Accident Insurance: What is it and what does it cover?

In the United States, a large portion of expenses incurred for emergency treatment are due to falls and transportation-related accidents. 

In 2020, the U.S. experienced 55.4 millons of injuries, about two per second. An estimated 200,955 preventable injury-related deaths occurred in homes and communities, or about 78% of all preventable injury-related deaths that year. The death rate per 100,000 population was 47.4 – about 18.4% higher than the 2019 rate.

Accident Insurance: What is it and what does it cover?

Accident insurance is a supplemental insurance plan that can help you cover these unforeseen medical expenses resulting from injury due to an accident, costs which you might otherwise have to pay out of pocket, even if you already have a primary health insurance plan.

Accident Insurance: Article Contents

What Is Accident Insurance?

Accident insurance will help you cover expenses resulting from an accident, including the injuries themselves (fractures, sprains, bruises, etc.) as well as the costs derived from medical attention (ambulance service, hospitalization and rehabilitation, among others). This is a supplemental insurance plan, meaning that it does not form part of the minimum essential coverage outlined in the Affordable Care Act (ACA, also known as "Obamacare").

This type of coverage will help you pay for the out-of-pocket medical expenses you will incur in the event you suffer an injury covered by your policy as the result of an accident.

Once you have met your deductible, you will receive a benefit up to an annual pre-set limit that will provide important economic aid during your recovery to help pay for various expenses that can add up quickly.

We are increasingly exposed to situations that could result in an accident, which can happen when you least expect it. If you live an active lifestyle, have small children, or a limited budget to cover expenses resulting from an accident, you may want to consider purchasing accident insurance, even if you already have a plan with the minimum required coverage.

How Does Accident Insurance Work?

You can purchase an accident insurance plan separately or in combination with another policy, such as a dental, vision, or critical illness policy, ensuring that you have comprehensive and broad coverage. With this type of plan you are not restricted to a network of specialists specific to your plan—you are free to choose the doctor or medical facilities you wish, though staying in-network will save you even more money.

In general, you can choose your deductible amount, as well as the types of injuries and accidents you want covered, and if you also want coverage for other family members, including your spouse, children, and even parents. These factors, along with the level of coverage you choose, will determine the premium you will pay to the insurance company. We recommend that you carefully read the terms and conditions of your policy and make sure you know what is covered by the plan you are purchasing.

What Does Accident Insurance Cover?

Accident insurance plans cover a series of expenses that arise in the event you are the victim of an accident, are injured, and require medical attention. Some examples include:

  • Injuries: bruises, fractures, dislocations, burns, and coma.
  • Medical services for patients admitted to the hospital: intensive care unit, emergency room, rehabilitation, certain types of surgery.
  • Other services: ambulance, diagnostic testing (X-rays, MRIs, scanner) and in-home medical care.

This coverage grants benefits to pay for costs associated with injury caused by an accident, but it is limited and does not provide the minimum essential coverage necessary to avoid being penalized under the ACA.

What Is Disability Insurance?

Disability insurance provides coverage if you are unable to work due to illness or injury. There are three main types:

  • Government subsidized programs— All states require employers to offer most of their workers some type of workers' compensation insurance. Workers' compensation insurance will ensure that you are protected if you become ill or are injured as the result of your work activities. "Compensation" in this case generally includes medical and rehabilitation expenses, as well as the payment of two-thirds of your salary. If, on the other hand, you suffer injuries or become ill as the result of circumstances not related to your work, you will not be able to use this insurance. In addition, the federal government provides Social Security Disability Insurance (SSDI), which covers most workers, and some states offer temporary disability insurance to replace income in the short-term.
  • Employer-sponsored plans (also called "group plans")—Many employers offer coverage to their employees that protects workers' income in the event they become disabled. Depending on the period subject to coverage, there are generally two types of plans: short-term disability (STD), where the benefit lasts for up to two years; and long-term disability (LTD), with benefits that can last for the rest of your life. In addition, you can usually expand the coverage offered by your employer. Lastly, there are some companies that do not offer disability insurance, and instead help you to acquire private coverage. For these types of voluntary programs, the total cost of coverage will be paid directly by you, and not your employer.

Frequently Asked Questions

What is accident insurance?
Accident insurance helps you to cover out-of-pocket expenses when you are injured in an accident. Coverage includes emergency treatment, hospital stays and medical exams, among other services.
Why do I need accident insurance?
Accidents, ranging from insect bites, sprains, falls, or car accidents, just to name a few examples, can happen to all of us at any time, and covering the costs of treatment and recovery can cause serious financial hardship. This type of policy will help you to pay for expenses not covered by your primary health insurance, and are not limited to initial medical attention, but also help to cover your everyday expenses until you are fully recovered.
What requirements do I have to meet to receive the benefit?
Receive treatment for an accidental injury that is covered by your policy (treatment must begin within the period established for this by the insurance company after the accident occurs) and meet the annual deductible outlined in your plan. Amounts above the deductible, up to an annual limit, will be covered.
Can I use the money I receive as I see fit?
Yes. You get to decide how you use the money. The benefit is paid directly to you, not a doctor or hospital, and you get to decide how to spend it (deductibles, copays, rehabilitation, everyday transportation, bills, child care, etc.) It's up to you.
I already have a health insurance plan at work. Why should I also have accident insurance?
Accidents happen when you least expect them and can be very expensive. Even if your coverage is very good, there will always be additional expenses that you will have to pay out of pocket, and which you might not be prepared for. Accident insurance can provide important financial assistance to you and your family when an unexpected situation arises, regardless of how serious it is.
Is the claim process easy?
Yes. You just have to fill out the claim form and send it along with copies of your receipts. A professional will then review them and process your claim within a few days.

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