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What is Medical Payments Coverage in Car Insurance?

woman paying for her medical expenses at the drugstore

Covering medical costs of personal injury from a car accident has always been the primary function of insurance of any kind.

Homeowners and business owners carry their own home insurance or business insurance to cover medical payments for anyone injured on their premises. Many people also carry health insurance or life insurance. Of course, vehicle owners also carry auto insurance to cover medical payments for other drivers they injure, as is required by law. However, typical auto liability coverage only covers medical payments for the other driver involved in an accident you caused.

Rather than spend more than you’d like on full vehicle insurance coverage, there is a more budget option with medical payments coverage.

Medical payments coverage, also called MedPay for short, is a subform of auto insurance but functions like health insurance.

In an accident you caused, Medical Payments coverage or Med-Pay covers your own medical costs as collision coverage does. At the same time, it also helps to have Medical Payments coverage or MedPay if your health insurance has low health insurance coverage limits and high health insurance premiums. Any gaps in health insurance coverage are also solved by medical payments coverage.

Medical Payments coverage or MedPay is an interesting case since it’s required in some states while others don’t even offer Med Pay.

What is Medical Payments Coverage? How Does Med Pay Work?

Medical Payments coverage or MedPay is the kind of insurance that kicks in immediately to assist with any medical payments and bills, health insurance deductibles, and even expenses (we’ll mention specifically in a moment) that a health insurance policy typically wouldn’t cover.

Medical Payments coverage or MedPay is often offered in a bundle with auto insurance in states that allow it. The immediate medical insurance coverage aspect is what draws many to MedPay since insurance companies tend to take a couple of months to pay any medical payments and bills fully.

Medical Payments coverage or MedPay also offers you more protection with medical payments insurance against injuries if you are injured by a car outside of your vehicle or as a passenger in another’s vehicle.

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.

Let’s say your medical payment limit is $5,000 for one of your cars, and you want to extend your medical payments limit to another car in your household, then your total Medical Payments coverage or MedPay amount would be $10,000.

While Medical Payments coverage or MedPay can cover you in ways health insurance might not, Med Pay shouldn’t be used as a health insurance substitute. High Medical Payments coverage or MedPay limits would be a wise move for health insurance policyholders with low health insurance coverage.

What Does MedPay Cover?

As we go over what Medical Payments coverage or MedPay covers, you’ll get a better idea of what Med-Pay is truly used for.

We previously mentioned that Medical Payments coverage or MedPay covers your medical payments and costs for a personal injury, like a situation that would require you to have collision insurance. There are some additional medical costs like ambulance fees and x-rays that medical payments coverage cover and regular health insurance won’t.

Here is what you will be covered for if you invest in a MedPay policy:

  • Personal injury treatment - More specifically, the types of personal injury treatment that Medical Payments coverage or MedPay includes are medical, dental, surgical, and chiropractic in the event of a car 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 copays - Medical payment coverage or Med-Pay can work in tandem with health insurance claims by covering health insurance deductibles. This would be especially handy if your Medical Payments coverage or MedPay limits are higher than your health insurance limits.
  • Additional hospital fees - X-rays, prostheses, 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 costs are covered by Medical Payments coverage or MedPay.

What Does MedPay Not Cover?

At the same time, there are also some costs of a car accident that medical payments or Med Pay won’t provide any coverage for.

These are often specific costs that other kinds of insurance may cover:

  • Wage reimbursement - If your personal injuries cause you to miss work for a given period of time, you won’t be reimbursed for any missed wages. Personal injury protection or PIP offers this kind of personal injury insurance.
  • Child care - Being limited by a personal injury sustained in an auto accident can put a strain on paying your child care and medical expenses costs. Personal injury protection or PIP also provides medical coverage for this.
  • Injuries to other drivers - Medical treatments for other injured drivers are covered through standard liability car insurance as is required by most states.
  • Unrelated injuries - Any injuries, damage, or medical payments from an accident unrelated to driving or vehicles aren’t covered.

What is Personal Injury Protection (PIP) Insurance? And How Does PIP Compare With Medical Payments Coverage?

Personal Injury Protection or PIP and Medical Payments coverage or MedPay are often grouped together regarding how they function, which is always for covering medical costs in a car accident regardless of the party at fault.

Drivers rarely purchase both PIP and Med-Pay as it would be unnecessary. Like Medical Payments coverage or MedPay, PIP may not be available in your state or may even be required.

Some differences between Personal Injury Protection and Medical Payments Coverage are:

  • Wage reimbursement - It was mentioned that while Medical Payments coverage or MedPay doesn’t cover wages on account of missing days of work because of a personal injury -that is a job for Personal Injury Protection or PIP.
  • Deductible - Unlike Medical Payments coverage or MedPay, Personal Injury Protection or PIP has a deductible whenever you submit a personal injury insurance claim. This personal injury protection limit would be set by the insurance company.
  • State requirements - States have different insurance requirements. Some may require MedPay, while others may require Personal Injury Protection or PIP -12 to be exact. At this point, we’ve already mentioned that there are states where one of the two may not even be available.

How Much Do Drivers Pay for Medical Payments Insurance?

The best part about medical payments insurance or Med-Pay is that it is generally low-cost. The maximum medical payments insurance rate you would get on Medical Payments coverage or MedPay is $10 a month.

Some states like California, Ohio, and Texas log their averages for getting their drivers insured for medical payments anywhere between $3 to $7. Added on to the annual cost of your car insurance, it would only cost an additional $40 to $100 per year. For a lot of drivers, Medical Payments coverage or Med Pay is highly worth it not to have to pay a thousand dollars or a greater co-pay on a medical insurance or health insurance claim.

Another significant part of the cost of medical payments coverage or Med Pay is how little it costs to increase your Med-Pay coverage limits. The standard levels of Med Pay coverage most pick are $1,000 and $5,000. However, some make the call to increase their Med-Pay coverage limits to $10,000 or even $100,000 if they have severely limited health insurance.

According to insurance companies sources, the cost to raise a $2,000 Med Pay coverage limit to $10,000 costs around $10 annually. Not monthly, annually, so you can imagine how economical Med-Pay coverage truly is. Medical Payments coverage or MedPay will always cost less than Personal Injury Protection or PIP as well.

Who is Medical Payments Insurance For?

The only three states where medical payments coverage is required are Maine, Pennsylvania, and New Hampshire. The states where it isn’t offered in Oregon, North Dakota, and Minnesota. All other states offer it as an optional car insurance add-on.

Everyone shops for Medical Payments coverage or MedPay differently since it depends on their specific needs and health insurance coverage.

Policyholders with limited health insurance coverage and high health insurance copays on medical insurance claims often carry health and Medical Payments coverage or MedPay together. It’s always worth it to use your health insurance without any out-of-pocket payments. Those who frequently drive passengers around will be happy to know the MedPay coverage extends to them.

Does Medical Payments Insurance Have Drawbacks?

The only drawback to Medical Payments coverage or MedPay coverage is that it doesn’t cover whether the state offers it or not. The price and rates for Med-Pay are rarely the subjects of scrutiny since they are so low.

Shopping for Medical Payments coverage or MedPay is like shopping around for car insurance -visit national and local brokers while comparing the Med Pay quotes and coverage insurers give you. Choosing between medical payments coverage and personal injury protection or PIP coverage is the real challenge. You can pay more for more medical coverage with PIP or pay less for limited medical coverage with Medical Payments coverage or MedPay.

Looking for cheap auto insurance? Insurance Navy can help you out!

Insurance Navy provides options for auto insurance policies that make being covered simple and budget-friendly. Call us at 888-949-6289 for your free auto insurance quote today. Quotes are also available online via our website and mobile app.

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