Personal Accident Insurance

Personal Accident Insurance

Personal Accident insurance provides coverage in case of accidents causing injuries to the insured. If such injuries result in the insured being hospitalized, the insurance company will be responsible for the insured's medical expenses, or will pay the insured compensation for loss of limbs, disability or death.

What types of accidents are covered by the insurance? What are the differences between policies?

Accident insurance can be categorized into three types of policies:
  • Personal accident insurance policy: used exclusively to insure one person.
  • Group accident insurance policy: used for a select group of people, such as employees of a company or organization.
  • Accident insurance policy for students: used for students. This type of insurance is prepared by the respective academic institution.

What are the coverage options for accident insurance?

For personal and group accident insurance policies, there are two available coverage plans:
  • PA 1 offers 4 optional coverages as listed below:
    1. Death, loss of organs/eyesight, permanent disability;
    2. Temporary disability;
    3. Partial temporary disability; and
    4. Medical expenses.
  • PA 2 Covers:
    1. Death, loss of organs/eyesight, hearing, the power of speech and permanent disability;
    2. Temporary disability;
    3. Partial temporary disability; and
    4. Medical expenses.
For student accident insurance, only PA 1 is available. Accident insurance usually covers murder or physical attack, regardless of whether such murder or physical attack is intentional or not. However, if the insured believes there is no risk of murder or attack, he/she can opt-out of this section of the insurance and receive a discount on the premium.

What are insurance exclusions?

Accident insurance is intended to cover only risks that are basic to the general population. For this reason, there are exclusions specified in the policy for certain events that shall not be covered, such as:
  1. Actions of the insured while under the influence of alcohol or drugs;
  2. Suicide, suicide attempts or self-inflicted injury;
  3. Miscarriage;
  4. Wars, coups, rebellion;
  5. Riots, strikes, or chaos caused by public protests against the government;
  6. Radiation or radioactivity from nuclear fuel and nuclear weapons;
  7. Taking part in dangerous sports, such as diving, bungee jumping, skiing, car racing, boat racing, skating competitions, etc.;
  8. While riding a motorcycle or traveling by motorcycle;
  9. While traveling by an aircraft that is not a commercial aircraft, such as a helicopter;
  10. Engaging in a brawl, committing a crime, or escaping arrest;
  11. Engaging in suppression of warfare operations if the insured is a soldier, police officer or volunteer.

Can an insurance exclusion be modified?

If the insured wishes to be covered under the events stated in the exclusions, one can pay an additional premium for extended coverage. However, a request for extended coverage shall be granted for the following five cases:
  1. Riding on a motorcycle or traveling by motorcycle;
  2. Riots and strikes;
  3. War;
  4. Traveling by an aircraft not operated by commercial airlines;
  5. Taking part in dangerous sports.

What factors are the insurance premiums based on?

A personal accident insurance premium is based on the following factors:
  • Group of people Group insurance is cheaper than personal insurance - the more people, the cheaper the insurance premiums.
  • Occupation Occupations are classified into four tiers, which are: Tier 1 - Occupations mostly requiring work in an office. Tier 2 - Occupations that require working outdoors at all times. Tier 3 - Technicians in manufacturing processes where heavy machinery is used; or laborers or others who need to regularly travel or work outside their office. Tier 4 – Special occupations with higher risks than other tiers of occupations, such as acrobats. Tier 1 has the lowest risk, so the insurance premium is lower than for other tiers. Tier 4 has the highest risk, so the premium is higher than the rest of the tiers.
  • Age People over 60 will pay a higher premium rate than people below 60.
  • Selected Coverage The insured may choose to purchase only specific coverages, such as coverage for death, loss of organs, and disability, only if opting-out of coverage for medical expenses. The premium will vary based on the required coverage.
  • Additional coverage If the insured wants to extend coverage to the hazards that are excluded, such as riding a motorcycle or traveling by motorcycle, taking part in dangerous sports, traveling by helicopter, riots/strikes and wars, the insurance premium will be higher.
  • Sum Insured An insurance premium will also vary based on the sum insured. Therefore, if medical expense coverage is purchased, a suitable sum insured must be determined. If more coverage is purchased than is necessary, the insured will be unnecessarily required to pay an excess premiums.
  • Determination of First Loss If the insured consents to being liable for first loss for medical expenses, the insurance premium will be lowered. If the insured consents to allow the company to desist from paying out benefits for temporary disability during the first weeks, the insurance premium will be lowered.

If an accident occurs based on conditions of the insurance policy, how should the insured proceed to get claim payments?

When the insured is in an accident, he/she must immediately report the accident and submit evidence such as medical expense receipts, medical reports, police reports, death certificates, etc. to the insurance company.