in personal injury claims is intended to make sure that the person making the claim (the claimant) is put in the same financial position they would’ve been in if they hadn’t had a life-changing injury. It’s calculated to cover any costs involved in the recovery, from the injury to any long-term care – including loss of future earnings, treatment and future care costs.

If the claimant’s personal injury claim succeeds, they’re usually paid a lump sum. The claimant is expected to invest that amount to cover their future needs. The discount rate adjusts the amount of compensation paid out to take account of inflation and interest rates that could affect the investment over time.

The discount rate is also known as the Ogden rate. It’s set by the UK Government, specifically the Lord Chancellor and Ministry of Justice, and is applied consistently across personal injury claim calculations.

The discount rate is linked by law to the lowest rate investments, on the assumption that claimants wouldn’t want to put their compensation at risk. If the discount rate is set too high, a claimant could lose out because the value of their compensation would not keep up with inflation. On the other hand, if the discount rate is set too low, the claimant could end up with a larger compensation payout over time than intended.   

The discount rate in 2022 is -0.25% in England and Wales, -0.75% in Scotland and -1.75% in Northern Ireland. Before March 2017, the discount rate was considerably higher, at 2.5%, but it was lowered to reflect falling interest rates.  This lower discount rate benefits claimants, but it means that insurance providers are having to pay out more in compensation claims, which in turn may mean higher car insurance personal accident premiums.

How do I make a personal accident car insurance claim? 

You or your representative should notify your insurance provider about the accident as soon as possible.

Your insurance provider will advise you about the next steps in the claims process, but it’s important to keep copies of any evidence or documentation you may need to support your claim. You should also keep any receipts for expenses you’ve incurred as a result of the accident.

Your insurance provider will check to make sure that the claim is valid under the terms and conditions of the policy, for example, you weren’t driving under the influence of drink or drugs and that you were wearing a seatbelt. If you’ve broken these terms then your insurance provider won’t pay your claim.

If you want to make a claim for compensation against whoever caused the accident, this is a separate matter and you’ll need to take specialist legal advice. If you have legal expenses cover talk to your provider and explain your situation.

Read our guide to find out more about the car insurance claims process or find out what you can do if your claim is rejected.

Frequently asked questions

Will I get personal accident compensation if a car accident was my fault?

If the car accident wasn’t your fault, then the driver at fault’s car insurance policy should pay out for any personal injury compensation claims. If you were at fault for the accident and you have personal accident cover with your car insurance policy, you should be able to claim for the policy benefit amount – so long as your injury or loss qualifies under the terms of your insurance and you didn’t break any of the conditions of your cover by, for example, driving while under the influence or not wearing your seatbelt.

Do I need personal accident cover on my car insurance policy?

It’s not mandatory, but it could provide peace of mind that you have financial backup to help take care of your family should the worst happen or an injury prevents you from returning to work. It could help pay for sophisticated prosthetics if you lose a limb or adaptions to your home if you become a wheelchair user, for example.

In the UK, we’re lucky to have the free healthcare provided by the NHS, as well as an Employment and Support Allowance (ESA) to help those with illness and disabilities who are unable to work. However, you’ll currently get a maximum ESA of £117.60 per week. The compensation from a personal accident insurance claim could help with a cash payout, typically in the range of £2,500 to £10,000 – but you can opt for higher levels of cover up to £100,000, however you’d probably be paying higher premiums for this higher level of cover. 

To decide if personal accident cover is a good choice for you, ask yourself:

  • Do you have any income protection or life insurance policies already in place that could help you cope financially if an accident prevented you from returning to work for an extended period of time, or if you or your partner were killed in an accident?
  • Have you got enough savings in place to cover expenses and outgoings if you’re unable to work because of an injury sustained in a car accident?
  • Can you afford to pay for a standalone personal accident policy? Could you add on personal accident cover to your car insurance? Or would you get a better deal if you opted for comprehensive car cover instead?

What types of injuries will car personal accident insurance cover?

It depends on your policy, but most personal accidents will cover the following:

  • Losing one or more of your limbs (if they have to be amputated)
  • Losing the use of your limbs (due to paralysis)
  • Total disableme
  • Permanent blindness in one or both eyes
  • Death.

Some car personal accident policies may also offer a higher level of cover for injuries, such as:

  • Losing your hearing
  • Losing your speech
  • Losing fingers or toes
  • Burn damage and scarring.

However, this level of cover doesn’t come as standard and will likely come at a higher cost. Read the terms of any policy carefully before you buy and compare what’s out there to find the right cover for you. 

If I don’t have car personal accident cover can I still claim compensation for injuries sustained in a car accident?

Yes, even if you don’t have personal accident cover, you still have the right to claim compensation for personal injury through legal action –if the accident wasn’t your fault . You’ll need to get legal advice as soon as possible after the accident as there are strict time limits in place for claims. Pursuing a personal injury claim through the courts can be expensive though, which is why some people prefer to make sure they’re covered in advance. Legal expenses insurance could help you here if you have it included in your car policy.

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