Personal Accident Cover (PA Cover) in Motor Insurance

Accidents can lead to severe damage and bodily injuries, and sometimes even loss of life. Who wants to fall prey to such incidents which not only bring financial stress but also create emotional havoc?

That is why everyone wishes to have a financial safety net in case of an accident, and the best safety net is the Personal Accident (PA) Cover in Motor Insurance. One can opt for it alongside comprehensive insurance policy and Third-Party Liability policy.

Read here to understand how PA Cover can provide peace of mind for you and your loved ones, how it works, and why it's important for car insurance and bike insurance.

Team Digit

What is Personal Accident Cover in Motor Insurance?

Personal Accident insurance coverage safeguards the owner or driver of the vehicle, unlike other insurance types which provide financial help for damage or loss of car parts or bike parts.

Personal Accident Cover in Motor Insurance provides financial assistance to the insured member in case of accidental death, bodily injuries, permanent partial or total disability, and temporary total disability, as a result of accident.

Also, in case the insured person dies of an accident, the nominee will receive 100% compensation from the insurer.

Is Personal Accident Cover Mandatory?

Yes, the Personal Accident (PA) Cover for the registered owner-driver of a vehicle has been made mandatory in India for all private vehicles given that the owner-driver has a valid driving license.

Alarming Road Incidents Statistics in India

According to the annual report by Ministry of Road Transport and Highways on road accidents in India in 2022, India has consistently reported a high number of road mishaps despite government’s increasing investments in road infrastructure.

Here are some noteworthy statistics:

The number of road accidents in 2022 was at an all-time high, witnessing an 11.9% increase from the previous year.
In 2022, 4,61,312 incidents of road mishaps were recorded, which led to the loss of 1,68,491 lives.

The number of people who died and the number of injured people also increased in 2022, by 9.4% and 15.3%, respectively.
As per the report, about 72% of total accidents and 71% total deaths in road mishaps in 2022 happened due to over speeding.
The data also shows that the hit-and-run cases contributed to 14.6% of the total road accidents and 18.1% deaths in 2022.

What is the Importance of Personal Accident Cover?

Imagine a speeding truck hitting the side of a car, hurting the driver. Many such unpredictable events can lead to loss of life or permanent disabilities. Therefore, in such situations, PA Cover comes in handy.

So, here's why Personal Accident Cover is important:

Financial Safety Net

If suppose you meet with an unfortunate accident damaging your car and injuring you. Then your regular insurance policy will cover the damage to the car and PA cover will help with the medical bills associated with your treatment, thus acting as your safety net.

Peace of Mind

PA coverage’s financial benefits in case of death or disability of the policyholder can be a lifesaver. It provides you and your family peace of mind by helping manage sudden financial burdens and cover immediate expenses.

Do You Need Separate PA Cover If You Own Multiple Vehicles?

No, you don't need a separate PA cover if you own multiple vehicles, as getting a separate PA cover for every new vehicle you buy would be too costly, right!

Which is why from January 2019, IRDAI has amended the Compulsory PA coverage, as per which people owning multiple vehicles can now buy a single standalone PA cover with a minimum Sum Insured of ₹15 lakhs by paying a fixed premium of ₹750. This means that a single PA Cover will provide coverage for all their vehicles.

So, if anyone has a standalone PA policy which covers them for ₹15 lakhs, they can get a waiver under the Compulsory Personal Accident Cover offered with motor insurance policy.

Also, check out our video on PA Cover, where the speaker – Akanksha Jain – Product Head, Motor, is simplifying personal accident cover and its importance:

What if You have a Paid Driver?

Now, if you are the owner of your car, you will be covered by the PA policy. However, if you have a paid driver who gets injured in an accident while driving your car, he/she will be covered under the PA policy (as an extended cover or as a standalone policy) as per the Workmen Compensation Act.

Remember that the driver must have a valid driving licence to avail this.

As per the Workman Compensation Act, the vehicle owner or the employer is liable to pay compensation to the paid driver in case of any injury arising due to work-related accidents.

Here are two ways to cover paid drivers under PA policy:

Extending PA Cover for Paid Driver

Some insurance companies allow you to add your paid driver to your PA coverage. However, you will have to pay an additional premium.

Standalone PA Cover

You can also get your paid driver their own standalone PA cover policy, which would specifically protect them financially in case of an accident.

What if You Have Passengers in the Vehicle?

Though the PA Cover Insurance covers the vehicle’s owner-driver, this add-on can be extended to other passengers in the car in case of accidents leading to their disability or death.

You can buy the extended cover for an additional premium. Also, the number of passengers in a vehicle that can be covered under this policy depends on the type of vehicle or seating capacity.

Additionally, if passengers have their individual standalone PA policy, then they would be covered under that.

What if Your Family Member is Driving Your Vehicle?

In case any of your family members is driving your vehicle, then they would NOT be covered under your PA cover insurance. However, they can be covered under an extended PA policy which you can purchase by paying additional premium.

You can also ensure the safety of your family members by getting them their own standalone personal accident coverage. This way they would be protected in case of any unfortunate accident leading to injury or death.

In case where you own multiple cars and one of the cars is driven by your paid driver and the other by a family member, then they would be covered under PA policy only if you have bought the extended policy for them, or if they have their own standalone PA coverage.

Here’s the PA coverage details for paid drivers/passengers/family members:

Coverage	%age of Compensation
Death	100%
Loss of 2 limbs or 2 eyes or 1 limb and 1 eye	100%
Loss of 1 limb or sight of 1 eye	50%
Permanent Total Disability	100%

What is Covered in Personal Accident Cover?

A PA cover insurance policy will pay for the compensation in case of bodily injuries, death or any permanent and temporary total disability resulting due to an accident. The limit of the coverage is defined as ₹15 lakhs by IRDAI.

Here is the percentage of compensation paid in different circumstances.

Favouring Accidental Death - The insurance company will pay the entire Sum Insured to the nominee in case of sudden death of the policyholder due to a road accident.

Favouring Permanent Disability - In the state of permanent disability, the compensation will be as follows:

Coverage	%age of Compensation
Death	100%
Loss of 2 limbs or 2 eyes or 1 limb and 1 eye	100%
Loss of 1 limb or sight of 1 eye	50%
Permanent Total Disability	100%

Optional Coverage

Apart from above compensation, some insurance companies also provide one or all the following benefits under the PA Cover:

Medical expenses for hospitalisation to treat injuries arising due to an accident, up to the limit of 10% of the base sum insured.
Some insurers also provide one-time education grant to the insured person’s child in case of accidental death or permanent total disability, if the child is not more than 25 years old.

What is Not Covered in Personal Accident Cover?

The policyholder will not receive any benefit under the PA cover in case of injuries or death caused due to:

War and invasion
Any act of terrorism
Intentional self-injury or suicide
Biological or chemical contamination
Influence of intoxicating drugs or liquor
Engaging in illegal activities
Participation as a professional in hazardous or adventure sports
Pre-existing disability or accidental injury
Childbirth and pregnancy

What is the Premium Cost for PA Cover?

IRDAI (Insurance Regulatory and Development Authority of India) has fixed a premium of ₹750 for bundled PA Cover of ₹15 lakhs for private cars and two-wheelers.

However, IRDAI has given the liberty to insurance companies to have their own PA Cover pricing structures for standalone policies - the premiums of which are based on risk and various other factors.

For example, if you travel daily in a metropolitan city, then your chances of meeting with an accident will be higher. Hence, your PA Cover premium will also be higher. Similarly, other factors like your age, occupation, risk level, sum insured, add-on riders, etc., also determine the premium cost for Personal Accident Cover in India.

What to Consider When Getting PA Coverage?

Here are some key factors that you must consider when buying a Personal Accident (PA) policy:

Your Requirements: First decide your risk appetite as younger individuals might prioritize higher sum assured, while older individuals might focus more on better medical expenses coverage.
Coverage: Determine if you need coverage based on your lifestyle. For example, if you travel a lot, you might need a PA policy with higher coverage as you are more prone to accidents.
Sum Assured: Choose a PA policy in which the payout amount in case of death or permanent disability can adequately cover your financial needs and liabilities.
Premium: Compare quotes from different insurers to find the best policy as per your coverage and budget requirements. Also, remember to consider the potential premium increase upon policy renewal.
Benefits: Consider a policy with benefits like medical expense coverage, temporary disability benefits, and accidental death benefit, or which offers optional riders like hospital daily cash allowance, etc.
Claim Process: Compare and choose an insurer with a good claims track record.
Policy Wording and Exclusions: It is crucial to carefully read the policy wording and review all the inclusions and exclusions before paying.

What are the Benefits of Personal Accident Cover?

Life is unpredictable and so are accidents. Hence, you need a Personal Accident Policy that comes with several benefits including:

Medical Bills: PA Cover helps cover medical bills associated with hospitalization, surgery, or rehabilitation due to injuries arising because of accident.
Death Benefit: If an accident turns out to be fatal, the PA Cover acts as a financial cushion and offers a lump sum payout to the insured person’s family. This helps cover immediate expenses and manage sudden financial burdens.
Disability Benefit: In case of permanent disability due to an accident, the PA Cover provides financial support for home modifications or special equipment, as per the policy.
Income Support: PA Cover also provides some financial support in case there is no source of income. This may happen when the policyholder cannot work due to injury or disability caused by accident.
Educational Support: Some Personal Accident policies may also cover educational benefit for the policyholder’s children, given they are dependent and under 25 years old.
Flexible Coverage: Often PA Cover allows you to choose a higher sum assured or additional riders as per your specific needs.
Peace of Mind: PA Cover is a valuable investment that offers financial security in case of unforeseen accidents and, hence, provides peace of mind for you and your loved ones in financial emergencies.

Why Should You Buy PA Cover with Digit?

Buying a PA Cover with Digit comes with the following benefits:

Coverage Against Accidental Risks – Digit's PA Cover offers a financial safety net in case the policyholder suffers injuries or disabilities or dies due to accident. It pays out a lump sum benefit as per your chosen coverage.

Legal Compliance- By having a Standalone PA policy, you also comply with the laws, failing which you might have to pay or face penalty.

Coverage for Permanent Disability – The policyholder gets financial protection with Digit’s PA Cover if he/she suffers from permanent disability due to accident as per the following:

Coverage for Temporary Disability – Digit PA Policy does NOT provide financial coverage if the policyholder suffers from temporary disability due to accident.

Paperless Process – At Digit, we offer hassle-free, quick and paperless claim process for PA policy. Therefore, you can file a claim without any need for the documents.

Coverage	%age of Compensation
Death	100%
Loss of 2 limbs or 2 eyes or 1 limb and 1 eye	100%
Loss of 1 limb or sight of 1 eye	50%
Permanent Total Disability	100%

How to Claim?

The claim under the Personal Accident Policy as a part of Motor Insurance can be claimed by the owner-driver or nominee of the respective four-wheeler or two-wheeler. The policy’s aim is that the nominee or the surviving owner fetches the maximum benefits (as mentioned in the policy).

To retrieve benefits of the PA cover during an accident where the owner-driver has been injured, one needs to file a claim. Following are the instructions to make one:

Intimate the insurer about the incidence and resulting loss.
Ask for an FIR followed by FR. It will be one of the most important documents needed for processing the claim. If possible, arrange for the witnesses who can approve of the occurrence of a claim.
Complete the formalities with the insurer, that includes filling in the claim form, provide photographs of the car accident (if applicable). In the case of Digit, all these processes can be easily completed online on our Digit app.
Submit all the documents online and wait for the insurers to verify the details.

In the eventuality of death of the owner-driver, the nominee will file the claim. She/he will

Disclaimer: The summary of the product specified here is only for reference purpose. Details of coverages available shall be as described in the policy schedule and will be subject to the policy terms, conditions and exclusions only.

FAQs about Personal Accident Cover in Motor Insurance

All

Is PA cover mandatory for two-wheelers?

Yes, a Personal Accident cover is mandatory for all private two-wheelers. The same can be bought along with your two-wheeler insurance policy.

How much PA Cover is mandatory in India?

In India, all car owners are required to have a valid Personal Accident cover of ₹15 lakhs as fixed by IRDAI.

How do I know if I am eligible to buy a PA cover?

If you own a vehicle in India, hold a valid driver’s licence, and are in the age group of 18 to 65 years, then you can buy the personal accident cover in bike insurance and car insurance.

I have a car and bike in my name, do I need to buy PA cover separately for both the vehicles?

No, one PA cover is sufficient for all vehicles you own as per the new amendments effective from January 2019. The PA cover is associated with you as an individual, and not with your vehicles.

Is Personal Accident cover good?

Yes, Personal Accident covers you, the vehicle owner, financially and helps you and your family in any emergency. It also provides peace of mind in unfortunate situations, making it a crucial part of insurance policy.

Does PA insurance cover my spouse or children who might be passengers in the car?

No, PA insurance doesn’t cover passengers or pillion rider. However, some insurance companies allow you to extend the coverage to them by paying extra premium, or passengers can get their own standalone PA Cover. The coverage or number of members covered usually depends on the type of vehicle or seating capacity.

Is there a waiting period before I can avail of PA Cover benefits?

Generally, PA policy does not have a waiting period; however, some insurance companies may have a short waiting period of usually 30 days before coverage benefits kick in. So, it’s always best to check your specific policy details beforehand.

Who gets the PA Cover compensation?

Generally, PA add-on provides compensation to the nominee or surviving members of the policyholder in case of death. In case of injury or disability due to an accident, the PA Cover payout will be made directly to the policyholder.

What documents do I need to file a claim under PA Cover?

The required documents can vary, but generally include a copy of the FIR, policyholder’s medical records, hospital bills, death certificate (if applicable), and proof of disability (if applicable). Check with your insurance company for more specific documents, if required.

What is the validity period of the PA Cover?

The Compulsory Personal Accident (CPA) cover is a standalone insurance cover, and it is valid for 1 year.

What if I don’t have a PA Cover? Will I face any penalty?

Yes, if you don't own a PA Cover which is mandatory by law, you will have to pay a fine of ₹2000 for the first offence and ₹4000 for the second offence, as per the updated Motor Vehicles Act 2019. You might also get imprisoned upon further offence.

Can I buy PA Cover separately if it is not included in my policy?

Yes, you can buy a Personal Accident (PA) Cover separately as a Standalone policy if you don't have it as an add-on in your car or bike insurance policy.

Is PA Cover applicable only to vehicle owner-driver?

Yes, Compulsory Personal Accident (CPA) insurance is mandatory for vehicle owner-drivers in India. However, the cover can be extended to paid drivers and passengers by paying additional premium.

Can I cancel one PA Cover if I have two PA Covers?

Yes, you can cancel; however, check your policy documents beforehand and remember that Standalone PA policy is mandatory is mandatory by law.

Can I have more than one PA Cover under the same owner's name?

Yes, you can have PA as an add-on with your car/bike insurance policy and then can buy another as a Standalone PA Cover if you want. However, only one PA Cover is required to cover all your vehicles, as per the latest mandate by IRDAI.