Understanding Auto Insurance Medical Coverage

Medical payments coverage, also known as MedPay, is an optional add-on to your auto insurance policy that can help cover medical expenses for you and your passengers in the event of a car accident, regardless of who is at fault. MedPay is available in most states, but not all, and is typically not legally required. In states that don't offer MedPay, Personal Injury Protection (PIP) coverage is usually available instead. PIP is an extension of car insurance that covers medical expenses and is available in some U.S. states.

Personal Injury Protection (PIP)

PIP is available primarily in no-fault states, where each driver's insurance covers their own injuries, regardless of who caused the accident. In these states, PIP is often mandatory. However, in some states, it is optional, and in others, it is not available. The requirements and features of auto insurance vary from state to state, and it's important to check the specific rules and regulations for your state.

The specific details of what is covered by PIP can also vary by state. In most states, PIP covers the policyholder and their resident relatives, and sometimes their passengers as well. Some states may require passengers with their own auto policy to file a claim with their own insurance company for PIP coverage. PIP usually has a minimum coverage amount and a per-person maximum coverage limit.

In addition to covering medical expenses, PIP can also help cover:

• Lost wages due to injuries
• Rehabilitation costs
• Replacement services for tasks the injured person can't perform, such as house cleaning and childcare
• Funeral expenses and survivor benefits

While PIP covers a range of expenses related to injuries from a car accident, it does not cover everything. It typically does not cover bodily injuries to other drivers and their passengers, injuries sustained while committing a crime or driving for work purposes, damage to someone else's property, or damage to the policyholder's vehicle.

Medical Payments Coverage (MedPay)

Medical Payments Coverage, also known as MedPay, is an optional add-on to an auto insurance policy that covers expenses related to vehicular accidents. It is available in most states and is required in Maine and New Hampshire. MedPay is supplemental to your regular health insurance and covers the policyholder, passengers in the policyholder's vehicle, pedestrians struck by the policyholder's vehicle, and the policyholder if they are riding as a passenger in another vehicle or are injured by a vehicle as a pedestrian, bike rider, or public transportation rider.

MedPay covers a range of expenses, including:

• Medical treatments, surgeries, or procedures
• Medical deductibles and co-pays
• Ambulance and emergency medical technician fees
• Hospitalisation and extended nursing services
• Rehabilitation and nursing care
• Some medical equipment, such as prostheses

It is important to note that MedPay does not cover lost wages due to missed work, medical expenses not related to the car accident, or replacement services for tasks the injured party cannot perform due to their injuries, such as housekeeping or childcare.

The cost of MedPay varies depending on factors such as driving history, the type of car driven, and the amount of coverage purchased. It is typically sold in amounts ranging from $1,000 to $5,000 and often costs less than $10 per month.

When deciding on the amount of MedPay coverage to purchase, it is recommended to consider the amount your health insurance will pay for accident-related expenses. If your health insurance does not cover the full cost of potential medical expenses from a car accident, purchasing MedPay protection is advisable.

Bodily Injury Liability Insurance

When it comes to auto insurance, the medical part is referred to as medical payments coverage or MedPay. This type of coverage helps pay for medical expenses resulting from a car accident. It covers the driver, their family, and all passengers in the car at the time of the collision. It can also protect you as a pedestrian if you are hit by a car.

Now, let's focus on Bodily Injury Liability Insurance:

What Bodily Injury Liability Insurance Covers:

• Medical expenses of the injured party: This includes emergency care, hospital fees, follow-up visits, and medical equipment like crutches.
• Lost income: If the injured person is unable to work due to their injuries, Bodily Injury Liability Insurance can compensate for their lost wages.
• Funeral costs: In tragic cases where injuries result in death, this insurance can provide financial support for funeral expenses.
• Pain and suffering: If the injured individual experiences long-lasting emotional trauma or pain due to the accident, this insurance may cover their pain and suffering.
• Legal fees: In the event of a lawsuit, Bodily Injury Liability Insurance can cover legal expenses, including attorney fees and court costs.

Understanding Bodily Injury Liability Limits:

When reviewing your insurance policy, you will typically see three numbers, such as "$100/300/100." These numbers represent your bodily injury liability coverage per person, per accident, and the property damage liability coverage per accident, respectively.

The first number indicates the maximum amount your insurer will pay for each individual's injuries. The second number represents the total coverage for all injuries in a single accident. The third number pertains to property damage coverage, which is separate from bodily injury coverage.

State Requirements and Recommendations:

If your insurance company doesn't offer liability coverage high enough to match your net worth, consider purchasing umbrella insurance to provide additional protection.

How Bodily Injury Liability Insurance Differs from Personal Injury Protection (PIP):

While both coverages relate to medical expenses, there are distinct differences between Bodily Injury Liability Insurance and PIP:

• Bodily Injury Liability Insurance covers the medical costs of other parties when you are at fault in an accident, while PIP covers your own medical expenses and those of your passengers, regardless of who is at fault.
• PIP may also cover lost wages due to a car accident, whereas Bodily Injury Liability Insurance does not.
• PIP limits and costs tend to be significantly higher than those of medical payments coverage.

In summary, Bodily Injury Liability Insurance is an essential aspect of auto insurance that protects you from financial liability when you are at fault in an accident. It covers the medical expenses and related costs of other individuals involved but does not cover your own injuries or those of your household members. Remember to review your state's requirements and consider your financial situation when choosing the appropriate level of coverage.

Uninsured Motorist Property Damage (UMPD)

UMPD is a car insurance requirement in some states, optional in several, and unavailable in about half of all states. It is often combined with uninsured motorist bodily injury (UMBI) coverage, which covers injuries to yourself and your passengers. In some states, UMPD won't cover a hit-and-run unless the driver is identified.

UMPD is distinct from collision coverage, which covers any damage to your vehicle caused by a collision with another vehicle or object, regardless of fault. Collision coverage is not mandatory in any state but may be required if you're leasing or financing a vehicle.

Even if your state doesn't require you to carry UMPD coverage, it may still be a good idea to have it. According to the Insurance Research Council, about 1 in 8 drivers don't have insurance, and 1 in 4 don't have enough coverage. If an uninsured or underinsured driver hits you, they likely won't be able to pay for the repairs to your car.

No-fault insurance laws

In the state of New York, for example, no-fault insurance is mandatory for car owners to obtain a license plate and legally drive their car. As part of the registration process, owners must provide proof of financial responsibility. Unless they can prove they have enough money set aside to cover this responsibility, they must show proof of no-fault insurance with a minimum of $50,000 in coverage per injured person.

No-fault benefits typically include payments for necessary expenses, such as medical treatments, surgeries, procedures, deductibles, co-pays, extended nursing services, hospitalization, psychiatric treatment, physical and occupational therapy, rehabilitation, and any non-medical remedial care chosen for religious reasons. It also covers other reasonable and necessary expenses, such as transportation costs to medical appointments and household help if medically necessary. Additionally, no-fault insurance covers 80% of the claimant's lost wages, and burial expenses in the event of a fatality.

It is important to note that no-fault coverage does not include vehicle repairs. It only covers personal losses suffered due to injuries. There may also be exclusions from receiving no-fault benefits, such as motorcycle passengers, owners driving their own uninsured vehicles, and non-residents of the state.

In terms of filing a claim, most states have specific requirements and time frames. For instance, in New York, a written claim must be filed with the insurer within 30 days of the accident, unless a clear and reasonable justification for an extension is provided.

Frequently asked questions