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Should you take a personal accident insurance policy?

Personal accident insurance is a policy that provides compensation in to the insured or his/her family members in case of death or disability due to an accident. Accident is an event which is sudden, unforeseen and involuntary event caused by an external, violent and visible means. The insured pays certain amount as premium towards the personal accident cover and in turn the insurer pays the compensation in case of any event such as death or disability.


Personal accident insurance policy provides compensation only in the case of accidental death or disability. The premium charged for personal accident insurance is quite less compared to other insurance policies.

Death/ disability due to natural causes is not covered under personal accident insurance

Mr. Karun works in a FMCG company in the sales department, his duties include visiting grocery shops and pitching company products. He is married with two kids and is the sole bread earner in the family. His company provided him Health insurance as well as life insurance; health insurance included his family as well. One of his friend working in insurance sector advised him to take a personal accident insurance as well to cover his life against death and disability.

One bad day when he was driving to work he met with a serious accident and was admitted to a hospital. Due to the severity of the accident doctors amputated both his hands and he was in ICU for a considerable period.

The hospital bill was covered by his company under the group health insurance taken by his organization. After discharge from the hospital he was in dilemma about his work continuity with the organization, as his work involves travel and he is in no situation to travel. This made him think of his future and search for a job immediately as he was into sales and the job involves travel which is difficult for him to do.

He remembered that he had purchased a personal accident policy and made a claim under it with the insurance company. Since he suffered a permanent total disability, he was paid the sum insured in full by the insurance company. With this financial assistance from his insurance policy, he set up a small business to feed his family.

Had he not taken the personal accident policy, he would have faced a financial crisis as he was out of job due to his inability to perform his duties.

Compulsory Personal Accident in Motor Insurance:

As per the IRDA mandate it is compulsory to have a personal accident cover of Rs.15 Lac with any motor insurance policy.

The cover under the personal accident policy in motor insurance is provided to the Owner-driver whilst driving the vehicle including mounting into/ dismounting from the vehicle or travelling in the insured vehicle as co-driver.

You can opt out from buying this cover under the following conditions:

  • You have a valid personal accident insurance policy of at least Rs.15 Lacs Sum insured.
  • You have a valid personal accident insurance policy for your other vehicle with Rs.15 Lacs Sum Insured.

The scope of cover under the personal accident insurance in motor insurance is as follows:

Type of vehicle Cover

Two wheelers,
Private Cars &
Commercial vehicles
(Third party only & Comprehensive Policy)

  • 100% of CSI for Death, Loss of Two Limbs or sight of both eyes or one limb and sight of one eye.
  • 50% of CSI for Loss of one Limb or sight of one eye.
  • 100% for Permanent Total Disablement from injuries other than named above.

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