Latency coverage under personal accident policies:
Latency refers to the time gap between the causation of injury from an accident and the consequence or outcome of the same. For instance, traumatic brain injuries (TBI) can cause progressive neurodegeneration and disability or death several weeks or months after the accident.
A typical insuring agreement of a PA policy says as under:
“If following Bodily injury which solely and directly causes death or disablement to an insured person within 12 months of injury as stated in Table of Benefits, we shall pay to you or your legal representative/assignee/nominee the sum or sums hereinafter outlined in Table of Benefits.”
Thus latency cover is available up to 12 months. It’s not necessary that the policy has to be in force when the death or disablement happened so long as the injury happened during the currency of the policy. If the death or disablement occurs after 12 months of the occurrence of injury, the policy wouldn’t respond.
However, under the compulsory personal accident (CPA) cover given as part of the motor insurance policy, the latency is not 12 months, but 6.
“The Company undertakes to pay compensation as per the following scale for bodily injury/ death sustained by the owner-driver of the vehicle, in direct connection with the vehicle insured or whilst driving or mounting into/dismounting from the vehicle insured or whilst traveling in it as a co-driver, caused by violent accidental external and visible means which independent of any other cause shall within six calendar months of such injury result in…”
Let’s say someone is injured in an accident and is treated for 3 months after which he is discharged. He claims for temporary total disablement (TTD) under standard PA policy. Another three months passes, he is readmitted and then unfortunately dies from complications following the same injuries that were treated earlier.
Can his nominee claim for accidental death?
Yes it can be paid after setting off any monies already received under TTD benefit. Some policies may also have enabling provisions as under:
“We will pay the Sum Insured, as mentioned in the Policy Schedule, for any injury that is caused due to an Accident that immediately or eventually results in Your loss of life, provided that such loss occurs under the circumstances described in the policy within 365 Days from the date of the Accident which caused the Injury. We will pay the Sum Insured less any other amount paid or payable under Permanent Total Disability, Permanent Partial Disability or Temporary Total Disablement sections of this Policy, if these coverage are offered under this Policy, as the result of the same Accident.”
But some PA (personal accident) policies may have the following exclusion:
“We will not be liable for any other payment after a claim under one of the benefits in the Table of Benefits has been admitted and becomes payable.”
This exclusion could be used as an estoppel against an additional claim being mounted where already a claim for another benefit has been admitted or paid.
Careful consideration should be given to the latency provisions in the PA (personal accident) policies to ensure that there are no unpleasant surprises at the time of claims.
