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Tuesday, Oct 29th

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The Problem with 'Free' Accident Cover.

The Problem with 'Free' Accident Cover.

One of the main reasons why many people simply don't bother with personal accident insurance is that no one really wants to have to worry about having a serious accident or possibly dying as a result of injury.

Yet there's another reason why people don't take out cover. And that's because they believe, often mistakenly, that they're already included with other products, such as:

  • life cover
  • health insurance
  • employer cover
  • car insurance
  • travel insurance
  • credit card

In the case of travel insurance and some credit cards, the service provider will often claim that & 'free' accident cover comes with the product. Unfortunately, the reality is, when someone tries to claim on these policies, they discover so many exclusions that the cover is effectively worthless, or the amount paid out wasn't nearly sufficient to cover the real costs of a serious injury.

Think you're covered? Think again!
So why are so many of these policies not worth the paper they're written on? The answer is in the fine print and the definition of 'severely injured'. Most of these &'free' policies will only pay out in the event of loss of limb, an eye, death or a severe disability. So, if someone made a claim having broken an ankle playing football, in all likelihood, the policy would be useless.

As personal accident insurance provider Hiscox points out, &'free' accident insurance policies usually come with so little cover that in the event of death, they mightn't even cover funeral costs. Generally, these policies come peppered with exclusions too, so a sports-related, or vehicle-related injury could automatically void a claim.
But I already have life cover. Why would I need accident cover?

Good question. Some policies will cover you to an extent. In the event of accidental death, for example, life cover will pay a fixed monthly fee to help meet your dependants' living expenses. But it won't replace a proper accident cover policy that will pay an additional lump sum to pay for other costs associated with a death, such as funeral costs. It's not nice to think about, but funerals aren't cheap!

Another popular excuse is - why would I need accident cover when I already have medical cover? The answer to that is simple. Medical insurance does what it says on the tin. It covers medical expenses. It won't cover the cost of getting to and from medical treatments, or the cost of specialised equipment for the home or car as the result of an accident. And it won't cover other additional expenses incurred as a result of an injury.

Again, many travel insurance policies (often free with credit cards) offer insurance against accident while on holiday. Yet time and time again, these policies simply won't pay out for a wide range of reasons, ranging from the fact that claimants were engaging in a supposedly 'dangerous' sport, such as swimming, or worse still, that the cover only applied during the plane journey and not at your holiday destination.

Accident insurance that isn't quite what it seems

The only good accident insurance policy is the policy that genuinely covers you for costs resulting from an accident, regardless of its severity. And what that means is checking the small print in your policy. Unfortunately, more than often, that's easier said than done. You might have to contact your policy provider to get a copy of the terms and conditions. And, when you do, the exclusions and loopholes might be hidden deep in the small print and masked by legal jargon.

The advice is to talk to a professional, such as personal accident insurance provider Hiscox who will be happy to point out any discrepancies with your current cover and advise you on the best cover for your needs

As for the 'free' accident insurance policies, you might get what you pay for - nothing!