What is The Difference Between Personal Accident and Personal Injury?

Personal accidents and personal injuries are two distinct types of incidents that can lead to insurance claims. While they share some similarities, there are important differences between personal accident insurance and personal injury insurance that policyholders should understand.

What is Personal Accident Insurance?

Personal accident insurance provides financial protection in the event of an accident that leads to injury or death. It will pay out a lump sum if the policyholder dies, loses a limb, their sight, hearing or speech following an accident.

Some key features of personal accident insurance:

  • Covers accidents only – sickness and disease are not included.
  • Pays out a lump sum – does not cover ongoing medical expenses.
  • Payment is not based on who was at fault for the accident.
  • Covers death and permanent injuries only – not short-term disabilities.
  • Premiums are usually affordable.
  • Policies have specific definitions for the injuries they cover.

Personal accident policies usually pay out according to a set schedule. For example, the policy may pay:

  • £50,000 for death
  • £50,000 for loss of two or more limbs
  • £25,000 for loss of one limb
  • £50,000 for permanent blindness
  • £25,000 for permanent loss of hearing

The amount the policy pays depends on the severity of injury as defined in the policy terms. Lower payouts may be listed for fractures and burns. More comprehensive policies may also include cover for temporary disability.

Personal accident insurance provides valuable protection against loss of income if the policyholder is severely injured and unable to work for a long period. It also provides reassurance that family and loved ones will receive a payout in the worst case scenario.

What is Personal Injury Insurance?

Personal injury insurance has some overlaps with personal accident cover but works differently. Personal injury policies cover an individual’s legal liability to compensate others if they injure them or their property due to negligence.

For example, you collide with a pedestrian while riding your bike and they break their leg. Your liability insurance would cover their medical bills and any loss of income. The key differences are:

  • Covers injury to third parties – not the policyholder themselves.
  • Pays out to compensate the injured party – not a lump sum to the policyholder.
  • The policyholder must be legally liable for the injury.
  • Will appoint legal representation and defend or settle claims.
  • Covers any form of injury – not just accidents.

Personal injury insurance provides protection if you are sued for compensation by an injured third party. The insurer will pay legal costs and any compensation award made against the policyholder up to the limit stated in the policy.

Some common examples include:

  • Injuring someone in a car accident.
  • Your dog bites and injures a stranger.
  • Someone slips and falls on your property and suffers injury.
  • You collide with a cyclist while jogging.

Without liability cover, the costs of defending and settling personal injury claims can be financially devastating. Personal injury insurance prevents this by covering both legal costs and compensation payouts.

Key Differences Between Personal Accident and Personal Injury Insurance

While personal accident and personal injury insurance both relate to injury, they work in very different ways. Here are some key differences:

Who is covered

  • Personal accident insurance covers the policyholder themselves.
  • Personal injury insurance covers the policyholder’s liability to others.

What is covered

  • Personal accident pays out for injuries to the policyholder.
  • Personal injury covers compensation for injuring a third party.

Type of payout

  • Personal accident pays a lump sum to the policyholder.
  • Personal injury pays compensation to an injured third party.

What triggers a claim

  • Personal accident – accident causing injury or death.
  • Personal injury – legal liability for accidentally injuring a third party.

Is fault relevant?

  • Personal accident will pay out regardless of who caused the accident.
  • Personal injury only responds if the policyholder was negligent and at fault.

While both offer protection following accidents, personal accident insurance provides direct financial support to the policyholder and their family. Personal injury cover protects against the potentially substantial costs of being sued for compensation by an injured third party.

Common Questions About Personal Accident and Personal Injury Insurance

Which type of insurance pays out to the policyholder themselves?

Personal accident insurance pays a lump sum directly to the insured individual in the event they suffer a serious injury or death following an accident. Personal injury insurance instead covers the policyholder’s liability to pay compensation to third parties they injure.

Does personal accident insurance pay out if someone else caused the accident?

Yes – personal accident insurance will make payouts to the policyholder regardless of who was at fault for the accident. The key trigger is the policyholder suffering injury or death as defined in the policy terms. Who caused the accident does not affect the insurer’s liability to pay.

What types of injury does personal injury insurance cover?

Personal injury insurance will cover any form of physical injury to a third party caused by the negligence of the policyholder. This includes anything from minor soft tissue damage like whiplash to major traumatic injuries and fatalities. It can also cover psychological injury in some cases.

Does liability insurance cover sickness or disease?

Liability policies generally only cover injury caused directly by an accident. Gradual onset conditions like work-related stress or illnesses transmitted such as chickenpox would not be covered. However, liability insurance may sometimes respond if negligence leads to rapid onset of illness or disease.

Can personal accident and personal injury policies overlap?

It is possible for a serious accident to lead to both a personal accident claim by the injured policyholder and a personal injury claim if third parties were also hurt. Each policy would respond in different ways – personal accident would pay the policyholder, while liability would compensate other injured parties.

What accidents can trigger a personal accident claim?

Personal accident policies generally cover any sudden, unforeseen external event causing injury. This includes road traffic accidents, falls, injuries during recreational activities, or accidents while at work. Assaults may also be covered along with other causes like burns, electrocution and even natural disasters.

Final Thoughts

In summary, while personal accident and personal injury insurance both relate to accidental injury, they work quite differently:

  • Personal accident insurance pays lump sums directly to the policyholder if they are injured or killed in an accident.
  • Personal injury insurance covers the policyholder’s liability to compensate third parties they have accidentally injured.

Key differences revolve around who is covered, what triggers a claim, how payment is made, and whether fault affects response. Understanding these distinctions helps ensure you have the right type of protection in place for your specific insurance needs.

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