The world of private health insurance is no stranger to jargon. The typical policy includes countless words and phrases that seem made up. Most policies also have just as many that look simple enough but mean something completely different. Confused? You’re not alone. In this article, we’re going to focus in on one common but important phrase – accident cover. It can be a surprisingly important inclusion, and understanding it may save you money and help you choose the right policy.
How do you know if you have accident cover?
Predictably, there is no standard way that insurers describe accident cover. ‘Accident cover’, ‘accident override’ and ‘accident inclusion’ are common terms we’ve seen, but these are many other variants. Despite all of the ways it can be described, the simplest way to pick up whether a policy has accident cover is if it includes the word accident. If it does (so long as it’s not an exclusion), the chances are you’re covered for accidents.
Be aware that simply having ambulance cover is not the same as having accident cover. Ambulance cover will pay to get you to the hospital. Accident cover will do the same, but will contribute towards the remaining costs as well.
What does accident cover mean?
Most policies have inclusions and exclusions. Your insurer will pay towards treatment for inclusions, but not exclusions. If you have accident cover, treatment that is required as a result of an accident will be covered, even if it’s otherwise an exclusion.
Using accident cover to your advantage
We think accident cover has the most value for young and healthy policyholders. This could be young adults, but could also apply to children that are dependants on your policy.
Let’s say you are 25 years old, and have no major health issues. You still want to be insured for peace of mind though – if something does happen you want to choose your doctor and skip the waiting lists. You also play a lot of sport, and know that a serious injury on the court could lead to a knee reconstruction, shoulder surgery, or worse. One option is to take out a policy that covers you for shoulder and knee reconstructions and investigations. The problem with this option is that policies don’t have a lot of flexibility with their inclusions. To get cover for your shoulders and knees, you may need to pay for cover for a range of other categories that have little to no value to you.
The alternative is to look at a simpler policy that has accident cover. With this option, you’re not paying for categories that you won’t use, but you are still protected in the case of an accident. If you make the assessment that you’re only likely to need cover because of an accident, this approach makes the most sense. Of course nothing comes free, and the same policy will cost more with accident cover than without. But theres a very good chance that given all of the categories you’re not paying for as exclusions, you will be saving substantially.
Longer term you can and should be reviewing your needs regularly. If your doctor picks up on a degenerative knee condition, you can upgrade to a policy that will cover you for planned, non-accident surgery. While you may need to serve waiting periods, your insurer can’t deny coverage, even for a known pre-existing condition.
Read the fine print
We can’t stress this enough – don’t assume that your treatment will be covered as an accident because it meets the ‘common sense’ definition of an accident. We have seen insurers exclude the following causes from their accident definition:
- A sudden illness
- Injuries sustained during a medical procedure
- Injuries sustained due to alcohol or drug use
- Aggravation of an existing illness
- Damage to teeth caused by eating
And even if your insurer agrees that you have had an accident, there may be a range of compliance boxes to tick and technical hurdles before your insurer will cover you. These differ per insurer, but examples include:
- The accident needs to happen in Australia
- You may need to visit an emergency department/doctor within a specified time after having the accident. This could be as short as 24 hours
- The treatment for your accident may need to have concluded within a certain time period (e.g. 6 months from when you had the accident)
- You will probably need to submit an accident form to your insurer within a predefined timeframe
- Some insurers will cover hospital costs only, and others may contribute towards extras required as a result of the accident
Needless to say, making assumptions is risky. When you’re comparing options, it’s a good idea to speak to your insurer to understand their rules and definitions for an accident. And if you have had an accident and plan on making a claim, get in touch with your insurer as soon as is practical.