Accident Insurance

Definition
The definition used by Insurance Companies for an accident is “a sudden, external and undesired force that impacts the body of the insured and results in death or in a medically determinable injury”.

Reviewing the components of the definition:

• Death, or
• Medically determinable injury
• Caused by an accident

The implication of this definition is that there will be no payout if death or injury has resulted from an illness. Accident insurance policies are therefore only a partial solution. Accidents are covered, but illnesses are not. Nothing wrong with that approach, we would say, provided you realised it from the outset.

It is also good to know that the manner of reimbursement of a claim differs from the usual. The insurance does not follow the government (WIA) in determining the payout ratio. In such case, 50% permanent disability would then result in a 50% reimbursement rate. Unfortunately, this is not the case.

If an accident results in death it does obviously mean that the policy will simply pay out the agreed and insured sum. But in the event that we are dealing with a medically determined injury, the insurance carrier will be working with pre-determined percentages.