Auto Insurance Medical Coverage: Everything You Need To Know

Photo credit: Ngampol Thongsai / EyeEm - Getty Images
Photo credit: Ngampol Thongsai / EyeEm - Getty Images

Auto insurance medical coverage, sometimes called MedPay, is an optional policy that covers the cost of auto accident injuries. You can make a claim against your medical payments coverage even if you were at fault for the accident. Coverage for medical payments usually comes with a low premium and can save you thousands out of pocket costs in the event of a serious accident.

What Does an Auto Insurance Medical Policy Cover?

If you or the passengers in your vehicle suffer from serious injuries after an auto accident, this policy will pay for the resulting medical expenses. If you have health insurance to cover part of your medical bills, your MedPay policy can pay for out-of-pocket expenses such as deductibles and copays as well. It will also pay for transportation to the hospital after the accident, including the cost of emergency medical or ambulance services. You can also use this policy for diagnostic procedures such as lab tests and x-rays as well as surgeries, medications, and other treatments.

Bankrate notes that this type of insurance policy follows you and not your vehicle. In other words, your MedPay policy will cover you for accidents that happen in someone else's car, as a passenger, or as a pedestrian or cyclist. The website recommends that drivers carry $50,000 and even up to $100,000 in medical payments coverage if they can afford to do so, citing the rising cost of medical care in the face of catastrophic injury.

How Does Medical Payments Coverage Work?

While MedPay is optional, Allstate notes that it can prevent you from significant out-of-pocket medical expenses if you are determined to be at-fault in a car accident. Unlike liability coverage, which most states legally require and pays for others' medical bills and property damage if you cause an accident, you do not have to purchase medical payments coverage.

It is important that you clearly understand the coverage limits of your MedPay policy. According to Bankrate, the amount of insurance you buy is the limit for each covered person under the policy. This means that, if you have $10,000 in MedPay coverage and four family members, your total coverage would be up to $40,000 if you all suffered auto accident related injuries.

Currently, you can stack your auto coverage in 30 states. That means you can multiply the amount of MedPay coverage available by the number of vehicles covered under your auto insurance policy.

Having medical payments coverage also allows you to access health care right away after an auto accident, which is especially important if you don't have medical insurance as well. While you can make a claim with the at-fault driver's liability policy if someone else caused the crash, it can take several months to receive those funds, which is quite a long time if you have serious injuries that require extensive medical care. Value Penguin reports that with MedPay, you pay your medical bills up front and get reimbursed from your policy right away.

How Much Does Medical Payments Coverage Cost?

Bankrate reports the average monthly cost by insurance company for medical payments coverage as follows:

  • Allstate - $26

  • Esurance - $28.56

  • GEICO - $27.52

  • Progressive - $26

  • State Farm - $4.37

These quotes are for $10,000 in medical payments coverage for the website's sample driver, a 30-year-old married Indiana man who has insurance on a Toyota Camry.

Does Medical Payments Coverage Overlap With Other Types of Auto Insurance?

The twelve states that have no-fault laws for auto insurance also require personal injury protection (PIP) coverage. You probably have this type of policy, which works very much like medical payments coverage, if you live in Utah, Pennsylvania, North Dakota, New York, New Jersey, Minnesota, Michigan, Massachusetts, Kentucky, Kansas, Hawaii, and Florida.

PIP also typically covers items that do not fall under MedPay insurance. For example, you can make a claim with your PIP policy for lost wages if you cannot work because of your auto accident injuries. However, unlike MedPay, you must meet your deductible before you are able make a PIP claim.

If you do not have medical payments or PIP coverage, you can potentially file a claim for health care expenses related to an accident under your uninsured/underinsured motorist bodily injury coverage policy. NerdWallet reports that 20 states require this type of auto insurance policy, which pays medical bills for you and others in your vehicle if you have an accident caused by an uninsured or underinsured driver.

Drivers who live in Michigan have a unique situation. This is the only state that has no-fault car insurance laws that do not limit medical expenses, protecting you from out-of-pocket expenses. According to Value Penguin, if your costs for health care exceed your policy rates after an auto accident, the insurance company receives reimbursement for the excess amount from the Michigan Catastrophic Claims Association.

What Should I Do After a Car Accident?

WalletHub outlines the steps to take to file a MedPay claim after an auto accident injury. First, get medical help right away and keep records of the costs associated with your hospital or doctor visit. If possible, give your health care provider the details of both your health care insurance coverage and your MedPay coverage.

After you receive care, file a claim with your auto insurance company as soon as you are able to do so. Sometimes, your health care provider may directly bill the insurance company, but in most cases, you will have to get reimbursed after paying for your care out of pocket. Unless you need emergency treatment, consider asking about the billing policies before your appointment. If you have a complicated situation with serious injuries, you can give your attorney permission to work with the insurance companies and doctor offices on your behalf.

Understanding auto insurance medical coverage allows you to make an informed decision about whether you should purchase this type of policy. The answer depends on a variety of factors including your personal risk tolerance and existing medical coverage.

Check this out if you need additional information, resources, or guidance on car insurance.


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