Personal accident cover and injury claims on car insurance

The basics

Personal accident cover is a part of a car insurance policy that compensates you or your family for injuries or death caused by a car accident.

If an accident isn’t your fault, the at-fault person’s insurer will pay out for any personal injury claims.

So personal accident cover will pay out after incidents where you’re deemed to be at fault.

Do you need personal accident cover?

You might not want to think about it, but how would you and your family cope if you were in a serious car accident?

If injuries prevented you from working your income might stop. You could even be faced with a permanent injury or disability.

It’s also important to think about what would happen in the event of your premature death and prepare for the worst if you have a dependant family.

Personal accident cover can give you peace of mind that they’d be financially compensated if you die.

Car insurance doesn’t always include it

Don't assume that personal injury cover is already included on your car insurance policy, as this often isn’t the case, especially if you don’t have comprehensive cover.

We checked 363 comprehensive car insurance policies on Defaqto and found that 95% included personal accident cover as standard, while a further 2% allowed it to be added as an optional extra. 

But it’s a very different story for third party, fire and theft policies. Out of 193 policies checked, only 4% included personal accident cover as standard. It could be added as an optional extra to 18% of policies.^[1]

Levels of personal accident cover

Not all policies have the same level of cover, so you’ll need to look for these details in your policy wording to see exactly what’s included.

• How and when it’s paid

  Compensation will be tax free and can be paid as a lump sum or instalments for a fixed period of time. It’ll be capped at a set amount, and the maximum you can expect depends on what your policy offers.

• Disability benefit

  It varies from one policy to another. Of the 345 comprehensive policies checked on Defaqto, 49% included disability benefit for personal accident claims of £5,000-£7,499. 23% offered less than £5,000 and just 7% offered £15,000 or more.

• Different scenarios

  Policies usually cover a range of scenarios, with different sums paid for the loss of a limb, fingers or toes, fractures of various parts of the body, or loss of sight in one or both eyes.

• Death

  The amount paid if you die varies. Just over half of policies offered between £5,000-£7,499 with the rest offering less. 3% gave no cover in the event of death at all.

• Upgrades

  Personal accident cover on insurance policies can sometimes be upgraded to a higher level of cover for an extra fee.

Exclusions

Don’t make the mistake of thinking everyone in the car’s covered. Personal accident policies have restrictions, such as covering only the driver and his or her spouse.

Some also place restrictions on age, like only covering people under 80.

What's more your policy will be invalid if you're injured while driving under the influence of alcohol or drugs.

Personal accident cover also excludes some types of treatment – as an example, 92% of the policies checked on Defaqto didn't cover the cost of physiotherapy following an accident.

You’ll also need to check your policy to see if it covers injuries that happen while participating in sports, such as rally driving.

How to make a personal injury claim

Firstly, get medical treatment for yourself or anyone else who's been hurt. That can involve calling an ambulance and the police to the scene of an accident.

By attending hospital or your doctor's surgery you'll create medical documentation. You’ll need this to support your claim. Keep all your travel receipts and any other expenses too.

Contact your insurance company as soon as possible to report the accident and begin your claim.

If the accident was the fault of another driver, then your claim will be against their insurer. If it's not another party's fault, you'll need to claim against your own personal accident cover.

As each accident is different, the time it takes for an insurance company to pay out varies.

But if you feel your insurer is taking too long to look at something, then put your complaint in writing straight away - it can’t penalise you for making one.

If you’re not happy with their response, take your case to the Financial Ombudsman. You need to give your insurer eight weeks to respond first though.

Medical expenses

The first doctor on the scene of the accident can charge a fee for their attendance if they don't work for an NHS hospital.

You won’t have to pay this charge. If the doctor does send you the bill, just pass it on to your insurance company.

However, an injured uninsured driver might have to pay the bill if they cause an accident.

In most cases, a claim for medical expenses won't affect your no-claims bonus.

What about false claims?

According to the Association of British Insurers (ABI) in September 2018, personal injury claims have risen 40% in 10 years, despite vehicles becoming safer and road accidents falling by 31%.

This is fuelled by an increase in cold calling claims firms, fraudulent claims and soft tissue injury (whiplash) claims, which have driven the cost of motor insurance up.

The industry and government have cracked down on false and exaggerated claims to make sure genuine claimants receive fair compensation in a new law called The Civil Liability Bill. It's hoped this bill will reduce the cost of car insurance for everyone.

As long as you’re honest about any injuries you’ve received in an accident, you shouldn't be worried about making a personal injury claim.

By Alice Lloyd