What Is Accident Insurance, and Is It Worth It?

Key takeaways:

Accident insurance is a supplemental plan that covers costs related to an accident or an injury, including nonmedical expenses. This coverage can be useful for people who are prone to accidents and injuries, such as athletes, and people with high-deductible health plans.
Accident insurance benefits and costs vary, so it’s important to understand the specifics of your plan.
Accident insurance is not a substitute for a comprehensive or standard health insurance plan.

There are more than 43 million injury-related visits to the ER in the U.S. each year, according to the CDC. If you have standard health insurance, your coverage will help cover the costs of treating an injury. But it won’t cover all the expenses related to the incident, including lost income and your share of the medical costs.

Accident insurance can help ease the overall financial strain of an injury. Learn more about how accident insurance works and the costs of coverage below.

What is accident insurance?

Accident insurance is a type of supplemental or limited-benefit insurance policy. It provides a payment to help cover your out-of-pocket costs related to a qualifying injury.

Other names for accident insurance include:

Personal injury insurance
Personal accident insurance
Accidental injury insurance
Life accident insurance
Accident-only insurance
Supplemental accident insurance

You can sign up for accident insurance anytime of year. You don’t need to wait for the Affordable Care Act (ACA) open enrollment period or a qualifying life event. (This type of supplemental insurance isn’t subject to ACA regulations.) The coverage begins promptly — sometimes in a matter of days — and you can cancel your plan anytime.

Accident insurance vs. health insurance: What’s the difference?

The purpose of accident insurance is to complement — not replace — standard health insurance. If you’re treated for an injury, your primary health insurance policy typically pays most of the medical costs once you meet your deductible (if you have one). But you may still face hefty out-of-pocket costs for copays or coinsurance, particularly if you have a high-deductible health plan. The lump-sum payout from an accident insurance plan can help with those expenses.

Another difference is that health plans usually require you to use specific doctors or networks to have your care covered with the lowest out-of-pocket costs. Accident insurance will pay benefits no matter who treats you.

Accident insurance vs. life insurance

Accident insurance provides a cash payout when you or a covered family member has a qualified injury. Life insurance pays beneficiaries when you die.

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Free and low-cost health insurance: You may have access to budget-friendly coverage through an Affordable Care Act marketplace plan, Medicaid, job-based insurance, a partner’s plan, or a parent’s plan.
Selecting an insurance plan: Choosing the right health insurance coverage involves evaluating your family’s healthcare needs, understanding the benefits of different plans, and comparing costs.
Are you eligible for Medicaid? If you have a low income and meet other qualifications, you and your family members may be eligible for Medicaid coverage in your state or territory.

How does accident insurance work?

Accident insurance policies can be used to cover individuals or families. Every plan has specific injuries that are covered. And the premiums vary depending on your policy’s annual benefit limit.

Accident insurance policies have no copays, and the deductibles are typically less than $250.

Benefits are based on the severity of injuries. Payouts can range from less than $100 for minor lacerations to $10,000 or more for major accidents. Policies often provide specific benefits for associated medical costs too. For example, your benefits might be set at $350 per day for a hospital stay, $300 for an ambulance ride, and $40 per physical therapy session — services that are typically part of health insurance cost-sharing responsibilities.

What does accident insurance cover?

Accident insurance payouts are triggered by qualifying injuries, which often include:

Burns
Concussions
Dental injuries
Dislocations
Eye injuries
Fractures and broken bones
Lacerations

Once your claim has been approved, you can spend the cash on whatever you need. This could be especially useful if your injury keeps you from working.

Your financial needs after an injury might include:

Rent or mortgage
Utilities
Groceries
Child care

You can also use your payout for recovery-related expenses, such as:

Ambulance transport
ER charges
Diagnostic tests and procedures, such as X-rays
Physical therapy
Medical devices, such as prosthetics

What does accident insurance not cover?

An accident insurance plan won’t issue a payout if you get injured while doing something that’s known to be risky. Check your plan for specific exclusions.

Benefits are not payable if you’re injured because of:

Auto racing
Skydiving
Scuba diving
Professional or semiprofessional athletic competitions
Instances of self-harm
Unlawful activities, such as DUI or illegal substances

How much do accident insurance premiums cost?

Accident insurance premiums are far more affordable than health insurance premiums. Typically, accident insurance premiums cost as little as $6 to more than $50 per month for each covered person. The person’s age, state of residence, and insurer determines the exact amount of the premium.

Some employers offer accident insurance plans to employees alongside group health insurance. Some employers may pay part of the premium. Individuals who buy accident insurance policies on their own are responsible for the entire premium.

How do you make an accident insurance claim?

After you — or a covered family member — experience a qualifying injury, you would file an accident insurance claim. This involves completing and submitting a claim form, along with any necessary supporting documents. A healthcare provider will have to provide some information to your insurer too.

Most plans require you to file a claim within a month or two of an incident. But your plan documents will specify your deadline. Your claim should be processed in a week or two. If approved, your insurance company will send the benefit directly to you.

Do I need accident insurance?

Most people in the U.S. don’t have enough money in a savings account to handle a $1,000 unexpected expense, according to a 2025 Bankrate report on emergency savings. In the same survey, 1 in 4 people said they would use a credit card to cover a $1,000 unexpected expense.

If you’re not financially prepared for the costs of an injury, you might seriously consider accident insurance. Having accident insurance to cover copays, coinsurance, and deductibles could help you avoid medical debt. And unlike employer-based health insurance plans, accident insurance may be portable — meaning you remain eligible regardless of where or whether you’re working.

Is accident insurance worth it?

With low premiums and the possibility of a lump-sum payout, accident insurance is worth it if you don’t have enough money in savings to cover the costs of an injury and the related expenses.

What are the best supplemental alternatives to accident insurance?

Below are some alternatives to accident insurance that can work as stand-alone plans or to supplement your standard health insurance.

Fixed-indemnity insurance

Depending on your needs, fixed-indemnity insurance may be a better fit for you than accident insurance. It’s another type of supplemental insurance that pays you a preset sum for specific events, such as a healthcare provider visit or a surgical procedure.

One type of fixed-indemnity insurance is a hospital indemnity plan. Unlike accident insurance, hospital indemnity insurance covers illness in addition to injury. But it pays a lump sum only if you’re admitted to a hospital for inpatient care. That means you may not be able to file a claim for, say, outpatient treatment of a broken bone or lacerations.

Critical illness insurance

A critical illness insurance policy is a supplemental plan that covers serious medical conditions, such as cancer, a heart attack, or a stroke. This type of plan also offers a lump-sum payout but often excludes many chronic conditions.

Medigap

If you’re enrolled in original Medicare, your best option for covering extra healthcare costs is Medicare supplement insurance, or a Medigap plan. It’s designed to help pay your out-of-pocket costs for Medicare Part A and Part B, including deductibles, copays, and coinsurance.

Frequently asked questions

If you want a payout for injuries during your lifetime, you will need accident insurance or some other type of supplemental insurance. Life insurance pays beneficiaries after you die.

Accident insurance can have many exclusions, so even if you have an injury, it may not be covered by your plan.

Accident insurance covers qualified injuries, which may arise from a car crash. That means the plan’s benefits are activated for only certain injuries from a crash.

Unless a hernia is caused by an accident, it’s not covered. But if a hernia is caused by an accident — and it’s a qualified injury covered by your plan — then you might be eligible for a payout from your accident insurance plan.

The bottom line

Accident insurance provides you with a payout to help cover the costs associated with a qualifying injury. It shouldn’t replace your health insurance coverage, but it can be a useful supplement to cover out-of-pocket medical costs and other expenses after an accident.

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Written by:

Laura Bolt

Laura Bolt is a writer and editor based in Los Angeles. Until 2015, she was a staff editor at Details magazine, where she worked on the culture, health, and features sections.

Edited by:

Cindy George, MPH

Cindy George, MPH, is the senior personal finance editor at GoodRx. She is an endlessly curious health journalist and digital storyteller.

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What Is Accident Insurance, and Is It Worth It?

Key takeaways:

What is accident insurance?