Your family is heading out on a bike trip. It’s a sunny day, and you’re excited to get out there and enjoy life.
But after a few miles, one of your children falls off their bike. Now, instead of a fun family day out, you’re driving to the hospital and expecting a bunch of medical bills.
Accidents happen all the time, even to people who live relatively risk-free lives, says Jeff Baechle. He’s the vice president of Individual Market Product Strategy at UnitedHealthOne.
And Baechle knows all too well about the above situation. Baechle says he was on a vacation in Colorado one time when a family member was injured in a bike accident.
While accident insurance can’t stop accidents from happening, it can provide you with coverage for some of the costs that happen as a result of an accident.
Why get accident insurance? Here are five things you need to know before purchasing it.
Interested in a supplemental accident insurance plan? Find more information here.
1. Accident insurance can cover everyday injuries.
Some people might think accident insurance is needed only if you’re accident-prone or work a dangerous job.
But Baechle says accident insurance can cover everyday accidents like broken bones or burns. Your accident insurance plan can also include coverage for your children.
What does accident insurance add to your traditional health insurance policy? It all depends on your plan, says Baechle.
In some cases, accident insurance will cover what medical coverage does not. “Some accident plans may pay for accident expenses even if health insurance helps pay for other expenses,” notes Baechle. Reading the fine print can help determine how your policy covers your expenses.
The benefit money you get from accident insurance can potentially even be used for personal expenses like car payments, daycare or even groceries.
In other cases, though, accident insurance can pick up where health insurance leaves off.
Generally, accident insurance has a maximum amount it will pay per accident or per year, so knowing how your plan works will help you avoid surprises.
2. Accident insurance can cover serious injuries — and even death.
Sometimes it’s difficult to think about the worst-case scenario. “There is a reason it’s called an accident,” says Baechle. “No one expects it to happen.”
Some accident insurance can pay you or your family a lump sum for an accidental injury or even accidental death, providing some financial help during a difficult time.
3. Accident insurance may not be as expensive as you think.
“Accident insurance is probably one of the lowest-cost types of insurance you can get,” notes Baechle. While prices and availability vary depending on which state you live in, you can usually take out an accident-only policy for between $6 and $20 per month for an individual.
However, accident policies are priced based on composite, which means that providers use a set price based on the average risk profile of your demographic group, as opposed to your individual profile.
4. Accident insurance works well with certain types of health plans.
If your main health insurance is a high-deductible health plan (HDHP), consider getting a separate accident insurance plan.
The reason? Your monthly premium (insurance bill) is often lower if you have an HDHP. But there’s a catch: You’ll end up paying more healthcare costs as a part of your deductible for an HDHP before insurance kicks in. (In 2022, any plan with a deductible of at least $1,400 for an individual or $2,800 for a family is considered an HDHP.)
So, if you have an HDHP, accident insurance can help pay for costs related to an accident by helping to cover deductibles, as well as copays and coinsurance (fees paid every time you get certain healthcare services).
Accident insurance can also help you pay for other costs related to an accident — such as crutches if you break your leg.
5. Accident insurance also works well with certain types of supplemental insurance.
Suppose you trip, fall, and hurt yourself so badly that you have to miss a lot of work.
If you have separate disability insurance, you’ll get a monthly amount when you’re hurt and can’t work. But if you also have an accident insurance plan, you’ll get a lump sum, too.
If, for example, you go into a coma, a separate critical illness insurance plan will pay you a lump sum for health services related to your qualified medical condition. If you have accident insurance as well, that plan would help pay for covered expenses if your critical care happened as a result of an accident.
The bottom line: While accident insurance isn’t the same as health insurance, it can help cover certain accident-related healthcare expenses, such as deductibles (the amount you must pay before your insurance begins to pay) and the cost of certain treatments that medical insurance may not cover or may only partly cover.
“Unless you have money sitting in savings earmarked for the unexpected, it can be a good idea to consider accident coverage,” notes Baechle. The boost can help you focus on getting better.
Accidents happen. See if an accident insurance plan makes sense for you.
Healthcare.gov. "High Deductible Health Plan (HDHP)." Retrieved from https://www.healthcare.gov/glossary/high-deductible-health-plan/. Accessed January 23, 2022.