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What is personal accident insurance?

Personal accident insurance can help support you following various accidental injuries and we're going to explain exactly how this cover works

A photo of Grace Lynch, the author

By Grace Lynch

Published on: 9 June 2022

6 min read

What is personal accident insurance?

Everyone has heard that saying ‘accidents happen’. It is a common saying here in the UK and it really is true.

Serious accidents are far too common in this country and can leave people badly injured or worse. It’s likely that even if you’ve never been involved in an accident like this, you probably know someone who has.

Personal accident insurance can help support you and your family following a variety of different accidental injuries and we are going to explain exactly how this cover works.

Stay up to date with the latest updates in personal accident insurance.

Personal accident insurance explained

To begin with, we’re going to cover the main question ‘what is personal accident insurance?’. It’s possible you’ve never heard of this type of policy, or you have but you don’t understand exactly what it is.

It can also be confused with standard income protection insurance, and while it is a similar policy there are some important differences to be aware of.

The key facts about personal accident insurance are:

  • Personal accident insurance can provide financial support if you are injured in a serious accident
  • Will pay you one cash lump sum payment when you claim
  • You can only claim for injuries that have happened because of an accident
  • It is similar to standard income protection insurance, but with most policies you can’t claim for sickness as you can with income protection
  • Personal accident insurance can sometimes be included with other policies such as car insurance (will only cover you if you are injured in a car accident in this case)
  • You can’t claim for injuries that happen as a result of a medical condition e.g. a fall caused by symptoms of Parkinson’s Disease

The main concern for anyone buying an insurance policy is what exactly their policy covers them for. You don’t want to try and make a claim only to find you’re not covered for something when you thought you were.

Generally personal accident insurance will cover any injuries that have happened because of an accident. They will also provide a lump sum pay out if you were to die as the result of a serious accident.

This includes accidents such as:

  • Car accidents
  • Motorbike accidents
  • Other road traffic accidents
  • Trips and falls
  • Loss of limb
  • Accident or injuries at work
  • Permanent disability
  • Broken bones/fractures

One of the good things about personal accident insurance is that there are a few different options for cover.

There are 3 main types of personal accident insurance:

  • Accidental death insurance: pays out a lump sum if you were to die as a result of an accident (accident is a direct cause of death)
  • Accidental permanent injury insurance: will pay out a lump sum for serious permanent injuries caused by an accident e.g. paralysis or loss of limb
  • Family personal accident insurance: the most comprehensive cover of the 3 options that will pay out for death, permanent injury or hospitalisation due to an accident.

Value for money will be key for most people when it comes to choosing a new insurance policy. Often personal accident insurance can be very affordable. It will usually be a lower cost option compared to traditional income protection insurance, which is useful if you’re on a tighter budget.

How much you pay will depend on various factors including:

  • Your age
  • Height and weight
  • The type of personal accident insurance
  • The amount of cover you choose
  • The insurance provider you choose

Benefits of personal accident insurance

Many personal accident insurance policies will include extra benefits on top of your standard cover. Some of these might be included as part of your main policy, but you may have to pay a little more to add certain things.

These benefits can include things such as:

  • Broken bone cover
  • Accidental death benefit
  • Funeral benefit
  • Accidental permanent injury benefit
  • Hospital stay cover
  • Children’s cover
  • Active lifestyle cover
  • Healthcare cover
  • Access to GP services
  • Well-being and mental health support

Pros and Cons of personal accident insurance

ProsCons
Cost effective form of income protection (can cost as little as £5 a month)Many policies won’t cover you for illness (traditional income protection insurance does)
Pay outs can support you with expenses like household bills, mortgage/rent payments and medical expensesWill usually only cover you for up to 5 years
With most policies you can claim more than once, helpful if you were to be injured again a few years down the lineOnly pays out one lump sum (traditional income protection insurance pays out regular payments)
You can add optional extras like children’s cover, active lifestyle cover and more.Doesn’t cover injuries/disabilities that happen as a result of a medical condition e.g. amputation or sight loss due to diabetes complications

If you own your own business, you might want to offer extra benefits as an added bonus for your employees. Lots of workplaces choose to offer insurance policies, to help support their employees and their loved ones during hard times.

Business personal accident insurance will provide a cash payment to either the employer or employee, if they can’t work because of an injury that was caused by an accident.

Business personal accident insurance:

  • Can cover injuries that happen in the workplace or outside of working hours
  • Will cover accidental death, loss of limbs or sight, or permanent disability
  • Can pay for medical expenses following an accident
  • Won’t cover pre-existing conditions injuries/ intentional injuries and some insurers will not cover accidents caused by dangerous activities e.g. rock climbing
  • Works as an employee benefit which can be helpful when trying to keep long term employees or attract new ones
  • Can be added onto other forms of business insurance (at an additional cost)

How much personal accident cover you need isn’t a straightforward answer, as every person is different. You may have more (or less) expenses to cover compared to someone else, and so the level of cover you need would be different as well.

When deciding how much cover you need it can be helpful to think about things such as:

  • Do you have any savings you could use to support yourself if you were injured?
  • Do you have a mortgage or rent that would need to be paid?
  • Do you have dependents (children or adults) that rely on your income?
  • Do you have any other financial commitments? E.g. car finance, credit card debts etc

Is personal accident insurance worth it?

Whether a personal accident insurance policy is worth it will come down to personal choice. It can be a good option for someone who needs cover, but their budget won’t stretch to a full income protection policy.

You will however not be able to claim for as many things, as personal accident insurance only covers injury and won’t pay out for sickness/medical conditions.

Personal accident insurance vs income protection insurance

Personal accident insuranceIncome protection insurance
Will pay out one cash lump sum if you are injured in an accident (similar to critical illness cover, but that pays out on diagnosis of a serious medical condition)Will pay out regular cash lump sums if you are unable to work due to illness or injury (signed off work by a doctor or GP for 4 or more weeks)
Will cover you up to a set amount of £s (varies depending on the insurer and policy you choose)Will generally cover around 60% of your usual monthly income
Pays out once per claimWill pay out a monthly benefit regularly for a specified time period (commonly 12 or 24 months)
Will usually cover you for up to 5 yearsCan cover you for as long as you choose (up until retirement age)
Has several types of policy: Accidental death insurance, accidental permanent injury insurance and family personal accident insurance.Has several types of policy including short term income protection, long term income protection and guaranteed sick pay.

How to claim on personal accident insurance

Personal accident insurance has a similar claims process as any other type of insurance policy. If you have been injured and think that you are entitled to claim:

  • Check the terms and conditions in your policy documents (to help make sure you have a valid claim)
  • Contact your insurance provider
  • Submit your claim with their claims team
  • Provide medical evidence if asked e.g. hospital records
  • Receive your claim payout if your claim is approved (how long this will take can vary depending on the insurer)

How do I buy personal accident insurance?

There are several insurance providers who sell personal accident insurance in the UK including:

  • Aviva
  • AIG
  • AXA (included with car insurance)
  • Admiral (included with car insurance)
  • Direct Line (Business personal accident insurance)
  • MetLife
  • Zurich

If you want to buy personal accident insurance, there are a few different ways to do this. You can:

If you’re not sure what insurer or level of cover is right for you, it can be helpful to speak to an independent insurance advisor who will be able to help you compare the available policies.

Resources

RoSPA – Accident statistics

Brake (Road Safety Charity) – UK collision and casualty statistics

Health and Safety Executive – Health and safety statistics

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