ACC Cover versus Income Protection Insurance – know the difference


The Ins and Outs of ACC have been well-covered and debated in the media recently.  We often get asked about the merits of ACC cover versus income protection insurance when in reality the best result for those insured is a combination of both.

But it’s important not to confuse ACC cover with income protection – it is not called the Accident Compensation Corporation for nothing.  Illness and injury claims are not covered by ACC and even in cases of accidental injury the ACC can ask you to prove your income before you receive payment – which can slow down compensation.

If you are a shareholder employee, partner or sole proprietor earning non-salaried drawings, it’s worth noting that you won’t receive payment from ACC unless you can show a loss of company income as a direct result of your accident.  If there is no subsequent loss of earnings, you will only be entitled to sick pay.

If you want to have all bases covered, you’re better to choose a combination of ACC and income protection insurance.  This means you can insure more income across a wider range of circumstances – both illness and injury not just accident alone.  An accident is defined as A+B=C so injury and progressive or on-going degenerative conditions are not covered by ACC.

As with most things, being forewarned is forearmed, so don’t wait until you have an accident to make sure you know exactly how much money you will receive in compensation payments.

Finally, we recommend that you make your money work for you by avoiding doubling up on ACC and income protection cover.  A timely discussion with ACC to lock in the amount of cover ACC will provide regardless of continued income, will give you a good base from which you can build any additional insurance cover – illness and injury are just as likely to cause loss of income as an accident.  If you need any help or would like us to organise ACC and supplementary insurance cover on your behalf, just give us a call.