Accidental Death Auto Insurance: What You Need To Know

Accidental death insurance is a type of coverage that provides a payout to your family or beneficiaries if your death is caused by an accident. This is different from life insurance, which covers death from any cause. Accidental death insurance is often purchased as a supplement to life insurance, and the two types of policies usually have different payouts and restrictions. Accidental death insurance typically covers death from events such as car crashes, drowning, machinery accidents, and other situations beyond one's control. It's important to note that high-risk hobbies or occupations, death due to drug overdose or drunk driving, and death from natural causes or illness are generally not covered by accidental death insurance.

Accidental death insurance vs. life insurance

Accidental death and dismemberment (AD&D) insurance is a type of life insurance that only pays out a death benefit when the insured dies or is severely injured in a covered accident. This includes specific injuries such as the loss of a limb, eyesight, hearing, or speech. On the other hand, standard life insurance pays out to beneficiaries upon the insured's death, regardless of the cause, except for certain exclusions noted in the policy.

The main difference between AD&D insurance and standard life insurance lies in the circumstances that trigger the policy's benefit. AD&D insurance only covers accidental deaths and injuries defined in the policy, while standard life insurance has an "all-cause" death benefit. AD&D insurance may also be subject to more exclusions, such as injuries sustained during high-risk activities or while under the influence of drugs or alcohol.

In terms of cost, AD&D insurance is typically more affordable than standard life insurance. However, it's important to note that AD&D insurance does not cover deaths due to natural causes or illnesses, which are more common than accidental deaths. Therefore, AD&D insurance is not a substitute for standard life insurance but can be a good supplement for additional protection.

When deciding between the two, it's essential to consider your needs and budget. If you want comprehensive coverage for most causes of death, standard life insurance is the better option. However, if you're on a budget and want additional protection against accidental deaths and injuries, AD&D insurance can be a valuable addition to your policy.

What does a car insurance death benefit cover?

An accidental death benefit is a payment made to the beneficiary of an accidental death insurance policy. This is often a clause or rider connected to a life insurance policy. Accidental death benefit (ADB) life insurance policies usually pay out in addition to the standard benefit payable if the insured died of natural causes.

ADB coverage pays a modest death benefit in the event of a fatal car accident. It can be a lump-sum payment for funeral and burial expenses, medical bills incurred before death, and loss of wages up until the day of death. This coverage is sometimes called automobile death indemnity coverage.

ADB is not a required car insurance coverage type. If you are killed in an auto accident without ADB coverage, your family may have to pay out-of-pocket for your death expenses. If you have other coverage (with auto or life insurance) that will pay out a death benefit, this coverage may be unnecessary.

ADB riders often end at a specific age, which is set by the insurance company. Insurance companies often have strict parameters for what constitutes an accidental death. For example, suicide, crime, dangerous activities and hobbies, occupational accidents, and prior disease or injury may be excluded from coverage.

Who receives the death benefit?

Accidental death insurance is often purchased alongside life insurance, and the two are frequently compared. However, there are some key differences. Unlike life insurance, accidental death insurance will only pay out if the policyholder dies from an accident and not an illness.

Accidental death insurance is also more affordable than life insurance, as it is less likely to pay out. This type of insurance is ideal for those who are young or have a significant amount of debt that would be passed on to their beneficiary.

Accidental death insurance is also known as Accidental Death and Dismemberment (AD&D) insurance, which covers death and severe non-fatal injuries such as loss of a limb or paralysis.

In most cases, the beneficiaries of a death benefit from life insurance are the partner, children, or other close loved ones of the deceased. However, the policyholder can technically name any person or organisation as a beneficiary.

Death benefits are typically paid to the spouse of the deceased, or to the parents in the case of a minor. Depending on the policy, the benefits may also be paid to the deceased's estate.

If the policyholder has named more than one beneficiary, they will need to specify how much of the death benefit they want each beneficiary to receive. It is also possible to name contingent beneficiaries, who can only receive the death benefit if all primary beneficiaries are no longer alive when the policyholder passes away.

How to claim the death payout after a car accident

Accidental death insurance provides a payout to your family if your death is due to an accident. This is different from life insurance, which covers death from any cause. Accidental death insurance is often purchased alongside dismemberment insurance, which covers the loss of limb.

In the tragic event of a death following a car accident, the process to claim the death payout is as follows:

Understand Eligibility

According to the Fatal Accidents Act 1976, eligible claimants include the spouse or civil partner, children, and parents of the deceased. In cases where the deceased was financially supporting other family members, they may also be eligible to make a claim. Proving dependency and demonstrating the impact of the loss are critical in establishing eligibility.

Contact the Authorities

The initial steps involve reporting the fatal road accident to the police and coroner for an inquest hearing. This establishes an official record, which is crucial for subsequent legal proceedings. The police will investigate to establish who is at fault, while the coroner will determine the facts of the case and the cause of death.

Engage Legal Support

Seeking legal advice from solicitors is highly recommended. Legal professionals can guide you through the complex legal process, ensuring all aspects of the claim are addressed with expertise.

Gather Medical Reports and Documentation

Thorough medical reports detailing the cause and extent of the fatal injuries are critical for establishing grounds for compensation. These are usually obtained via the coroner, who will perform a post-mortem and toxicology report. To support dependency claims, collect evidence of the deceased's financial contributions, including income statements, tax returns, and bank statements.

Witness Statements

Statements from witnesses to the accident can strengthen your case by providing additional perspectives. The police will have relevant statements, but detailed witness statements from dependents are also important to set out the nature of the dependency.

Negotiate with Insurers

Once you have the evidence and statements, you can begin negotiating with the insurers involved in the fatal road accident. If the insurers deny fault, the next step may be to commence court proceedings. If blame is not in dispute, a settlement can be negotiated. If the driver at fault is uninsured, a claim can still be made via the Uninsured Motor Insurance Bureau.

Grant of Probate

A death in a road accident will usually require the 'next of kin' to obtain a grant of probate to pursue a claim on behalf of the deceased's estate. This is typically taken out by the widow/widower or parent of a deceased child.

Court Proceedings

If a fair settlement cannot be achieved through negotiation, court proceedings may be initiated. Fatal accident solicitors will present the case, provide evidence, and support the compensation claims. However, it's important to remember that most cases are settled without going to court.

Emotional Support

Recognising the emotional toll of navigating the compensation process after a fatal road accident is crucial. Ensure you have the necessary support to help you through this challenging time.

No Win, No Fee Services

Many legal professionals offer a 'No Win, No Fee' arrangement, which can be beneficial if you're facing financial constraints. With this arrangement, you only pay if the case is successful, and the fees are taken from your compensation amount.

What is not covered by accidental death insurance?

Accidental death insurance provides a payout to your family if your death is due to an accident. It is often compared to life insurance because both coverages offer death benefits. However, accidental death insurance will only cover you if you die from an accident and not from an illness.

Accidental death insurance does not cover death due to natural causes, such as cancer or a heart attack. It also does not cover death from an illness or pre-existing condition.

High-risk hobbies or occupations, such as skydiving or scuba diving, are also not covered by accidental death insurance. If you die during one of these activities, your beneficiary won't receive a payout.

Death due to a drug overdose, drunk driving, or suicide is also typically excluded from accidental death insurance coverage.

Additionally, accidental death insurance does not cover acts of war or death caused by illegal activities.

It's important to carefully read the terms and conditions of your accidental death insurance policy to understand the specific exclusions and limitations.

Frequently asked questions