Accident Plan Insurance 101

What's an accident plan? Here's a quick overview of how it works, what's typically covered, and whether you must also have health insurance.



When accidents happen, they typically occur without warning and can be devastating due to victims not being financially or emotionally prepared. However, having an accident insurance plan can help relieve some of that financial burden.

How do accident plans work?

With a typical accident insurance plan, enrolled participants receive a lump-sum benefit for injuries sustained from an accident. When an accident happens (either at or outside of work), the individual files a claim and receives payment directly from an online car insurer or another provider. The amount of payout depends on what type of injury occurred.

What types of accidents are covered?

While there are some exclusions to accident plans, such as self-inflicted wounds and illegal activity, most typical accidents that may occur in your lifetime qualify. This might include sports injuries, car crashes, concussions, breaking your ankle while on vacation, running into a tree on your ski trip, being bit by a dog, and so on.

What is the payout for an accident plan?

While each policy is different, most accident insurance plans offer coverage for the following:

  • Complete dislocations of the hip, knee, shoulder, foot, ankle, hand, lower jaw, wrist, elbow, finger and toe.
  • Fractures of the hip, thigh, vertebrae, vertebral process, pelvis, skull (simple and depressed), leg, forearm, hand, wrist, foot, ankle, kneecap, shoulder blade, collarbone, lower jaw, upper arm, upper jaw, facial bones (except teeth), coccyx, rib, finger and toe.
  • Injuries requiring surgery to eyes, tendons, ligaments, ruptured discs and torn knee cartilage.
  • Burns (generally second-degree burns of at least 25% of the body or third-degree burns covering at least several inches of the body).
  • Lacerations of varying lengths.
  • Air ambulance, normal ambulatory service, and blood or plasma services.
  • Hospital admissions and confinement.
  • Medical fees, including X-rays, office visits and emergency room treatment.
  • Inpatient expenses incurred at a hospital that are applied to the deductible, copayment or coinsurance for the plan.
  • Outpatient expenses incurred at the outpatient center of a hospital, ambulatory surgical center, day surgery facility, MRI facility or emergency room.
  • Sickness inpatient expenses due to illness resulting from an accident.
  • Accidental death and dismemberment.

Accident plans vary on the exact dollar amounts paid out for each injury, so please review your plan’s schedule of benefits for details. Please note that many plans pay an additional amount for accidents incurred from organized sports activity.

Does the payout from an accident plan have to be used for medical services?

No, there is no requirement that says you must spend your accident plan payout for any medically related expenses. You are allowed to spend it on groceries, gas, childcare, clothing, bills, or anything else.

Can I have an accident plan without being enrolled in health insurance?

Accident plans are supplemental plans meant to be used in conjunction with traditional health insurance. While there is no requirement to have major medical insurance to be enrolled in an accident plan, they are not intended to be a replacement.

Have more questions?

If you have more questions about accident insurance, please email and our experts will be happy to assist you.

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