What is personal accident insurance?
Personal accident insurance pays out if you:
- suffer a serious injury
- die as a result of an accident
- become totally and permanently disabled
Policies pay a fixed amount of money for specific injuries, depending on the level of cover. For example, a policy might pay £10,000 for loss of a limb, £8,000 for loss of an eye, £100,000 for the death of a policyholder, etc. The policy document will set out the levels of cover for different injuries.
In general, insurance policies are there to try to put you back in the position you were in before what you’re claiming for happened.
However that’s not the case for personal accident insurance, as you may expect, it’s often not possible to do this when someone has suffered a serious injury or accident. So instead, personal accident pays out a fixed amount of money if you meet the policy terms.
The difference between personal accident and other types of insurance
Personal accident insurance is often confused with payment protection insurance (PPI) and income protection insurance.
PPI protects your payments if you have an accident, or become sick or unemployed. It covers accidents but is not the same as personal accident insurance. Find out how we can help you if you have a complaint about PPI.
This insurance protects your income if you fall ill and can’t work. It pays a percentage of your income each month. Personal accident policies pay a one-off cash benefit, find out how we can help you if you have a complaint about income protection insurance.
Critical illness cover pays a lump-sum cash payment if you develop a critical illness like cancer, heart failure or stroke. Find out how we can help you if you have a complaint about critical illness insurance.
If you have a complaint about the sale of a group accident policy provided by your employer, you’ll need to ask your employer to complain to us about the sale of the policy.
Types of complaint we see
Complaints about claims
We see complaints where an insurer has declined a claim, because:
- the death or injury wasn’t caused by an accident
- the death or injury wasn’t “solely and directly” caused by an accident – for example, the accident only contributed to the injury
- a specific exclusion clause applies
- the customer’s injury or disability isn’t serious enough to meet the terms of the policy
Complaints about mis-selling
Consumers may complain they were mis-sold a personal accident insurance policy because they:
- didn’t understand the policy they were applying for
- thought the policy would provide benefits in different circumstances than it actually does
- already had cover
- didn’t apply for the policy at all – it was added without their knowledge to another product they took out over the phone
What we look at
To help us consider a complaint fairly, we’ll ask you to provide some information. We’ll make our decision about what happened using evidence provided by you, the financial business and any relevant third parties. In reaching a decision, we consider:
- the relevant law and regulations
- any regulator’s rules and guidance that applied at the time
- any industry codes of conduct in force at the time
- what we consider was good industry practice at the time
We’ll need to decide whether an accident actually happened. You’ll need to provide evidence to show what happened was due to an accident.
However, working out whether an accident happened isn’t always straightforward – and we know this will depend on the wording of your policy and the specific facts of the case.
We’ll look at how your policy defines an accident. Accidents are central to all claims, but we often find the word ‘accident’ isn’t actually used in the policy wording. Some insurers use their own, more specific definition. For example, a policy might say the customer must suffer death or bodily injury as a direct result of an unexpected, external, violent and visible cause.
If your policy gives a specific definition, we’ll need to consider whether the accident being claimed for falls within that definition. If it doesn’t, we’ll usually say it’s fair for the insurer to decline the claim.
Personal accident insurance isn’t usually sold on an advised basis. This means the seller doesn’t have to make sure the policy is suitable for your specific needs. However, you should be given enough information – which is clear, fair and not misleading – to allow you to make an informed choice about whether:
- to take out the insurance
- the insurance policy is right for you
The business that sells you the policy needs to draw your attention to any significant and unusual features of the policy – like key exclusions and restrictions on cover.
We’ll look at all the information given to you at the point of sale including:
- product brochures
- promotional literature
- recommendation letters
- the policy summary>
If the policy wasn’t clearly explained, we may conclude that the policy was mis-sold.
How to complain
If you have a complaint about personal accident insurance, talk to your insurer first. They need to have the chance to put things right. They have to give you their final response within 8 weeks for most types of complaint.
If you’re unhappy with their response, or if they don’t respond, let us know. We’ll check your complaint is something we can deal with, and if it is, we’ll investigate to understand what happened and what went wrong.
Find out more about how to complain.
Putting things right
If we think your insurer has made a mistake or treated you unfairly, we’ll tell them to put things right. This usually means that they need to put you back into the position you'd have been in if the problem hadn't happened.
We’ll also consider whether you’ve experienced any distress or inconvenience as a result of what the business did wrong and whether we think it’s appropriate to award compensation.
Consumer complains to us that his claim is turned down unfairly because his insurer hadn’t clearly defined the term ‘accident’ in his policy
Consumer had no idea she’d been sold a personal accident insurance policy until charges showed on statements
Insurance Personal Accident Insurance
Consumer complains that the definition of ‘accident’ in his policy means his claim is unfairly turned down
Insurance Personal Accident Insurance
Information for financial businesses
If you’re a business looking for information to help you resolve complaints, you can find more detail about complaints about personal accident insurance in the business section of our website.