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Is Personal Accident Cover for Car Owner-Driver Mandatory in India?

Owning a car is a dream for many. You work hard day and night to buy the best car in your budget that not only exudes luxury but also comfort. It is probably one of the major reasons why buying car insurance holds importance as it protects your vehicle from any unpredictable mishap or accidents. In India, it is mandatory to own a car insurance policy covering at least third party liabilities to be able to legally ply on public roads.

However, the damage following a car accident is not limited to a third party property or person and the car. In an accident, the person driving the car is equally at risk of getting critically injured. Major car accidents also result in the death or permanent disability of the driver. As a result, insurance companies had introduced a personal accident cover for owner-drivers.

Personal Accident Cover for Owner-Driver

A personal accident or PA cover is a facility offered by motor insurance providers to the owner-driver of a car that protects him against any accidental injuries. It provides compensation in case the owner-driver of the car suffered from bodily injuries, permanent disability or death following the car accident. An owner-driver refers to the owner of the insured car, who possess a valid driving license.

Currently, all car owners are granted a personal accident cover of Rs 15 lakh as per the guidelines issued by IRDAI or Insurance Regulatory and Development Authority of India. The IRDAI has fixed the PA cover at Rs 15 lakh following an order from the Madras High Court in September 2018.

Though car owners are generally clear about the legal requirements of owning a car insurance policy, most people are confused about whether personal accident cover is mandatory or not. Let us answer this question for you.

Is Personal Accident Cover Mandatory for Owner-Drivers?

In India, it is mandatory for all cars owners to own a personal accident cover. This cover needs to be purchased irrespective of whether you are buying a third party liability-only policy or comprehensive policy for your car. If you don’t own a PA cover under your car insurance, you will be liable for legal action under the law of the country.

The whole idea behind a PA cover is to ensure that all car owners are covered against personal accident up to the minimum mandated coverage limit. As per the India Motor Tariff 2002, personal accident cover is issued compulsorily with every car insurance policy. Therefore, it is granted as part of the comprehensive policy as well as the third party liability-only policy.

No Need to Buy PA Cover More Than Once

As of 1st January 2019, the IRDAI unbundled personal accident cover allowing car owners to skip buying the PA cover if they already own one. Let us break it down for you. Suppose you have two cars and purchased a PA cover while insuring the first car, you don’t have to buy it again while insuring your second car.  

Earlier, personal accident cover came as an in-built component of a car insurance policy. As a result, car owners had to purchase a PA cover every time they purchased car insurance for a new car in addition to the existing car(s). This led to multiple PA covers providing the same coverage but coming at an additional premium cost.

Making note of this unnecessary cost borne by the owners of more than one cars, the IRDAI decided to unbundle personal accident cover from car insurance allowing people to buy the cover only once.

Premium Cost of Personal Accident Cover for Owner-Driver

Presently, the premium for a personal accident cover of Rs 15 lakh is fixed at Rs 750. The IRDAI has fixed this premium amount for PA cover under the bundled car insurance policies for all types of cars.

However, motor insurance companies have been granted the liberty to decide the premium for unbundled or standalone personal accident cover. Thus, the premium amount for the PA cover can be higher in the case of unbundled and standalone covers.

Therefore, it is beneficial to go for a bundled car insurance policy if you don’t own a personal accident cover. Buying a standalone personal accident cover can turn out to be quite expensive for you.

Benefits of PA Cover for Owner-Driver

Buying a personal accident cover is highly advantageous for all car owners. The road is full of uncertainties and nobody can guarantee total safety from mishaps at all times. This leaves you with the choice of staying adequately prepared against any adversities on the road. PA cover is the best protection option when it comes to securing yourself from any accidental injuries.

If you meet with an accident while driving your car, your personal accident cover will come to your rescue. It will provide you with financial aid to help you cover medical expenses incurred during your treatment, including hospitalization charges, treatment cost and medicine bills. It will also provide you with monetary compensation in case you end up suffering from a permanent disability as a result of the accident. Moreover, a PA cover will also provide compensation to the surviving members of your family in case the car accident results in your death.

PA Cover for Paid Driver/ Passengers

The IRDAI has mandated only the owner-driver of a car to possess a valid personal accident cover under his motor insurance. But what if you have hired a paid driver to take you around and he gets injured in an accident? Well, there are guidelines for paid drivers too.

As per the Workman Compensation Act, the owner of the car or the employer is liable to pay compensation to the paid driver in case he gets injured in an accident while driving his employer’s car. To help you combat such a situation, motor insurance companies offer personal accident cover for paid drivers as an add-on cover. Your insurer will take care of any liabilities towards your paid driver under this cover. However, you will be required to pay an additional premium to buy this cover.

Similarly, you can also buy personal accident cover for passengers seated in your car as an add-on cover. With this cover, the treatment cost for accidental injuries sustained by the passengers in your car will be covered by your insurer. This way you can protect your family members from any accidental injuries while riding in the car with you. But just like the PA cover for paid drivers, personal accident cover for passengers comes at an additional premium price.

In a Nutshell

Personal accident cover for owner-driver is compulsory for all car owners in India. Even if you own more than one car, you need to purchase PA cover but only once. You don’t have to buy this cover under the car insurance policies for all your cars. Thus, make sure to stay covered under a personal accident cover and handle car accident situations like a boss.

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