What does personal accident insurance cover?

Personal accident cover (also called accidental injury or accident-only cover) is insurance against accidents that can happen at any time to any one of us.

If your injuries stop you from working, personal accident cover can protect your income.

In fact, some policies will even cover you for a serious accident whether you are able to return to work or not. This varies by insurer, the type of cover you have, and the severity of an injury.

What is personal accident cover?

Depending on your policy, benefits can be paid out either as a one-off lump sum or as an ongoing benefit. For example, a policy may pay up to 75% of your regular income for a set period of time.

Personal accident cover can be a standalone policy or as part of Total and Permanent Disability Insurance.

Personal accident cover can be especially useful for people in the following professions:

• Self-employed

• Professional athletes

• Tradespeople

• Those who participate in extreme sports

What personal accident cover is not

Personal accident cover is not the same as accidental death cover.

This pays a lump sum to your beneficiaries if you pass away due to an accident.

It is also not the same as workers' comp, which is for accidents in the workplace.

Personal accident cover may cover you for some accidents at work, as well as those that happen at home, on holiday, or any time you are not on the clock.

Personal accident cover does not include illness, unless your policy specifically covers it.

If you are unable to work due to sickness, that is typically not considered an accident.

However, there are other types of insurance that cover illness.

What's covered by personal accident cover?

So now that you know what's not covered by personal accident cover, let's look at what is covered.

Remember that each insurer sets its own terms and conditions, which you should read carefully.

Knowing what you're covered for is important!

What's not covered?

As we mentioned before, personal accident cover doesn't include sickness or accidental death.

There are a few other situations that aren't covered, which should be listed in the policy details.

To find out what's not covered, look for policy exclusions.

Personal accident policy exclusions usually include self-inflicted injuries and may include dental injuries.

We can't stress enough how important it is to read the policy details so you're aware of what is and isn't included in your policy.

You'll also need to disclose any pre-existing medical conditions (including those caused by a previous injury) when applying for coverage.

It's also important to note that personal accident insurance can be cancelled by the insurer.

For example, if you change your job, your insurer may be able to cancel or decline to renew your policy.

Why you need personal accident cover

Not particularly accident-prone?

You may be wondering if you really need personal accident cover.

The fact is, an accident can happen to anyone at any time.

According to statistics from the Australian Institute of Health and Welfare, almost half a million people are hospitalised each year as a result of injury.

The defining feature of an accident is that we don't expect it to happen and therefore aren't prepared for it.

While you can take steps to avoid accidents -- like looking both ways before you cross a road -- they come without warning.

And when they do, they can affect your finances as well as your health and quality of life.

Personal accident cover is a way of preparing financially for the unexpected.

If you're out of commission for weeks, months, or even years following an accident, the loss of income can force many people into debt.

When you have cover in place, however, you may be able to protect yourself from debt and keep your family finances in a strong position.

Benefits of personal accident cover

Even if you never use it, personal accident cover can provide peace of mind.

If you're injured in a listed accident, you know you're covered.

But there are many more benefits to having personal accident cover.

Return to work faster

When you don't have to worry about your income following an accident, you can focus on your recovery.

In fact, some insurers offer resources and support during the recovery period.

This might include benefits for hospital stays, counselling, rehabilitation, or medical advice.

Cover for self-employed workers

If you're self-employed, you know that taking a sick day can be detrimental to your income and your business.

The same goes for any time off for injuries following an accident.

If you don't want to dip into your savings, personal accident cover is a strong contingency plan to protect against a loss of income.

Protection while overseas

Some policies will cover you 24/7, even if you're not in the country at the time of the accident.

After all, accidents can happen no matter where you are.

Part of the peace of mind associated with personal accident cover is that you're often covered even while overseas.

Shopping for personal accident cover

When shopping for personal accident cover, there are many options for customisation.

You can select from different levels of cover depending on your needs, and make choices to reduce your premium.

For instance, shorter benefit periods and longer waiting periods usually mean lower premiums.

Your occupation and age may also affect your premium.

Cover usually costs more for people in high-risk occupations, as they are more likely to make a claim.

If you're worried about how you would survive financially should an accident occur, no matter your occupation, you should consider personal accident insurance.

The tax benefits, combined with the reassurance that you won't be forced into debt from accident related-injuries, can be invaluable.

As with all types of cover, comparing policies is the smart way to find a lower price.

To find a competitive deal on personal accident cover, compare policies today

Chris Stanley is the sales & operations manager of health insurance at Compare Club. With extensive experience and expertise, Chris is a trusted leader known for his deep understanding of health insurance markets, policies, and coverage options. As the sales & operations manager of health insurance, Chris leads a team of dedicated professionals committed to helping individuals and families make informed decisions about their health insurance needs.

Meet our health insurance expert, Chris Stanley

Chris's top health insurance tips

• 1

  Australia’s public health system is world-class, but wait times for public hospitals can be long, inconvenient - and leave you living in constant pain while you wait.

• 2

  An appropriate private health insurance policy can speed up your surgery, relieving your pain sooner.

• 3

  Family health cover means your children are covered under the same policy as you.

• 4

  Many health insurance policies come with a 12-month waiting period for pregnancy-related cover, so it’s a good idea to get a family policy organized well before starting your family. This means your child will be covered from birth until at least their early twenties (depending on which health fund you select).