What Is Accident Insurance?

Life can be full of unexpected events, from accidents or injuries to surprising good news. Accident insurance is designed to protect you when something difficult comes your way, from a fall off a ladder to other accidents. 

This form of insurance policy offers a payout in case of injury or death resulting from an accident. Unlike auto insurance, liability insurance or other insurance policies, accident insurance is specifically designed to cover your loss of income and care in case of an accident. However, accident insurance may have significant limitations. What is accident insurance? Read on to understand its limitations and how you can protect yourself. 

How Does Accident Insurance Work?

Accident insurance typically pays cash benefits for injuries that arise from accidents. Like other forms of insurance, you will pay a monthly premium for coverage. Depending on the plan you choose, there may be restrictions, such as a maximum total payout for risky activities or total limitations.

Depending on the nature of the accident and other forms of insurance, your health insurance may cover 100% of your medical costs. However, accident insurance can still provide additional benefits, such as compensation for time off work or other benefits. Accident insurance does not usually cover negligence or natural disasters. 

Some insurance companies sell accident insurance bundled with other policies, or you can purchase it as a standalone policy.

Personal vs. Group Accident Insurance

Personal accident insurance is a policy you purchase for yourself. Group accident insurance covers all members of a group under a single policy. This is a cost-effective solution that usually costs less than personal accident insurance. 

Your employer may offer optional group accident insurance, which you can opt into. You may be asked to pass a medical exam to get accident insurance. With a group accident insurance plan, you'll most often have to pay the entire premium through a payroll deduction, but you can also opt out. 

Both personal and group accident insurance covers common injuries like dislocations, fractures, 

concussions, eye injuries, burns, dental injuries, ruptured discs and rotator cuff injuries. Policies will also often pay a set benefit for medical services like air or ground ambulance transfer, admission to a hospital, surgical procedures, general anesthesia or blood and plasma infusions.

What Does Accident Insurance Cover?

Accident insurance covers includes common accidents like:

• Fractures
• Lacerations
• Concussions
• Eye injuries
• Burns
• Dislocations
• Broken bones
• Dental injuries
• Internal injuries
• Ruptured discs
• Tendon, ligament and rotator cuff injuries
• Loss of a limb
• Sprains
• Paralysis

What Is Not Covered?

Accident insurance doesn't cover self-inflicted injuries, negligence or natural disasters. For example, the following cases wouldn't be covered:

• Accidents arising out of illegal activities
• Self-inflicted injuries or self-harm
• Suicide
• Injuries resulting from inebriation 
• Accidents that arose from your negligence. 

Examples of negligence can include:

• Running a stop sign and slamming into another car. Your injuries, in this case, most likely won't be covered by accident insurance. 
• If you go hiking while drunk and fall off a cliff, accident insurance typically wouldn't cover it.

How Much Does Accident Insurance Cost?

The cost of accident insurance varies by the total coverage and deductibles. Monthly premiums can range from a few dollars per month to more than $50 per month. The scope of coverage, deductibles and whether the accident insurance covers high-risk activities can all affect accident insurance premiums. 

Is Accident Insurance Worth It? 

Accident insurance can offer additional protection that makes it worth it if your health insurance or disability insurance doesn't have adequate coverage. For example, it can make sense if an accident creates medical expenses that aren't covered by your health insurance or cover the difference or deductible on your health insurance. 

Getting accident insurance can offer a financial cushion if there are gaps in your primary coverage or if you add "high-risk" coverage. It can also help complement disability insurance by allowing you to claim benefits even for injuries that don't keep you out of work. Before getting accident insurance, carefully consider the pros and cons. 

People who could benefit from accident insurance include:

• Self-employed professionals: Personal accident insurance can provide an extra layer of coverage for people without additional coverage from an employer.
• Those in high-risk professions: Accident insurance may be especially useful if you work in a high-risk profession with occupational hazards. This can include everything from jobs working with heavy machinery to nurses who may be more prone to back issues.
• Those with active lifestyles: If you regularly participate in activities where accidents are common, from marathons to long-distance bike races or mountain climbing, accident insurance coverage may be worth it.
• Parents: If you have children, getting accident insurance can help protect your family’s financial security from the impact of an accident.

Pros and Cons of Getting Accident Insurance

Here is an overview of the pros and cons of accident insurance. 

Pros 

• Loss of income: Accident insurance can help cover gaps in your health insurance or disability insurance in case of injuries that result in loss of income. 
• Additional protection: Even if the injury doesn't result in disability or time off work, the extra financial protection can help you get the necessary treatment. 
• Protect your family: Accident insurance can offer an extra layer of financial security for your family in case of unexpected expenses related to an accident.
• Peace of mind: Knowing that you're covered for whatever happens can increase your peace of mind and allow you to comfortably plan for your family's future. 

Cons

• Additional costs: While accident insurance isn't expensive, it can add up over the years. Instead of paying for insurance, you could invest those funds or keep them in a high-yield savings account. 
• Not everything is covered: Negligence, acts of God or natural disasters may not be covered, which means your claim could be rejected if the insurance company considers that it falls into one of those categories. 
• Overlap with other insurance: If you have good health and disability insurance, the coverage from accident insurance may be redundant. 

Other Supplemental Coverage to Consider

Other supplemental coverage options include disability and absence services, critical illness and hospital indemnity insurance. Here is an overview of how these additional coverage options work. 

Hospital Indemnity 

Hospital indemnity is an insurance supplement you can add to your existing health insurance coverage. It is designed to help pay for hospital stays. Hospital indemnity insurance may give you cash payments to help you pay for additional expenses that you face while you recover. However, the specific coverage varies by plan. Related to hospital indemnity, you might have Medicare Part A. 

Disability and Absence Services 

Disability and absence management services are usually third-party companies that help you in approving and managing employee leave requests or disability claims. This service is usually used by small to large businesses or corporations rather than individuals. Disability and absence services include administering disability, absence, or leave management programs.

Critical Illness

Critical illness insurance is an insurance policy specifically designed to cover major health emergencies that can require long-term critical care, such as cancer, a heart attack or a stroke.

For many people, in the case of these and other frightening situations, critical illness insurance could be the only thing standing between you and financial ruin. Unfortunately, the exorbitant costs of long-term treatment for life-threatening illnesses are usually more than any health insurance plan will cover. 

Critical illness policies are relatively low cost and are usually limited to a few illnesses or emergencies. However, if you are faced with a diagnosis of one of the specific illnesses listed as part of the policy, you will typically receive a lump-sum cash payment to cover medical costs. 

How to Get Accident Insurance

The step-by-step process of getting accident insurance is simple. You can compare rates online and contact your existing insurance provider to compare quotes. Here are the basic steps:

• Compare accident insurance providers online.
• Contact your existing insurance provider to see whether you can bundle policies.
• Read customer reviews and compare total costs before choosing the best option.
• Carefully check limitations and policy limits.
• Choose the best option for your needs, considering costs, coverage and provider reviews.

Compare the Best Accident Insurance from Benzinga’s Top Companies

Benzinga's top insurance providers offer excellent coverage and customized quotes. You can find some of the best accident insurance options here. 

Do You Need Accident Insurance?

Not everyone needs accident insurance. For example, if you have a low-risk job, don't participate in high-risk activities and have excellent health and disability insurance, you may not need accident insurance. However, if you have additional risks related to your profession or recreational activities, accident insurance can help protect your family from financial risks. You can also find the best health insurance and the best general liability coverage or Benzinga's insurance guides here.

Frequently Asked Questions