What Is CPA Cover In Car Insurance?

Car insurance is a crucial safety net in today's world, not just for your vehicle but also for your own and your passengers' well-being. Among its various components, Compulsory Personal Accident (CPA) Cover has particular importance for vehicle owners. In 2019, the government of India made CPA a mandatory car insurance policy feature. 

This cover is a mandatory component of all vehicle insurance policies, including cars, two-wheelers, and commercial vehicles. It offers crucial financial protection to drivers in case of bodily injuries or death resulting from accidents. As this part is especially important for people who own a car, it is important to have a basic understanding about the same. In this blog, we’ll take you through the importance and significance of CPA cover.

Understanding CPA Cover

The Insurance Regulatory and Development Authority of India (IRDAI) requires all car insurance policies in India to have Compulsory Personal Accident (CPA) coverage. This type of insurance is designed to protect the vehicle owner financially in case of unexpected events like accidents resulting in death or serious injury while driving. Listed below are the key features of CPA cover:

• Mandatory Inclusion: CPA Cover is a mandatory provision in all motor insurance policies in India, providing financial protection to the owner-driver in case of accidents.
• Coverage Scope: This insurance offers a predetermined sum insured for the owner-driver's accidental death or permanent total disability resulting from a vehicular accident.
• Policy Tenure: It typically aligns with the motor insurance policy tenure, ensuring renewal automatically extends the CPA Cover.
• Sum Insured: As per current guidelines, the minimum sum insured provided is INR 15 lakhs.

Essential Protection for Owner-Drivers

With the increasing number of vehicles and accidents on the road, CPA Cover acts as a crucial financial safety net. It reduces the financial burden on the family of the owner-driver in times of adversity. Integrating CPA cover into your insurance plan is a smart move for comprehensive financial planning.

Personal Accident Insurance Coverage

An Important Component

Personal Accident Insurance Coverage, a part of CPA, directly addresses the well-being of the policyholder. It offers financial stability to the policyholder or their family post-accident.

Wide-Ranging Protection

This coverage safeguards the owner-driver against various accident-related risks, providing financial support for injuries ranging from minor to severe and even death.

Accident Covers Of All Types

We’ve listed the accident cover benefits offered in Compulsory Personal Accident (CPA) coverage: 

1. Accidental Death Benefit: The nominee receives the sum insured in case of the owner-driver's accidental death.
2. Permanent Total Disablement (PTD) Cover: It covers the lump sum payment for permanent total disability.
3. Permanent Partial Disablement (PPD) Cover: It provides compensation for permanent partial disability.
4. Temporary Total Disablement (TTD) Benefit: It offers weekly compensation for temporary total disability, ensuring income support.

Tailored For Comprehensive Protection

Each coverage under Personal Accident Insurance is tailored to provide financial security, ensuring the owner-driver and their family are protected effectively.

Why Do You Need a Personal Accident Cover?

The following factors highlight the importance of a personal accident cover: 

• Essential Financial Shield: This cover offers immediate financial assistance to mitigate the impact of accidents.
• Peace of Mind: It provides assurance that there's a financial safety net in place.
• Financial Support for Dependents: It offers substantial financial support to dependents in case of the policyholder's demise.
• Coverage for Various Incidents: The cover extends protection beyond car accidents to various incidents causing injury.

Personal Accident Policy Claim Eligibility

You must meet specific eligibility criteria for a successful claim:

• Valid Driving Licence: The driver must possess a valid driving licence.
• Policyholder: The claims can be initiated by the policyholder or their immediate family members/legal heirs.
• Adherence to Policy Terms: The claims must align with the policy terms and conditions.
• Immediate Reporting: All the incidents must be reported to the insurer within the stipulated time frame.
• Documentation: The claimants must provide the necessary documents to support the claim.

Premium Rate

The premium for Personal Accident Cover is reasonably nominal, influenced by factors like sum insured, occupation, and age.

• Sum Insured - The chosen coverage amount significantly influences the premium. Opting for higher coverage increases the premium accordingly.
• Occupation - Professional risk levels impact premiums, with individuals in riskier occupations facing slightly higher rates.
• Age of the Policyholder - Premium rates vary across different age brackets, with age playing a pivotal role in determining the premium amount.

Please note that you can get more information about the premium rates offered by various insurance providers by visiting InsuranceDekho. 

Fixed and Transparent Rates

The pricing for mandatory personal accident covers is typically regulated by the Insurance Regulatory and Development Authority of India (IRDAI). It ensures clarity and fairness in premium rates.

Personal Accident Cover Add-Ons

Enhancing Your Protection

Add-ons provide additional layers of financial security, such as passenger cover, income benefits, hospital cash, and ambulance cover.

• Passenger Protection: The personal accident cover is very beneficial for the passengers in the vehicle in the event of an accident.

• Income Support: Receive weekly benefits to compensate for lost income due to temporary disability resulting from an accident.

• Hospitalisation Assistance: The claimant receives daily cash benefits for each day of hospitalisation due to an accident, helping with various expenses not typically covered by health insurance.

• Ambulance Services Coverage: It covers the costs of ambulance services required following an accident.

Tailoring As Per Needs

You can customise your insurance policy with add-ons that suit your requirements and avail comprehensive coverage.

Wise Investment:

Choosing add-ons may raise the premium slightly, yet it guarantees comprehensive financial security, proving to be a wise choice. Carefully assessing and picking the add-ons that match your requirements is essential for maximising benefits.

Benefits of Buying Personal Accident Insurance Along with Car Insurance

Listed below are the advantages of buying a personal accident insurance along with car insurance:

• Holistic Coverage: When you combine Personal Accident Insurance with your Car Insurance, it ensures financial security for both your vehicle and yourself in the event of an accident. It protects both the vehicle and the driver financially.
• Cost-Effective: Purchasing both insurances together can often result in bundled deals or discounts providing a cost-effective solution. 
• Single Point of Contact: Having both policies from the same insurer simplifies policy management and claims processing, offering a single point of contact for all your needs. It simplifies policy management and claims process.
• Peace of Mind: Knowing that you have sufficient coverage brings a sense of security, allowing you to drive with confidence and responsibility on the road.

What is Covered Under Personal Accident Insurance?

Core Inclusions

• Accidental Death: In the event of the policyholder's accidental death, the policy offers compensation to the designated nominee.
• Permanent Total Disability: In case of permanent total disability resulting from an accident, the insurance provides financial assistance. It can be used to manage the loss of income and medical costs.
• Permanent Partial Disability: If the accident results in permanent partial disability, the insurance covers a portion of the sum insured as compensation, proportionate to the severity of the disability.
• Temporary Total Disability: In the event that the policyholder faces temporary disability preventing work, the insurance typically provides a weekly benefit throughout the duration of the incapacity.

Additional Covers (Optional)

• Medical Expenses: It provides coverage for medical expenses arising from treatment after an accident occurs.
• Broken Bones: Certain policies provide one-time payments for fractures or broken bones sustained in an accident.
• Ambulance Charges: The policy reimburses or directly pays for ambulance charges for transporting the policyholder post-accident.

What is Not Covered Under Personal Accident Insurance?

Exclusions include intentional self-harm, influence of intoxicants, engagement in illegal activities, war, civil disturbance, and professional sports accidents.

• Self-Inflicted Harm: Injuries or fatalities resulting from intentional self-harm, suicide, or attempted suicide are not covered for coverage.
• Influence of Substances: Accidents that happen while under the influence of alcohol, drugs, or other intoxicants are not included in the coverage.
• Illegal Activities: Injuries or deaths sustained while engaging in illegal or criminal activities are not covered by the policy.
• Conflict and Civil Unrest: Damages arising from war, invasions, civil war, riots, or similar events are excluded from the policy's coverage.
• Professional Sports Injuries: Accidents that occur during participation in hazardous sports and professional racing are not covered under the policy.

Compulsory Personal Accident (PA) Cover for Owner-Driver

• Legal Requirement: All vehicle owners must possess a PA cover as mandated by the Indian Motor Tariff, ensuring financial protection.
• Coverage Amount: The compulsory PA cover offers a sum insured of Rs 15 lakhs for the owner-driver, providing substantial financial support in case of accident-related death or permanent disability.
• Affordability: With a nominal premium, this cover remains affordable, preventing legal compliance from becoming a financial burden for vehicle owners.
• Ease of Purchase: It can be conveniently acquired alongside your motor insurance policy, streamlining the process for vehicle owners.

Who is Covered:

The Compulsory PA Cover exclusively protects the owner-driver of the vehicle, offering coverage solely to the registered owner who assumes the role of the driver.

Unnamed Passenger PA Cover in Car Insurance

Essential Understanding

• Coverage Explanation: The Unnamed Passenger PA Cover offers insurance protection to all passengers present in your car during an accident. This coverage extends to any passenger involved in the insured event.
• Versatile Security: This insurance is especially advantageous for those frequently accommodating different passengers in their vehicle. It ensures safety for friends, family members, and colleagues alike.
• Claim Procedure: In the regrettable circumstance of an accident resulting in passenger injury or fatality, this cover facilitates the process for claiming compensation for each affected individual.
• Insured Amount: Typically, insurers provide a fixed sum insured per passenger. It's crucial to review and comprehend this amount before finalising the policy purchase.

Why Consider it:

Enhanced Safety Net: This feature boosts financial security for passengers, adding an extra layer of protection, especially useful if you frequently have passengers in your car.

Features of Standalone Owner-Driver Personal Accident Cover:

Detailed Overview:

• Comprehensive Security: This protection ensures broad coverage, including accidental death, permanent total disability, and permanent partial disability from a car accident.

• Adjustable Coverage Amount: Policyholders can select the sum insured that best matches their requirements, offering personalised financial security.

• Expanded Benefits: Many standalone policies provide extra perks, such as coverage for ambulance fees, medical costs, and weekly allowances for temporary total disability.

• Vehicle Independence: Since it's a standalone policy, the coverage isn't tied to a specific vehicle. The owner-driver remains protected regardless of the car they're driving during the accident.
• Convenient Renewals: Renewing a standalone PA cover is hassle-free, independent of your car insurance. Even if you change your car insurance provider, the renewal process remains straightforward.

Making the Right Choice:

It's crucial to compare the features and advantages of both unnamed passenger PA covers and standalone owner-driver PA covers. Understanding their unique offerings helps you to make an informed decision that ensures comprehensive protection. Please ensure to thoroughly review the policy documents to understand the coverage's scope and any limitations it may have.

What If I Have A Paid Driver?

If you hire a paid driver for your vehicle, it's crucial to ensure they have coverage under a Personal Accident policy to protect them from accident-related risks while driving.

• Paid Driver PA Cover: Insurance providers offer specific PA covers tailored for paid drivers, providing financial security in the event of accidental death or permanent disability. These covers ensure necessary support for the drivers and their families in case of accidents.
• Legal Requirement: According to the Indian Motor Tariff, having insurance for your paid driver is mandatory. This ensures that the driver receives essential financial assistance for medical treatment, disability, or death resulting from an accident.
• Premium and Coverage: The premium for paid driver PA cover is typically nominal, often around Rs. 50 for a sum insured of Rs. 2 Lakhs. However, these figures may vary slightly depending on the insurer.

What About My Family Riding In The Car?

It is always advised to evaluate your family's needs and consider the driving risks. Therefore, you should choose a PA cover that provides comprehensive protection for you, your paid driver, and your family members. Making an informed decision ensures essential support in times of need, significantly impacting the aftermath of an accident. You are advised to take a look at the following pointers before considering purchasing a PA:

• Opt for the Unnamed Passenger PA Cover: Extend protection to your family and other passengers in the vehicle by considering the 'Unnamed Passenger Personal Accident Cover'.
• Comprehensive Safety: This cover offers financial assistance in the event of accidental death or permanent total disability of any passenger in the vehicle.
• Tailored Coverage: Choose a sum insured per passenger to ensure adequate financial protection for unforeseen accidents.
• Peace of Mind: Protecting your family under the unnamed passenger PA cover brings peace of mind while traveling, creating a safety net for your loved ones.

Accident Covers Are Mandatory

• Legal Obligation: Accident cover in motor insurance is not optional in India; it's a legal requirement mandated by the Motor Vehicles Act. This mandate aims to protect the vehicle owners and drivers from financial repercussions.
• Driver Protection: Every vehicle owner who drives must possess a Compulsory Personal Accident (CPA) cover with a minimum sum insured of Rs. 15 lakhs. This coverage guarantees financial stability in case of accidental death or permanent total disability.
• Coverage for Paid Drivers: The law dictates that paid drivers must also be covered under a Personal Accident policy, ensuring their protection against driving-related risks.
• Penalties for Non-Compliance: Failure to meet these obligations can result in legal ramifications, including fines and penalties. Understanding the compulsory nature of these covers is crucial to avoid legal complexities and ensure safety for oneself and others.

Wrapping Up

Understanding the complexities of accident coverage is vital for your financial security while driving. Personal Accident Covers, such as the compulsory CPA cover, offer crucial assistance in case of accidents, providing financial relief to ease the burden on the affected individual and their families. Having proper knowledge about the different aspects of Personal Accident Covers is essential for legal compliance and peace of mind. These insurance policies act as a safety net, offering protection and support during uncertain times on the road and in life.

FAQs

Ques 1. What does CPA mean when it comes to auto insurance?

Ans. Compulsory Personal Accident coverage, abbreviated as CPA, ensures financial protection for both the driver and owner of the vehicle in case of accident-related death or permanent disability.

Ques 2. Is CPA coverage required for every owner of a vehicle?

Ans. Yes, according to Indian regulations, all vehicle owners and drivers must have CPA coverage.

Ques 3. To what extent is a CPA's coverage offered?

Ans. Typically, a standard CPA policy provides a minimum insured amount of Rs. 15 lakhs.

Ques 4. Is it possible to increase the amount insured under CPA cover beyond Rs. 15 lakhs?

Ans. Certainly, many insurers offer options to enhance the sum insured for an additional premium.

Ques 5. If I already have a life insurance policy, is CPA coverage still necessary?

Ans. Absolutely, as CPA coverage specifically addresses risks associated with auto accidents, it remains necessary even if you have a life insurance policy.

Ques 6. Do paid drivers get protection from the CPA cover?

Ans. No, CPA protection is exclusively for owner-drivers. Paid drivers require separate Personal Accident (PA) insurance.

Ques 7. How much does the CPA cover premium cost?

Ans. The premium for CPA coverage with a sum insured of Rs. 15 lakhs is usually fixed, although individual insurers may have slight variations.

Ques 8. What distinguishes anonymous passenger PA cover from CPA cover?

Ans. Unnamed passenger PA cover extends additional protection to car occupants during accidents, while CPA cover specifically applies to the owner-driver.

Ques 9. Can I purchase a CPA cover on its own?

Ans. CPA coverage is typically bundled with auto insurance plans, although some insurers may offer standalone options.

Ques 10. If the driver is impaired by drugs or alcohol at the time of the collision, will the CPA coverage still be valid?

Ans. No, CPA coverage does not apply to claims made when the driver is under the influence of drugs or alcohol.