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What is Accident Insurance and Why Might You Need It?

Oct 01, 2019 2 min read John Renz

Key Takeaways

  • There are two types of accident insurance: personal and group.
  • You can purchase accident insurance on your own, but your wallet may feel it.
  • If available, it’s recommended to purchase accident insurance through your employer.



Accidents requiring medical attention are more common than you may think. In fact, one in five Americans visit the ER each year1. And these can be more expensive than you may think, even if you have medical insurance.

When you consider out-of-pocket medical expenses such as copays, deductibles, and medicine — in addition to out-of-pocket non-medical expenses such as lost wages, transportation — the cost of a broken leg can be as much as $16,0002.  

Accident insurance can help you meet that financial challenge.


What accident insurance is, and isn’t 

Accident insurance is not medical insurance or disability insurance. Rather, it can be used to supplement those coverages.

Even with comprehensive medical insurance, an accidental injury could have a negative impact on your finances. Accident insurance pays a benefit (either in a lump sum or per treatment, depending on the policy) that you can use for any purpose including to help you pay some of the co-pays, co-insurance or other out-of-pocket medical expenses. You could also use the benefit to help out-of-pocket non-medical expenses such as transportation or help at home. 


Personal accident insurance

Personal accident insurance offers a lump-sum payment to handle costs resulting from an injury that your primary health insurance provider may not cover.


Group accident insurance

Group accident insurance complements existing medical coverage, bridging any gaps that may form due to out-of-pocket costs. Employees have their needs met, while employers incur no additional benefit expenses.


Is accident insurance worth it?

While it does offer added protection to your existing benefits, accident insurance can be expensive. A more affordable option may be to purchase accident insurance through your employer, union, or professional association, many of which may offer critical illness insurance as an optional benefit at more affordable rates.


How to get accident insurance

You can buy an accident insurance policy on your own, but keep the cost in mind. If you have the option, going through your employer may be the more frugal course of action. Contact your employer’s benefits department or look out for your employer’s open enrollment period to learn what your options are.


What you can do next

Accidents are not only painful and inconvenient, they can also have a negative impact on your finances, even for those with medical insurance. Considering how often folks need to go to the ER, accident insurance may help you protect your hard-earned savings, just in case.

John Renz is a writer focusing on topics related to finance and insurance. He’s also a husband, father, brother, uncle, and son, but doesn’t really make much money at those jobs.





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