What Is Medical Payments Coverage on Auto Insurance?
Medical Payments coverage is the kind of car insurance coverage that kicks in immediately to assist with any medical payments and bills, health insurance deductibles, and even expenses that a health insurance policy typically wouldn’t cover.
Medical Payments coverage is often offered in a bundle with auto insurance in states that allow it. The immediate medical coverage aspect draws many to MedPay since your health insurance company will typically try to get the money back from your auto insurance company. The latter takes a couple of months to fully pay any medical payments and bills.
Medical Payments coverage also offers you more protection against injuries if you are injured by a car outside your vehicle or as a passenger in another’s vehicle or public transportation and need medical care.
MedPay also allows for what is known as “insurance stacking.” This means you can stack your medical payments coverage limits to more than one vehicle you own.
Your medical payment limit is $5,000 for one of your cars. You want to extend your medical payment policy limits to another car in your household. Your total Medical Payments coverage amount would be $10,000.
While Medical Payments coverage can cover you in ways health insurance might not, Med Pay shouldn’t be used as a health insurance substitute. High Medical Payments coverage limits would be a wise move as optional coverage for health insurance policyholders with low health insurance coverage.
What Does Medical Payments Insurance Cover?
Medical Payments coverage pays your medical expenses for a personal injury, like a situation that would require you to have collision insurance coverage. There are some additional medical costs like ambulance fees and x-rays that medical payments insurance pays for and regular health insurance plans won’t. Specific things that this insurance coverage will pay for is listed below.
- Personal injury treatment - More specifically, the types of personal injury treatment that Medical Payments coverage includes are medical, dental, surgical, and chiropractic in the event of a motor vehicle accident.
- Family member personal injury treatment - Family members using the car and anyone else on the Med Pay policy would also be covered while riding in someone else’s car or as a pedestrian.
- Health insurance co-pays - Medical payment coverage can work with health insurance claims by covering out-of-pocket medical expenses. This would be especially handy if your Medical Payments coverage limits are higher than your health insurance limits.
- Additional hospital fees - X-rays, prostheses, doctor visits, hospital visits, and nursing are more forms of medical treatment covered by medical payments coverage or Med Pay.
- Funeral costs - In the event of a death caused by an accident, all funeral expenses are covered by Medical Payments coverage.
What’s the difference between MedPay and PIP?
In the 12 “no-fault” states—Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, and Utah—medical payments (MedPay) benefits may seem like PIP benefits because they’re so similar. But PIP is mandatory in those states.
Both MedPay and PIP cover medical expenses from auto accidents and they are considered primary coverage, but PIP covers more. It also covers wage reimbursement if you can’t work due to injuries.
How Much Does Medical Payments Coverage Cost?
The best part about medical payments coverage is that it is generally low-cost.
The average cost for medical payments coverage in states like California, Ohio, and Texas are between $3 to $7 per month. Added on to the annual cost of your car insurance, it would only cost an additional $40 to $100 per year.
Medical Payments coverage or Med Pay is highly worth it for many drivers, not having to pay a thousand dollars or a higher co-pay on a medical insurance claim.
Another significant part of medical payments coverage is how little it costs to increase your Med-Pay coverage limits. The standard levels of Med Pay coverage most drivers choose are $1,000 and $5,000. However, some increase their Med-Pay coverage limits to $10,000 or even $100,000 if they have limited health insurance.
According to insurance companies' sources, raising a $2,000 Med Pay coverage limit to $10,000 costs around $10 annually. Medical payments coverage will always cost less than personal injury protection or PIP.
How Much Medical Payments Coverage Do I Need?
The amount of MedPay depends on you. This coverage is cheap so you can still get affordable car insurance even if you add or increase MedPay.
First, look at your budget to see how much you can afford to put towards MedPay coverage. When comparing policies pay attention to these coverage limits:
- Per person coverage limits: The most your insurer will pay for medical expenses for each injured person involved in the accident.
- Per accident coverage limits: The total your insurer will pay for all medical expenses from one accident.
Know Your State’s Laws - Your state’s fault designation affects the need and value of MedPay:
- At-fault states: The driver who causes the accident is liable for all damages. MedPay can add extra protection with medical expense coverage regardless of fault.
- No-fault insurance states: Each driver’s insurance covers their own medical expenses, regardless of fault. In these states PIP is mandatory and MedPay is less comprehensive than PIP so MedPay may not be necessary.
If you live in a no-fault state, carrying MedPay with mandatory PIP may result in duplicate coverage and extra cost. In an at-fault state MedPay can be a valuable layer of protection.
To make sure you get the right amount of coverage, talk to an insurance agent. They can help you based on your financial situation, state laws and existing coverage.
What States Require Medical Payments Coverage?
Maine, Pennsylvania, and New Hampshire are the only states requiring medical payments coverage. Oregon, North Dakota, and Minnesota are the states where it isn’t offered. All other states offer it as an optional auto policy add-on.
Everyone shops for Medical Payments coverage differently since it depends on their specific needs and health insurance coverage.
Policyholders with limited health insurance coverage or high co-pays on medical insurance claims often carry health and Medical Payments coverage together.
Using your health insurance without any out-of-pocket payments is always worth it. Those who frequently drive passengers around will be happy to know the MedPay coverage extends to them.
What are the Limits on Medical Payments Coverage?
Your MedPay limit is the maximum amount your insurance company will pay per person, per accident for medical expenses. These limits are discussed when you first enroll and you have various coverage options to choose from. Make sure you choose the right limit because you will be responsible for any medical bills above your chosen limit.
When choosing a limit, think about your existing health insurance. Most personal health insurance plans require you to meet a deductible or pay co-insurance which can be up to 20% for emergency medical services. By choosing a MedPay limit higher than your health insurance deductible you can use MedPay to pay the deductible and any additional medical bills.
Does Auto Insurance Pay for Medical Expenses?
Liability auto insurance which is required in most states covers property damage liability and bodily injury liability to the other party if you are at fault in an accident. Auto liability insurance does not cover medical expenses for you or your passengers. In some states liability coverage may cover passengers’ medical expenses but this is not guaranteed.
To make sure medical expenses for you and your passengers are covered, consider adding MedPay to your auto insurance policy. MedPay covers medical expenses resulting from an automobile accident regardless of who is at fault.
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