Mathew B. Sims is Editor-in-Chief and has authored, edited, and contributed to several books. He has been working in the insurance industry ensuring content is accurate for consumers who are searching for the best policies and rates. He has also been featured on sites like UpJourney.

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Written by Mathew B. Sims
Editor-in-Chief Mathew B. Sims

Jeffrey Manola is an experienced life insurance agent and the founder of Top Quote Life Insurance. His mission when he created Top Quote Life Insurance was to provide online consumers searching for life insurance with the absolute best quotes for term life insurance, permanent life insurance, no medical exam life insurance, and burial insurance. Not only does he strive to provide you with the ...

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Reviewed by Jeffrey Manola
Founder & Licensed Agent Jeffrey Manola

UPDATED: Jun 29, 2022

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Accident insurance gives you peace of mind and protection in the event of a debilitating accident.

Most people have some form of health insurance to cover medical costs. Unfortunately, health insurance rarely covers everything.

In fact, other than routine visits to the doctor and prescriptions, your health plan may not provide any coverage until you pay a deductible.

With accident insurance, you have an extra source of income to help offset the high costs of medical care. However, this type of insurance is not for everyone.

Before signing up for an accident insurance policy, you should understand how these policies work, what they cover, and how they payout.

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Accident Insurance Definition

What is accident insurance? As the name suggests, it is a type of insurance policy that provides a payout after you experience specific kinds of injuries due to a qualifying accident. You receive a tax-free payment, often paid as a lump sum payout.

You may also find it advertised under different names, such as personal accident insurance or supplemental accident insurance.

These policies share features with health insurance and life insurance. As with health plans, accidental insurance may offer coverage for yourself, your spouse, and your children. As life insurance with living benefits, these accidental insurance policies pay you directly.

For example, if your child is injured during a soccer match and has broken a bone, after filing your claim, the insurance provider delivers a set payout. It could also cover injuries that occur at work, at home, or in public.

Accident insurance often includes benefits for common injuries, such as dislocations, fractures, burns, concussions, and lacerations.

Accident insurance should not be confused with accidental death insurance. Accidental death and dismemberment (AD&D) insurance provides a lump sum payout to your beneficiaries if you die from an accident.

Neither option provides payouts for illnesses, disease, or medical conditions. However, some accident insurance policies may also include AD&D in the list of qualifying events.

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What Does Accident Insurance Cover?

The types of accidents and injuries covered vary depending on the insurance company and the policy. Typically, these policies cover various forms of disability and fracture injuries. It may also include lacerations, concussions, eye injuries, burns, and dental injuries.

Always review the entire list of qualifying injuries when comparing policies. Some options may only cover a very limited set of injuries, while others may cover almost anything.

If you break a bone, dislocate your shoulder, or burn yourself, you should have no problem filing a claim. In most cases, the payout is determined based on the accident.

Almost all accepted injuries fall into one of two categories – disability and fracture injuries. Disabilities include permanent injuries that impact your ability to care for yourself or continue working.

You may receive coverage when you lose your eyesight, hearing, speech, or limbs. Those are disabilities.

Fracture injuries include different parts of the body. This may consist of fractures to fingers, kneecaps, elbows, wrists, ankles, feet, ribs, nose, neck, and almost any other part of the body.

These policies typically limit the payout based on the type of injury. For example, you may only receive a couple of hundred dollars for a finger fracture or several thousand dollars for the permanent loss of eyesight.

Personal injury insurance does not cover self-inflicted injuries, accidents related to prior illnesses, or injuries caused by dangerous behavior. If you were under the influence or committing a crime during the accident, you do not receive a payout.

Benefits of Accident Insurance for Family & College Students

These insurance plans tend to include payouts when dependents receive injuries due to accidents.

Accident insurance policies may include benefits for family members. Sometimes, the benefits come with the policy. However, insurance companies may also offer dependent coverage as an extra rider.

With dependent coverage, you receive a payout if you or your spouse gets a qualifying injury. Children often receive coverage until the age of 18 or 21, depending on the policy. However, many insurance companies allow exceptions for college students.

If you already have supplemental insurance before your child reaches the age limit, coverage may continue while your child remains enrolled full time at a college or university.

Understanding the Risks of Accidents Without Insurance

Dealing with an accident without insurance may result in significant hospital bills and other expenses. Accident insurance ensures that you have protection, even when you cannot get regular health insurance.

Without insurance, you need to cover the costs on your own. Hospital bills continue to rise each year. Currently, the medical bill for a trip to the emergency room can cost anywhere from $150 up to $3,300, depending on the treatment needed. Staying just a couple of days may cost you over $10,000.

While hospitals do not charge interest on outstanding bills, they may eventually seek legal recourse if you do not start paying the expenses.

Even if you have health insurance, you may still end up with hefty medical bills. The current average annual deductible for individual health insurance plans is $4,358. Deductibles for family plans averaged $7,983. Accidental injury insurance helps cover these costs.

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What Is the Difference Between Health Insurance and Accident Insurance?

Health insurance can provide a lot of benefits but does have limitations. When you get injured, it may not cover all of your costs. For example, if you go to the hospital for a fractured arm, your health insurance may cover the medical procedures and hospital visit, minus the deductible and copay. However, it does not cover the loss of work.

Disability insurance is another type of policy that offers coverage for debilitating conditions caused by injuries or illnesses. With disability insurance, you receive a monthly payout when the debilitating conditions keep you from working.

As with health insurance, disability insurance also has limitations. If the injury does not keep you from working, you do not receive a benefit.

Accident insurance can provide a way to bridge the gaps in coverage that you have with health insurance and disability insurance.

If you receive an injury not covered by disability insurance, accidental insurance may ensure that you receive a payout.

As health insurance does not cover loss of work, accidental insurance can provide a short-term solution for injuries that keep you from working. It can also help cover deductibles or copays.

How Are the Benefits Paid Out and Who Receives Them?

It is your responsibility to file an accident insurance claim. The insurance provider often needs copies of medical bills to verify injury and costs before a claim is paid.

Similar to cancer and critical illness insurance, you would receive a set amount of money based on the type of cancer or illness. In this case, the accidental insurance payment is based on the type of accidental injury that has occurred.

The insurance plan pays out to the policyholder. The exception to this standard is if the policyholder dies from an accidental injury. If the policy includes an accidental death and dismemberment benefit, the policyholder’s beneficiaries will receive the payout.

With most policies, you get one payment per year, per accident. However, you have a wide range of insurance products and companies to choose from. Some of the available plans may offer multiple payouts variations.

In most cases, you receive a maximum benefit for the year. For example, you receive injuries and $8,000 in medical expenses with a $250 deductible. After paying the deductible, you still owe $7,750. You use $7,750 from your available benefits to cover costs.

After receiving the payout, you may not have any funds available for the rest of the year, depending on the total amount of your benefits your policy offers.

What Are the Requirements to Apply for Coverage?

The requirements vary depending on the insurance company. Every accident insurance policy has different eligibility requirements. However, you need to be at least 18 years of age for most policies.

Unfortunately, there is also typically a cut-off age for these policies. Your accident insurance company may terminate your policy after you reach a specific age. The cut off is often between the ages of 70 and 80.

Another stipulation to consider include the age of your dependents. If you plan to receive a policy with dependent coverage, you should review the age limit. Some policies may not offer coverage for dependents over the age of 21.

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How Much Does Supplemental Insurance Cost?

As with other types of insurance, you pay a premium each month, and if you fail to pay the premium, your coverage lapses.

The cost of the payments varies, depending on a variety of factors, such as:

  • Your age
  • Benefit amount
  • Benefit period
  • Your occupation

The average monthly premium is between $6 and $30. Young, healthy individuals tend to receive lower premiums compared to older individuals. As you get older, the risk of accidental injury increases, resulting in more risk to the insurance company.

The benefit amount and period also impact the premiums. If you want to receive more coverage, you need to pay a higher premium.

Occupations may also affect the cost of accidental insurance. If you work in a high-risk industry, such as fishing, roofing, or logging, you can expect to pay higher premiums.

Advantages of Accident Insurance

Is accident insurance worth it? To find out, review the following advantages:

  • Accidental insurance often includes low monthly premiums
  • Does not require medical underwriting to apply
  • Covers a variety of accidents, giving you peace of mind
  • Protects those that cannot get health insurance
  • May help offset the cost of health insurance deductibles
  • You do not need to worry about healthcare networks

Accidental insurance is often more affordable compared to other insurance policies, especially if you are young and healthy.

Unlike most forms of life insurance, you do not need to worry about medical underwriting. Your current health issues may not impact your premiums.

Accidental injury insurance also covers a wide range of disabilities and fractures. Your regular health insurance may not cover some of the injuries or medical procedures covered by your accidental insurance.

Accident insurance for self-employed individuals allows those without access to affordable health insurance receive coverage for accidents. Remember that it is not a direct replacement for health insurance plans, as it does not cover illnesses and has limited benefits.

One of the main reasons to consider getting this supplemental insurance is to offset the costs of health insurance. It can cover your deductibles, copays, and anything else not covered through your regular health insurance plan.

Unlike health insurance plans, you do not need to deal with healthcare networks. You can receive medical care at any facility. Instead of paying the hospital, the insurance provider pays you directly.

Even if your health insurance covers most of the costs, you can use the payout from the deductible to take more time off work.

Disadvantages of Accident Insurance

Supplemental injury insurance may not provide a suitable option for everyone. Some of the potential drawbacks of these policies include:

  • The policies often offer limited payouts compared to other types of insurance
  • The age limits may keep some people from getting approved
  • The policies work best for those with existing insurance policies

Accident insurance typically offers limited coverage. You may only receive a few thousand dollars, depending on the accident and the policy.

Age limits may become an issue for some individuals. As mentioned, these policies often include an age limit. If you already have a plan, the insurance provider may cancel it when you reach a specific age. Insurance companies may also deny applications when the applicant’s age exceeds the limit.

Accident coverage provides the greatest benefits for those that already have existing insurance policies. However, if you cannot obtain health insurance, accidental insurance still offers a temporary alternative. Just remember that these policies often provide less coverage compared to a health insurance plan.

For example, you may choose an accidental insurance plan with a $10,000 benefit. If you experience an accident that results in $20,000 in medical costs, you still need to pay $10,000 out of pocket.

Health insurance plans would likely cover the full $20,000 minus your deductible. However, accidental insurance can help cover that deductible.

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2020 Best Accidental Insurance Plans

There are a lot of options when it comes to purchasing accidental insurance. Coverage can often be purchased through the workplace as an employee benefit. It can also be purchased as a personal plan. Obtaining a personal accident plan outside of work will provide a greater amount of companies to choose from.

Below is a list of companies the offer the best accidental insurance plans for 2019. For an accidental insurance quote, click the orange button below.

  • Aflac
  • American Advantage
  • Colonial Life
  • Guardian
  • Liberty Mutual
  • Liberty National
  • MetLife
  • National General
  • Sure Bridge
  • United Health Care
  • Unum


Thoughts on Accidental Insurance

If you want more protection against high medical costs, consider getting accidental injury insurance. It is an affordable type of insurance with low monthly premiums and limited benefits, but it may cover costs not covered by your regular health insurance.

Before choosing accidental insurance, review your options. If possible, try to choose a plan that offers benefits exceeding your health insurance deductible.

To discuss available accidental insurance options, contact us to speak to one of our licensed insurance agents.

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