What is personal accident insurance and what does it cover?

Accidents do happen, and sometimes they can leave you unable to work.

Personal accident insurance means that you or your loved ones can still have money to cover your essential expenses in case of accidental injury or even death.

Here’s a useful overview of what personal accident insurance is and what it can protect you against.

An expert financial adviser can assist you to find the best personal accident insurance insurance coverage for your specific needs.

What is personal accident insurance?

Personal accident insurance is an insurance policy that pay outs compensation to people who suffer serious injury or death as the result of an accident.

These policies differ from ordinary life insurance plans in that the incapacity (or death) must be the result of an accident, rather than illness or old age.

Personal accident cover will protect you and your family from the loss of income that results from you not being able to work.

One aspect of being involved in an accident that many people don’t initially consider is the stress caused by the pressure to meet financial commitments while undergoing treatment and recovery.

Personal accident insurance can aid your physical recovery by easing this stress. Be wary that personal accident insurance differs from other types of insurance.

What does personal accident insurance cover?

Your personal accident insurance policy may cover a range of risks, so make sure you compare different accident cover and life insurance policies to make sure that they cover the particular risks you may be exposed to.

This is especially important if you spend a lot of time doing potentially risky activities, either as part of your work or for recreation (e.g., horse riding, cycling, climbing, contact sports).

Make sure that the specific risks you face are covered under your policy.

Most personal accident insurance policies will provide the same broad levels of cover.

These areas of coverage can include:

• An accident or injury that occurs at work

• Injury caused by someone being violent towards you

• Road traffic accidents

• Total or permanent disability as the result of an accident

• Injuries resulting from falls, slips and spillages

• The loss of body parts or the loss of the ability to use them fully

There is a distinction here between temporary and permanent injuries, as these require differing levels of ongoing financial support.

If you are out of work for a month, you are going to need far less than someone who has suffered a permanent injury such as hearing loss or losing a limb.

It is also possible to get cover for any medical expenses you may incur as a result of your accident, such as physiotherapy.

Some policies will be more flexible and could be tailored to include other scenarios, depending on your particular needs and lifestyle.

Do I need personal accident insurance and is it worth it?

Certain individuals may experience more value when taking out personal accident insurance, particularly those who work in industries with a more pronounced risk of accidental death or injury.

Even if you are an office worker whose daily tasks and hobbies don’t involve any dangerous activities, you may still consider this kind of insurance if you drive or cycle to work every day.

Some employees may already have personal accident coverage through their employer or group insurance plans, which might reduce the need for additional coverage.

Personal accident insurance should be a priority for the following kinds of people:

• Those involved in construction, industrial, or any other profession that involves the regular use of heavy and potentially dangerous machinery or substances.

• Those who drive around for large parts of the day, such as delivery drivers, particularly bicycle couriers and food delivery workers.

• Self-employed people who may need to cover a period of lost earnings and pay business expenses.

• People whose job involves the potential for violence, such as security and prison staff, bouncers, and police.

Are there different types of personal accident insurance cover?

There are a number of different kinds of personal accident insurance cover, so making sure you have the right policy is crucial.

The main kinds available are:

• Standard personal accident insurance: This type of policy may include accidental death insurance, accidental permanent injury insurance, and standard cover for injury-related medical expenses.

• Accidental death insurance: This kind of policy ensures your partner or family is financially supported in the event of your death from a serious accident. This is usually paid out as a single lump sum.

• Accidental permanent injury insurance: This policy will provide you with a payment if you suffer a permanent injury, such as the loss of a limb, sight or hearing loss, or become disabled.

• Family personal accident plans: You can also extend your cover to include your whole family, which can be good if you have adult children that may need this kind of insurance.

How much does personal accident insurance cost?

Average personal accident insurance premiums can range between £20 to £30 a year for a plan providing coverage of between £5,000 to £100,000, with some insurers offer accidental death insurance from as little as £1.85 a month.

There are a range of factors that could determine how much your cover costs.

Different providers and different levels of cover will play a part.

Your insurer will look at your risk factors and the level of cover you need when suggesting the right policy.

Considering that a permanent injury may require cover for as much as £100,000, it is clear why there can be such variances.

Individuals at higher risk of personal accidents may pay higher premiums.

A financial adviser will provide you with an accurate quote based on your circumstances.

How can I buy personal accident insurance?

A financial adviser will be able to give you a better idea of exactly how much personal accident insurance cover you might need, as it will depend on a range of factors.

First of all, you need to take into account your essential monthly outgoings and calculate how much cover you would need for one, two, three and six months.

Secondly, you need to take any other health conditions into consideration.

For example, diabetes is a condition that can in severe cases require a limb to be amputated – this alone is unlikely to be covered, as the root cause is the illness itself.

However, if your your diabetes causes you to have an accident at work at a point when your blood sugar was low, and this resulted in you losing a limb, the case becomes more complex.

While you might expect to be covered, many insurers apply a 'strict proximate cause' rule which means that if they believe the accident was only triggered by your pre-existing medical condition, they may decline the claim.

It is vital to declare any conditions upfront; if the insurer accepts the risk, they may provide cover, but they often exclude accidents directly resulting from that specific illness."

For further guidance on how pre-existing conditions affect insurance, visit the Financial Ombudsman Service.

Other details that are required to make a claim consist of:

• A claim form

• Medical records

• Proof of accident

• Proof of income loss

• Proof of identity

Where can I find personal accident insurance?

Personal accident insurance is available from a number of sources. You can buy directly from insurers, or use a price comparison website such as Compare the Market, MoneySuperMarket, or GoCompare to view multiple quotes side by side.

These platforms allow you to filter by level of cover and price, making it easier to find a policy that suits your needs and budget.

Alternatively, an independent financial adviser can search the wider market on your behalf and recommend the most suitable policy for your circumstances, particularly useful if you have pre-existing conditions or work in a high-risk occupation.

What does personal accident insurance not cover?

Typical exclusions to personal accident insurance include:

• Illness or Disease: This insurance is for physical trauma caused by an external accident. It will not cover incapacity caused by strokes, heart attacks, or illnesses like cancer. These are instead covered by Critical Illness or Income Protection.

• Pre-existing Conditions: Any accident that is caused by a pre-existing medical or psychological condition is typically excluded.

• Alcohol and Drug Influence: Claims are rejected if the accident occurred while you were under the influence of alcohol or non-prescription drugs. The alcohol exclusion usually applies if it can be proved you were over the usual drink drive limit.

• Hazardous Sports & Hobbies: High-risk activities—such as skydiving, motor racing, or mountain climbing—are often excluded unless you have paid an additional premium to "buy-in" that specific cover.

• Self-Inflicted Injuries: Any injury resulting from intentional self-harm or attempted suicide is excluded.

• Professional Sports: If you are paid to play a sport, injuries sustained during that activity are usually not covered by a standard policy.

• War and Terrorism: Most policies exclude injuries sustained during acts of war, civil unrest, or terrorism.

• Pregnancy and Childbirth: Complications arising from pregnancy or childbirth are generally not classified as "accidents" under these terms.

• Dangerous Occupations: If you change jobs to a high-risk role such as offshore oil rig worker or scaffolder and fail to notify your insurer, your policy may be void.

Other FAQs about personal accident insurance

Do I need personal accident cover on car insurance?

Personal accident insurance is different from car insurance as it does not pay for accidental damage to your vehicle.

Some car insurance providers will include personal accident cover in their policies, but this is not universal.

Others will offer it as an ‘extra’ for an additional premium. Personal accident insurance will usually cover you if you sustain a serious injury or die in a road traffic accident.

How do I claim personal accident insurance?

To make a claim you need to contact your insurer and provide them with the relevant details and documentation.

You will need to submit some kind of evidence as to the severity of your injury in order to access your payment.

The specific claim submission process will depend on the injury as well as the policy in question.

Can I get this kind of insurance if I’m self-employed?

Yes, you can and it could be a really beneficial investment to make.

The cover could help you meet a shortfall in earnings as well as cover other business expenses.

In general, it is advisable for self-employed people to get as much cover as possible, and you may be able to find a life insurance policy that also contains personal accident cover.

Is personal accident insurance tax deductible?

No. The reason for this is that personal accident insurance does not come under the remit of business expenses like professional indemnity or employer liability.

So even though you may consider it an important part of your business expenditure, you won’t be able to deduct it from your taxes.

Does personal accident insurance include sickness?

Most personal accident insurance policies only cover serious injury or accidental death that results from an accident.

This means that most will exclude death or injury causes by sickness, disease or any other naturally occurring condition.

Some providers will also provide sickness cover as well as personal accident, but this will result in an increased cost to you.

You may find that health insurance, life insurance, critical illness cover or income protection all provide a better level of protection when it comes to being unable to work due to sickness.

Is it the same as income protection?

There are a lot of similarities between the two kinds of insurance, but they are not strictly the same.

The main difference is that both long-term and short-term income protection policies will cover you in the event that sickness prevents you from working.

Personal accident insurance does not tend to include being unable to work due to a serious illness, even if your work was a contributing factor.

Might I already have personal accident insurance?

Here is a top tip. You might have personal accident insurance without even knowing. Some of us pay monthly or annually for "packaged" bank accounts or premium credit cards.

These often include a level of Personal Accident cover. If you  go out and buy a standalone (unbundled) policy, you might be paying twice for the same protection

Get expert financial and insurance advice

Personal accident insurance provides financial assistance in the event of injury, disability, or death caused by unexpected accidents.

While most working professionals can benefit from this type of insurance, those working in high-risk environments and sectors such as industrial work, construction, and logistics may find it particularly advantageous.

Let Unbiased connect you with a financial adviser who can offer you expert insurance advice to ensure that you have the right cover for your specific needs.

If you found this article useful, then you might also find our articles on car gap insurance and the difference between critical illness and income protection insurance informative, too!