Auto Insurance Medical Coverage: How Much Is Enough?

Medical payments coverage, or MedPay, is an optional add-on to your car insurance policy in most states, but in some, it's required. It helps pay for medical and funeral expenses after a car accident, no matter who is at fault. MedPay covers the policyholder, family members driving the car, and any passengers. It also covers medical bills if you or a family member is hit by a car while on foot, riding a bike, or traveling as a passenger in someone else's vehicle. The average cost of medical payments coverage is $2 to $37 per month, with higher coverage limits increasing the premium.

Medical payments coverage (MedPay)

Medical payments coverage, or MedPay, is an optional add-on to an auto insurance policy that covers medical expenses related to vehicular accidents. It is available in most states and is required for drivers in Maine and for those in New Hampshire who purchase insurance. MedPay covers the policyholder, any passengers in their vehicle, any pedestrians they may injure, and the policyholder if they are injured as a pedestrian, bike rider, or public transportation rider.

MedPay covers a range of expenses, including health insurance deductibles and co-pays, hospital visits and stays, ambulance fees, emergency medical services, specific diagnostics and treatments (such as X-rays and surgery), and in some cases, funeral expenses. It is important to note that MedPay does not cover lost wages, replacement services for tasks the injured party cannot perform, or medical expenses not related to the car accident.

The amount of MedPay coverage purchased represents the maximum amount available to each person covered under the policy. For example, if a policyholder purchases $2,000 of MedPay coverage and they and their passenger are hurt in an accident, each would have up to $2,000 in MedPay coverage. MedPay coverage limits typically range from $1,000 to $5,000, and the cost of increasing coverage is relatively low.

MedPay is different from personal injury protection (PIP) in that PIP is mandatory in no-fault states and offers more extensive coverage, including wage reimbursement and replacement services. MedPay, on the other hand, typically has lower coverage limits and does not include wage reimbursement or replacement services. MedPay also differs from bodily injury liability insurance, which covers bodily injury to a person in another car when the policyholder is at fault.

In summary, MedPay can provide valuable financial protection in the event of a vehicular accident, especially for those without comprehensive health insurance or with high deductibles and co-pays. It ensures that medical expenses will be covered regardless of who is at fault in the accident.

Personal injury protection (PIP)

PIP covers medical expenses, lost earnings, and other reasonable and necessary expenses, such as household help and transportation to medical providers, for a driver or passenger injured in an accident or a pedestrian injured by a car. It also covers medical expenses if you are injured in someone else's car, or if you are hit by a car as a pedestrian or cyclist.

PIP policies have a minimum coverage amount and a per-person maximum coverage limit, which is usually no more than $25,000. The per-person maximum coverage limit means that coverage is limited to a certain amount per person if multiple people are injured in an accident. For example, if you have a $5,000 medical payments limit and you, your spouse, and your two children are injured in an auto accident, each of you could collect up to $5,000 in medical payments coverage for a total of $20,000.

In addition to making medical care affordable, PIP often provides payments for lost income, childcare, and funeral expenses related to the accident. PIP is not the same as liability insurance, which only covers expenses incurred by third parties. PIP is also different from bodily injury liability coverage, which provides coverage for medical expenses related to someone who is injured when the policyholder is at fault.

Uninsured/underinsured motorist coverage

Uninsured motorist coverage specifically protects you if you're hit by a driver with no auto insurance. This coverage is mandatory in many states and highly recommended for all drivers. Underinsured motorist coverage, which is usually offered alongside uninsured motorist coverage, protects you financially if you're in an accident with a driver who doesn't have enough insurance to cover the damages or injuries they caused. This type of coverage is also required in several states.

If you're injured or your vehicle is damaged in an accident with an uninsured or underinsured driver, you could end up paying for medical bills or vehicle repairs out of pocket. Even if you file a claim against your own policy, you may have a large collision deductible or insufficient medical payments/personal injury protection to cover the injuries sustained by you or your passengers.

It's important to note that some states may require a deductible for UMPD/UIMPD, but UMBI/UIMBI generally doesn't include a deductible. This means that having this coverage can provide financial protection and peace of mind in the event of an accident with an uninsured or underinsured driver.

When considering uninsured/underinsured motorist coverage, it's essential to review your health insurance policy as well. While your health insurance may overlap with UMBI and UIMBI coverage, there are a few things to keep in mind. First, check if your health insurance covers injuries sustained in an auto accident, as some plans may have exclusions or limitations. Additionally, consider the deductible on your health insurance plan. If it's high, having UMBI and UIMBI coverage without a deductible can be beneficial.

Furthermore, if you frequently have passengers who don't have their own health insurance, UMBI and UIMBI coverage can provide valuable protection for them. It's also worth noting that UMBI and UIMBI may cover lost wages, which some health insurance plans don't include.

When choosing your uninsured/underinsured motorist coverage limits, consider matching the amount of your liability coverage. In some states, you may be required to choose identical limits. For example, if your liability coverage is $50,000 per person and $100,000 per accident, selecting the same limits for UMBI and UIMBI ensures comprehensive protection.

In conclusion, uninsured/underinsured motorist coverage is a vital component of auto insurance that can provide financial protection in the event of an accident with an uninsured or underinsured driver. By understanding the specifics of this coverage and reviewing your health insurance policy, you can make informed decisions about the level of protection you need.

Health insurance with auto insurance

Health insurance and auto insurance are two different products. Your health insurance pays for your doctor visits and hospitalisation, while your auto insurance covers damage to your vehicle or other people's vehicles. However, if you're injured in a car accident, your auto insurance can help with medical bills.

Auto Insurance for Medical Bills

Liability, comprehensive, and collision insurance won't cover your medical expenses from a car accident, but the following coverages will:

• Medical payments coverage (MedPay): MedPay is available in most states and is required for drivers in Maine and those in New Hampshire who purchase insurance. It covers injuries to you and your passengers in an accident, regardless of who is at fault. It also covers injuries you suffer while riding in someone else's car or if you're hit by a car as a pedestrian or cyclist. MedPay can also cover your health insurance deductible and co-pays, as well as dental and chiropractic services. However, MedPay coverage usually has low limits, often $10,000 or less.
• Personal injury protection ( PIP ): PIP is required in about a dozen states and offered in about ten others. Like MedPay, it covers you and your passengers in an accident, even if you caused it. It also covers you when you're in another person's car, bicycling, or on foot. PIP tends to cost more than MedPay but typically has higher coverage limits and includes things like lost wages, childcare services, and funeral costs.
• Uninsured/underinsured motorists bodily injury : This coverage pays for your medical expenses and car repairs if you're hit or injured by another driver who doesn't have insurance or has only the minimum required liability coverage. It is required in 20 states.

Weighing Your Options

Whether or not you need auto insurance with medical coverage depends on your health plan. If your state requires MedPay, PIP, or uninsured motorist coverage, the minimum required level may not be sufficient, especially in the case of a serious accident.

It may be a good idea to purchase PIP or MedPay if you have a high-deductible health plan or one with many out-of-pocket costs. PIP or MedPay can step in before your health coverage begins or after you reach its limits, and they may offer services that your health insurance doesn't. Additionally, they can often pay faster than your health insurance company.

While adding MedPay, PIP, or uninsured motorist coverage to your auto insurance policy will increase your premium, the benefits can be significant if you're injured in an accident.

MedPay vs. PIP

It's easy to confuse MedPay with personal injury protection (PIP). PIP is sometimes called no-fault insurance because it pays for medical treatments after a car accident, regardless of who caused the crash. PIP has more extensive benefits than MedPay, such as wage reimbursement if injuries force you to miss work. However, one drawback of PIP is that it often includes a deductible, while MedPay typically doesn't.

MedPay vs PIP

MedPay and PIP are two types of auto insurance coverage that pay for injuries to the policyholder and their passengers in an accident, regardless of who is at fault. While these coverages have some things in common, they are different in terms of what they cover and where they are available.

MedPay (Medical Payments)

MedPay is an optional coverage in all but two states: Maine and New Hampshire. It covers medical expenses for the insured, other drivers listed on the policy, members of the insured's household, and passengers. MedPay also covers medical expenses if you are injured as a pedestrian, cyclist, or while taking public transportation. It is designed to complement standard liability coverage and can be used to supplement an existing health insurance plan or function as primary medical coverage after an accident.

MedPay typically covers:

• Ambulance transportation
• Hospitalization
• X-rays
• Nursing care
• Medications
• Prosthetics
• Funeral expenses

MedPay does not cover lost wages, rehabilitation costs, or other non-medical expenses. It is relatively inexpensive, adding about $5 per month to your premium, with a maximum payout between $5,000 and $10,000 per person.

PIP (Personal Injury Protection)

PIP is required in all no-fault states and a few tort states, including Oregon, Delaware, Maryland, and Washington. PIP provides comprehensive benefits that go beyond medical bills, including:

• Medical expenses (ambulance, doctors, hospitalization, medication, psychiatric care, rehabilitation, dental care, etc.)
• Funeral expenses
• Lost wages
• Child care and household expenses
• Survivor's loss (breadwinner's income for surviving dependents)

PIP coverage limits vary between states, ranging from a minimum of $2,500 per accident to unlimited medical expenses and permanent injury benefits of up to $250,000. The cost of PIP coverage also varies significantly between states.

MedPay vs. PIP

While both MedPay and PIP cover medical bills after an auto accident, MedPay does not include coverage for lost wages, rehabilitation, or other essential services like PIP does. If your state requires PIP, adding MedPay may be unnecessary unless you want to supplement a low PIP limit. MedPay is typically cheaper than PIP, but it offers more limited coverage.

Frequently asked questions