Accident insurance is a type of supplemental insurance that pays out when you're injured in an accident. It complements disability insurance by allowing you to claim benefits even if your injuries don't keep you out of work. It can also supplement health insurance if your injury requires medical care that your health plan doesn't cover.
It's best to buy accident insurance in addition to disability insurance. While disability insurance pays you benefits each month you remain disabled, an accident policy only pays out a preset number of times or over a specific range of time. Accident insurance also offers relatively low benefits compared to disability insurance.
What’s covered by accident insurance?
What your accident policy covers will depend on your coverage and insurance company. Insurers usually divide injuries into different categories to assign them a level of risk and coverage. These include:
Accidental death or dismemberment
Each category covers several distinct types of injuries. If your injury isn’t specifically identified within one of those categories, you won't be able to file a claim for it.
The more severe your injury, the greater your benefit will be. For more serious conditions, such as being in a coma, you can expect a benefit as high as $10,000. Less serious injuries, like a laceration, may only trigger a benefit worth a few hundred dollars.
Companies may distinguish between “basic dismemberment” — accidental loss of just one limb, sight in one eye, or hearing in one ear — and “catastrophic dismemberment” — accidental loss of at least two limbs, sight in both eyes, hearing in both ears, or ability to speak. These benefits can be tens of thousands of dollars.
Additional accident insurance
Your personal accident policy may offer optional coverage add-ons similar to the riders you find in life insurance. These include hospital stays and ambulance rides (both in a vehicle or in the air) as well as certain kinds of emergency care. Optional coverage will raise your premiums, but it may increase the number of times you can claim an injury for benefits and expand the time during which injuries can be claimed.
How much does accident insurance cost?
Accident insurance is relatively inexpensive. You can take out a policy for between $6 and $20 per month if you’re young and healthy. However, policies often have deductibles, so you'll need to pay a certain amount of care out-of-pocket before your benefits can be applied.
Using accident insurance to supplement other insurance plans
Accident insurance vs. disability insurance
Accident insurance and your disability insurance can supplement each other. For example, if:
You're injured, but the injury doesn’t keep you out of work: You could qualify for an accidental injury claim even if you don't qualify for disability.
You become disabled, but the injury doesn't qualify for an accident claim: If your injury prevents you from working, your disability insurance coverage will cover you even if your accident insurance coverage doesn't.
You're waiting for your disability benefits to pay out: You can use the accident insurance benefit for financial support while you wait for your disability policy's elimination period to end.
Accident insurance should pay out whether your injury happened on the job or off.
Accident insurance vs. health insurance
Injuries that qualify for accident insurance may not keep you out of work, but could still require some medical care. You can use accident insurance to cover a health insurance deductible or a co-pay, or any other services not covered by your health plan.
For example, your health insurance will cover hospital fees associated with getting stitches. But your health insurance won’t pay you any money for the injury and may not even cover your entire treatment. An accident insurance policy makes sure you get a small benefit to assist you with any incidentals or uncovered costs.
However, accident insurance is not a replacement for health insurance and does not satisfy the Affordable Care Act’s health insurance coverage requirements.
Who can get accident insurance?
Every accident insurance company has different rules about who qualifies for benefits. To get coverage, you need to be at least 18 years old. Some accident insurance companies terminate your coverage once you reach a certain age, usually between age 70 and 75.
If you want your policy to cover any dependents you have, accident insurance companies frequently limit how old dependents can be and still receive coverage. The age limit for dependent coverage is usually their late 20s.
Is accident insurance worth it?
Accident insurance is relatively inexpensive, but it also offers relatively small benefits. A personal accident policy could make sense for you if your health insurance has high deductibles, if you aren’t eligible for disability insurance, or if emergency savings couldn't sustain you during your disability policy's elimination period. A Policygenius agent can walk you through the right policy options for you.