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Is Personal Accident Cover Mandatory for Owner-Drivers?

  • Author :
  • TATA AIG Team
  • Published on :
  • 26/05/2022

The Indian Motor Vehicles Act of 1988 makes it mandatory for all vehicle owners to have at least a third-party motor insurance policy. Third-party insurance covers all liabilities arising from any third party claims against the insured vehicle. However, it does not cover any damages caused to the insured vehicle or to the driver.

This is where comprehensive motor insurance comes in. As the name suggests, it offers an all-around, comprehensive coverage that includes damage and theft of the insured vehicle; third-party liabilities cover and a personal accident cover for the owner-driver.

In this article, we will look at the Personal Accident Cover or the PA Cover Insurance part of a motor insurance policy. What does a personal accident cover mean? Is a personal accident cover mandatory? Let us find out!

What does Personal Accident Cover Mean?

A compulsory personal accident cover is an insurance cover provided by motor insurance companies in India that provides cover to the owner-driver when driving the vehicle. The PA cover insurance covers the medical expenses arising from the injuries caused to an owner-driver while in the car.

PA cover for owner-driver also provides a death benefit to the legal heirs/appointed beneficiaries in case of the death of the owner-driver in the accident.

Now that we know what a personal accident cover means, let us understand its benefits.

What are the Advantages of the Personal Accident Cover?

The top benefits of a PA cover for owner-driver are:

  • It covers the medical expenses arising from the treatment of injuries sustained by the owner-driver in a motor accident.
  • It includes all relevant medical expenditures, including treatment costs, hospitalisation charges, medicine costs, etc.
  • In case of permanent disablement of the owner-driver, the PA cover insurance will provide a predetermined monetary benefit.
  • A personal accident cover also provides a sum assured as a death benefit to the loved ones in case the accident leads to the owner-driver’s unfortunate demise.

Is Personal Accident Cover Mandatory in India?

In India, the Motor Vehicles Act makes third-party motor insurance a legal mandate for all vehicle owners. However, it was seen that the claims pertaining to the personal injury of owner-drivers were very high. Thus, the IRDAI realised that along with third-party liabilities, personal accident claims also need to be prioritised.

As a result, the Motor Vehicles Act makes personal accident cover MANDATORY for all vehicle owners in India. The absence of a valid PA cover in insurance can lead to fines for the owner-driver.

The main objective of a PA cover for owner-driver is to ensure that the insured vehicle owner does not have to burden medical expenses in case of any major injuries or permanent disablement. Additionally, vehicle owners can rest assured that in case of their demise due to a motor accident, their families will receive a death benefit.

Thus, looking at the high personal accident claims and the associated benefits of the cover, IRDAI made personal accident cover mandatory under the Motor Vehicles Act.

What is the Amount for PA Cover Insurance Claim in India?

As per the guidelines laid down by the IRDAI, all vehicle owners in India get a personal accident cover of ₹15 lakhs. This PA cover insurance limit was revised from the earlier amount of ₹1 lakh following a landmark order by the Madras High Court in September 2018.

Is it Mandatory to Buy PA Cover Insurance Policy with All Your Motor Insurance Policies?

While the Motor Vehicles Act makes the personal accident cover mandatory for all vehicle owners, there has been a slight change in the guidelines after the January 2019 announcement by IRDAI.

Initially, PA cover insurance was bundled with comprehensive insurance plans, with its premium automatically added to the total premium. This led to car owners buying a new PA cover insurance plan with every additional car insurance plan for a new car. This put unnecessary monetary pressure on car owners.

Understanding that all the additional personal accident covers provide the same benefit, albeit, at a higher cost, IRDAI decided to unbundle PA covers for owner-drivers from the base comprehensive car insurance plans. Therefore, as of 1st January 2019, if vehicle owners already have a PA cover in insurance of equal to or more than ₹15 lakhs, they can choose not to buy another owner-driver PA cover.

Let us understand this with examples:

Mr Tiwari bought his first car in 2017 and has an active comprehensive car insurance plan with an in-built personal accident cover. He is planning to buy his second car soon. Since he already has a PA cover insurance plan of ₹15 lakhs with his existing motor insurance policy, he can skip it when he now buys insurance for the new car. Similarly, Mr Kaushik bought a standalone personal accident cover of ₹30 lakhs as he regularly drove the family car.

He is planning on buying his first car soon. When he buys insurance for the car, he can choose to skip the PA cover for the owner-driver.

However, Mr Tiwari and Mr Kaushik need to have an active PA cover insurance policy and provide proof of the same when buying their car insurance plans.

What is the Premium for a PA Cover Insurance Policy?

The IRDAI has set a standard price of Rs 750 for all in-built personal accident covers with comprehensive car insurance plans. However, if you decide to buy an unbundled or standalone PA cover for the owner-driver, the motor insurance company has been granted complete liberty to decide the cost based on relevant factors.

Can You Buy a PA Cover in Insurance for Your Paid Driver or Passengers?

Yes! Most motor insurance companies offer an add-on personal accident cover for a paid driver and a personal accident cover for passengers with their comprehensive car insurance policies. When you buy insurance for your car, you can opt for the necessary add-ons by paying an additional premium.

The PA cover insurance for paid drivers stemmed from the compensation under the Workmen Compensation Act. As per the Act, if the paid driver gets injured driving the owner’s car, the owner is liable to pay the necessary compensation. In such a case, if you have opted for a separate personal accident cover add-on for your paid driver, your motor insurance company will take care of the liabilities.


Thus, a personal accident cover means coverage for the owner-driver against any medical expenses arising from injuries sustained while in the insured car. It also offers a sum assured to the nominees in case the owner-driver dies in the accident.

Given the high incidences of personal accident claims, IRDAI has made personal accident cover mandatory for car owners. However, they can choose to skip buying it with every new car insurance plan if they already own an owner-driver PA cover worth ₹15 lakhs or more.

If you are looking to buy insurance for your car, you can check out car insurance policies from Tata AIG. Get access to 7500+ cashless garages, quick policy purchase and hassle-free car insurance renewal online, 24x7 online support, seamless claims processes and much more with Tata AIG car insurance plans.

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