Auto Insurance: What's The Health Angle?

Auto insurance and health insurance are similar in that they both aim to reduce out-of-pocket medical expenses. While auto insurance covers vehicle damage, it can also include medical benefits that supplement your health insurance. Medical payments coverage, personal injury protection, and uninsured/underinsured motorist bodily injury coverage are types of auto insurance that can help pay for medical expenses after a car accident. These coverages can provide benefits such as medical payments for you and your passengers, lost wages, and funeral costs. However, it's important to understand your existing health insurance coverage before purchasing auto insurance with medical benefits to avoid duplication.

Medical Payments Coverage (MedPay)

Medical Payments Coverage, or MedPay, is an optional add-on to an auto insurance policy that covers expenses related to vehicular accidents. MedPay covers the policyholder, any passengers in their vehicle, and any pedestrians they may injure. It also covers the policyholder if they are injured as a pedestrian, cyclist, or public transport rider, or as a passenger in another vehicle.

MedPay is supplemental to regular health insurance and can be used to cover health insurance deductibles and co-pays. It also covers visits to a doctor or hospital, X-rays and surgery, ambulance and emergency medical technician fees, rehabilitation and nursing care, and some medical equipment, such as prostheses. MedPay takes effect regardless of which driver is considered at fault for the accident.

MedPay is available in most states and is required for drivers in Maine and for those in New Hampshire who purchase insurance. In some states, MedPay can also cover dental and chiropractic services. However, MedPay coverage limits tend to be low, often $10,000 or less.

MedPay can be particularly useful in urban areas, where pedestrians are more likely to be injured due to higher foot traffic. It can also be useful if the policyholder is at fault for the accident, as standard auto insurance policies do not cover drivers who cause accidents due to alcohol or drug use.

When deciding whether to purchase MedPay, it is important to consider the coverage limits and whether there are better options available, such as Personal Injury Protection (PIP) coverage. MedPay is typically sold in small amounts between $1,000 and $5,000, while PIP is sold in larger amounts and is mandatory in some states. In some cases, it may be advantageous to have both MedPay and PIP coverage, as MedPay can help pay for expenses that exceed the PIP limit.

Personal Injury Protection (PIP)

PIP coverage includes medical expenses, such as hospital stays, ambulance rides, doctor's visits, surgery, and prosthetic devices. It can also help cover lost wages due to injuries, rehabilitation costs, and replacement services for tasks that the injured person is unable to perform, such as childcare and house cleaning. Additionally, PIP may provide coverage for funeral expenses and survivor benefits in the event of a fatality.

The specific benefits and limits of PIP insurance vary from state to state. While some states require PIP coverage as part of their "no-fault auto insurance" laws, others make it optional or unavailable. It's important to note that PIP does not cover all injury-related expenses. For instance, it does not cover bodily injuries to the other driver and their passengers or damage to someone else's property.

In conclusion, Personal Injury Protection (PIP) is an essential component of auto insurance that provides financial protection for individuals involved in car accidents, ensuring that they can receive prompt medical care and compensation for related expenses, regardless of fault.

Uninsured/Underinsured Motorists Bodily Injury Coverage

Uninsured Motorist Bodily Injury (UMBI) coverage is a type of car insurance that covers medical expenses for you and your passengers if you are injured in an accident caused by a driver without insurance. This includes hit-and-run incidents, where the driver flees the scene and cannot be identified. UMBI can also cover you if you are injured as a pedestrian or cyclist by an uninsured driver.

UMBI is often sold together with underinsured motorist coverage, which covers accidents caused by a driver with insufficient insurance to cover the costs of the damage they have caused. In some states, UMBI is mandatory, while in others it is optional. Even if it is not required in your state, it is highly recommended, as it can save you from paying medical bills out of pocket if you are hit by an uninsured driver.

The amount of UMBI coverage you need depends on the amount of bodily injury liability insurance you have. It is generally recommended to get an equal amount of UMBI coverage so that you have the same level of protection for yourself and your passengers. UMBI coverage typically does not have a deductible, so it can be beneficial even if you have health insurance with a high deductible.

In addition to medical bills, UMBI can also cover lost wages if you are unable to work due to your injuries, as well as pain and suffering, and funeral expenses if the accident results in a fatality.

Liability Bodily Injury Coverage

This type of coverage comes into effect when the policyholder is deemed at fault for a car accident, and there are injuries to other individuals involved. It is important to note that Liability Bodily Injury Coverage does not cover the policyholder's own medical expenses; instead, it focuses on the expenses of others affected by the accident. This coverage can be particularly valuable in situations where multiple individuals are injured, as it provides a financial safeguard against the potentially high costs of medical care.

The limits of Liability Bodily Injury Coverage are typically represented by two numbers, such as "100/300." In this example, the first number, 100, indicates the maximum amount the insurance company will pay per person for their medical expenses. The second number, 300, represents the total limit per accident, regardless of the number of people injured. It's important to review these limits carefully when selecting an auto insurance policy to ensure adequate coverage in the event of a serious accident.

In addition to being a legal requirement in most states, Liability Bodily Injury Coverage serves as a critical safeguard against financial risk. If you are found at fault for an accident and lack sufficient coverage, you may be personally liable for the medical expenses of those injured. This could result in significant financial strain and even legal consequences. By having adequate Liability Bodily Injury Coverage, you can have peace of mind knowing that you are protected in the event of an accident, and you can avoid the potential burden of covering extensive medical costs out of pocket.

The amount of Liability Bodily Injury Coverage you need will depend on several factors. Firstly, ensure that you meet the minimum requirements set by your state. Additionally, consider the value of your assets and aim to have enough coverage to protect them. Experts generally recommend having Liability Bodily Injury Coverage limits of at least $100,000 per person and $300,000 per accident. However, if your net worth exceeds these amounts, you may want to opt for higher coverage limits to fully protect your assets.

Uninsured Motorists Property Damage Coverage

Uninsured Motorist Property Damage Coverage (UMPD) is an important type of insurance coverage that offers financial protection in the event of an accident with an uninsured or underinsured driver. This type of coverage is especially useful if you don't have collision insurance for your vehicle.

UMPD covers the cost of repairing your car if it is damaged in an accident with an uninsured or underinsured driver. It is important to note that UMPD only applies if the other driver is at fault. Additionally, in some states, UMPD won't cover a hit-and-run incident, so it's essential to review the specific terms of your policy.

The coverage limit for UMPD is typically $3,500, and it is only payable if the uninsured driver is identified. This coverage can be a requirement, optional, or unavailable, depending on the state in which you live. For example, in the District of Columbia, UMPD is offered as an optional coverage.

UMPD is different from collision coverage, which applies to any collision with another vehicle or object, regardless of fault. If you already have collision coverage, UMPD may be redundant. However, if you're concerned about damage caused by uninsured or underinsured drivers, UMPD can provide additional peace of mind.

In summary, UMPD is a valuable form of protection that can help cover the costs of repairing your vehicle after an accident with an uninsured or underinsured driver. It is essential to review your state's requirements and the specific terms of your policy to understand your coverage fully.

Frequently asked questions