Alyssa Lane
Medical payments coverage, or MedPay, is an optional add-on to your auto insurance policy that can help cover medical expenses for injuries sustained by you and your passengers in a car accident, regardless of who is at fault. MedPay can also cover medical expenses if you are injured while riding in someone else's car, or if you are hit by a car as a pedestrian or cyclist. While MedPay is not available in all states, it is required for drivers in Maine and New Hampshire. The coverage limit for MedPay is typically $10,000 or less, and it does not cover situations where your injuries force you to miss work. Personal Injury Protection (PIP) is similar to MedPay but is required in about a dozen states and offered in about ten others. Unlike MedPay, PIP covers lost wages and has higher coverage limits. Uninsured/underinsured motorist bodily injury coverage (UM/UIM) pays medical expenses for you and your passengers if you are hit or injured by another driver who doesn't have insurance or has insufficient coverage.
| Characteristics | Values |
|---|---|
| Coverage | Medical expenses for injuries sustained in a car accident |
| Medical expenses for injuries sustained as a pedestrian or cyclist | |
| Medical expenses for injuries sustained in someone else's car | |
| Medical deductibles and co-pays | |
| Ambulance fees | |
| Dental and chiropractic services | |
| Funeral costs | |
| Lost wages | |
| Availability | Available in most states |
| Required in Maine and for those in New Hampshire | |
| Required in about a dozen "no-fault" states | |
| Cost | Low-cost option |
| Standard policies typically allow for coverage between $1,000 and $100,000 | |
| The cost of moving from $2,000 to $10,000 in medical payments coverage is around $10 per year |
What You'll Learn
Medical payments coverage (MedPay)
Medical payments coverage, or MedPay, is an optional add-on to your auto insurance policy in most states, but it is required in Maine and New Hampshire. MedPay covers medical expenses and funeral costs after a car accident, no matter who is at fault. It also pays the medical bills if you or one of your family members is hit by a car while on foot, riding a bike, or traveling as a passenger in someone else's vehicle. MedPay can also cover health insurance deductibles and co-pays, ambulance fees, and emergency room services. It is important to note that MedPay does not cover wage reimbursement or lost wages if injuries force you to miss work.
The availability of medical payments coverage varies by state, and the coverage amount you buy helps determine your MedPay premium. The more your insurance policy covers, the higher the cost will be. MedPay coverage limits are typically between $1,000 and $100,000, and the limit refers to the maximum amount paid for each injured individual rather than the total available coverage limit. For example, if you have a $5,000 medical payments limit and four people are injured in an auto accident, each person could collect up to $5,000 in medical payments coverage for a total of $20,000.
MedPay is supplemental to your regular health insurance, and whether it is the primary coverage depends on your health insurance policy. MedPay can be especially useful if you have a high-deductible health plan or one with many out-of-pocket costs. It can also be beneficial if you frequently drive passengers who are not family members, as MedPay typically applies to anyone riding in the car at the time of the accident.
When deciding on the MedPay coverage limit, it is important to consider your financial situation and health insurance plan. If you have high deductibles and co-pays, you may want to opt for a higher MedPay limit. On the other hand, if your health insurance plan has low deductibles and co-pays, a few thousand dollars' worth of MedPay coverage might be sufficient.
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Personal injury protection (PIP)
PIP is required in about a dozen states and is offered in about ten others. It covers you and your passengers in an accident, even if you caused it, and it follows you when you're in another person's car, bicycling, or on foot. PIP tends to cost more than MedPay, but it typically has higher coverage limits and often includes things your health insurance might not, like lost wages, necessary services such as childcare, and funeral costs.
PIP policies have a minimum coverage amount and a per-person maximum coverage limit. The minimum coverage requirements are set by the state governments and can vary, while the maximums are set by insurance companies and are usually no more than $25,000. For example, in Florida, where the minimum personal injury protection policy is $10,000, if you caused an accident that resulted in injuries requiring medical treatment costing $15,000, your PIP would cover $10,000. If you purchased a plan with more coverage, your insurance would pay for expenses up to that limit.
PIP is not the same as liability insurance. With PIP, medical costs are covered for the policyholders and anyone in their vehicle at the time of the incident, no matter who is at fault. With liability insurance, medical costs are covered for the third party, not the policyholder, if it is determined that the policyholder is at fault. 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.
In addition to paying for medical care, PIP often provides payments for lost income, childcare, and funeral expenses related to the accident. This makes it a valuable form of coverage for those who may not have comprehensive health insurance or who may need additional financial support during their recovery.
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Uninsured/underinsured motorist bodily injury (UM/UIM)
UM/UIM coverage is mandatory in many states and highly recommended for all drivers. It consists of two main components: uninsured motorist coverage and underinsured motorist coverage. Uninsured motorist coverage protects you if you're hit by a driver with no auto insurance, while underinsured motorist coverage kicks in when the other driver doesn't have sufficient insurance to cover the damages or injuries they caused.
If you're hit by an uninsured driver, uninsured motorist bodily injury (UMBI) coverage may pay medical bills for both you and your passengers. On the other hand, if you're hit by a driver with insufficient insurance, underinsured motorist bodily injury (UIMBI) coverage can step in to cover medical expenses for you and your passengers.
It's important to note that UM/UIM coverage is not just for vehicle repairs but also for injuries and other related damages. This can include medical expenses, lost wages due to time away from work, and even pain and suffering. Additionally, in some states, UM/UIM coverage may be required to have a deductible, but this is generally not the case for UMBI/UIMBI.
When deciding on UM/UIM coverage limits, it's recommended to match the amount of your liability coverage. For example, if your liability coverage is $50,000 per person and $100,000 per accident, you may want to choose the same limits for UMBI and UIMBI. This ensures that you have adequate protection in the event of a serious accident.
Even if your state doesn't mandate UM/UIM coverage, it's essential to consider the risks of driving without it. Without this coverage, you could be left paying for medical bills and vehicle repairs out of your own pocket if you're involved in an accident with an uninsured or underinsured driver. Therefore, UM/UIM coverage provides valuable peace of mind and financial protection.
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Bodily injury liability insurance
Another significant benefit of bodily injury liability insurance is its coverage of legal fees. If a policyholder causes an accident, they may face a lawsuit, and this type of insurance can cover the cost of a defence attorney and court fees, provided the policy includes sufficient liability coverage. The liability limits on insurance policies typically consist of three numbers, such as "100/300/100." The first two numbers represent the per-person and per-accident bodily injury liability coverage, respectively, while the third number indicates property damage liability coverage.
When determining the appropriate amount of bodily injury liability insurance to purchase, it is recommended to consider choosing a limit close to one's net worth. This ensures that one's financial assets are protected in the event of an accident. While the minimum required amount varies by state, opting for higher coverage limits can provide greater peace of mind and comprehensive protection.
In summary, bodily injury liability insurance is a crucial component of vehicle insurance, offering financial protection and peace of mind to policyholders. By covering medical expenses, lost income, funeral costs, and legal fees, this type of insurance helps policyholders fulfil their responsibilities to injured parties while also safeguarding their own financial well-being.
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Medical payments insurance
MedPay covers medical expenses for you and your passengers resulting from a car accident, regardless of who is at fault. It can also cover medical expenses if you are injured while riding in someone else's car, or if you are hit by a car as a pedestrian or cyclist. MedPay can also help cover out-of-pocket costs associated with health insurance, such as deductibles and copays. In some states, MedPay can also cover dental and chiropractic services, as well as ambulance fees.
The coverage limits for MedPay typically range from $1,000 to $10,000, depending on the state and insurer. It is generally recommended to carry coverage equal to your health insurance deductible so that MedPay can be used to cover any out-of-pocket medical expenses. If you do not have health insurance, consider carrying a higher MedPay limit to help pay for medical bills after an accident.
When determining your MedPay coverage needs, it is important to consider the amount your health insurance will pay for accident-related injury expenses. If your health insurance does not cover the full amount of potential medical costs from a car accident, you may want to consider purchasing MedPay protection. Keep in mind that the coverage amount you buy will affect your MedPay premium.
While MedPay can provide valuable financial protection, it is important to note that it does not cover all situations. For example, MedPay will not cover wage reimbursement if you are unable to work due to your injuries. Additionally, MedPay does not cover injuries caused to other drivers.
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Frequently asked questions
Medical payments coverage in auto insurance, also known as MedPay, helps pay for medical expenses that result from a car accident. It covers the driver, their family members, and passengers in the car at the time of the accident, as well as pedestrians and cyclists who are struck by a vehicle.
MedPay covers medical treatments, surgeries, procedures, deductibles, co-pays, extended nursing services, hospitalization, ambulance fees, chiropractic, dental, prosthetics, and funeral expenses.
MedPay kicks in quickly to pay medical bills, health insurance deductibles, and co-pays up to the policy limits. Unlike auto liability insurance, the policy limits on MedPay refer to the amount available for each injured individual, not the total available coverage limit.
PIP is required in about a dozen states and offered in about ten others, while MedPay is available in most states and is required in Maine and New Hampshire. PIP covers lost wages, while MedPay does not. PIP limits and costs are typically much higher than MedPay limits.
Bodily injury coverage only pays for medical bills for people other than the driver or their family members if the driver is at fault in an accident. MedPay covers the driver, their family, and passengers regardless of who is at fault.
MedPay can be useful even if you have health insurance, especially if you have a high deductible or expensive co-pays. MedPay can also cover your passengers, who may not be on your health insurance plan.
