Medical payments (medpay) is a coverage that’s available with your car insurance policy. If you’re injured in an accident, regardless of whether you or the other driver is at fault, medpay ensures you receive reimbursement for some or all of your medical expenses. It also ensures your passengers receive reimbursement for medical costs they incur. Medpay is optional in every U.S. state where it’s offered except Maine and New Hampshire.
Medpay (and a similar coverage called Personal Injury Protection) help ensure people get reimbursed quickly for covered medical bills after a car accident. Because the coverages apply regardless of fault, the involved insurance companies often avoid long investigations and/or lawsuits. This helps them make their payouts more promptly.
What medpay covers
If you’re injured in a car accident, your medpay coverage ensures you’re reimbursed for a variety of expenses related to your medical care. These may include the following:
- Ambulance and emergency medical technician fees
- Doctor’s office and/or hospital visits
- Dental procedures resulting from your accident
- Professional nursing services
- Health insurance deductibles, coinsurance, and co-pays (we’ll look at how medpay and your health insurance align with each other later in this article)
- Funeral costs
Medpay is said to “follow the policyholder.” This means the coverage applies whether you’re driving your own car, riding in a friend’s car, using public transportation, or hiring a rideshare service. Your medpay even provides coverage if you’re walking down the street or riding a bicycle and are struck by a vehicle.
Your medpay coverage has a limit. This is the maximum amount the insurance company will pay to each covered individual when a claim is filed. So if you have medpay with a $5,000 limit, your insurer will pay up to $5,000 each for you and your passengers if you have a claim. Any expenses that exceed your coverage limit will be your (and your passengers’) responsibility. You choose the limit when you purchase the coverage; note that higher limits provide more coverage, but cost more in premium.
Medpay typically does not have a deductible.
What medpay does not cover
Medpay typically doesn’t provide coverage for things that have a less direct relationship to the accident and your injury. These include lost wages, pain and suffering, legal fees, and childcare. It doesn’t cover any kind of damage to your vehicle.
It also doesn’t cover injuries to any other drivers involved in your accident, or any damage you cause to their vehicle. However, if the accident is your fault, your liability coverage pays for costs related to the other drivers’ injuries and vehicle damage. We’ll compare medpay and bodily injury liability coverage later in this article.
Medpay vs. Personal Injury Protection (PIP)
If you live in a state where Personal Injury Coverage (PIP) is available, you might notice a lot of similarities between it and medpay.
The coverages are similar in a couple of important ways. Both are designed to provide prompt reimbursement for medical care costs for you and your passengers after an accident. And both coverages apply no matter who is at fault.
However, there are some key differences.
PIP is required in states with “no-fault” insurance laws. In a no-fault state, all drivers must have PIP, and the victim in a car accident must file a claim with their own insurance company to be compensated for injuries and property damage. According to the Insurance Information Institute, 12 states and Puerto Rico currently have no-fault laws.
Additionally, PIP covers a broader list of expenses than medpay. You can file a PIP claim to cover things such as lost wages, or for childcare if you’re unable to perform “essential services” stemming from your car accident injuries.
Medpay vs. bodily injury liability coverage
You might also notice some similarities between medpay and bodily injury (BI) liability coverage. Both coverages provide reimbursement for similar expenses — costs related to medical care for injuries sustained in a car accident. The key difference lies in whom each coverage applies to. Medpay applies to the policyholder and their passengers, regardless of who is at fault in the accident. BI liability applies to the other driver (third party) in an accident for which you are at fault.
In fact, both coverages can apply in a single accident. Here’s an example:
Say you run a red light and collide with another car driving through the intersection. You’re clearly at fault. The collision causes a few injuries; you, your passenger, and the other driver all need to go to the hospital emergency room for treatment. Each of you runs up bills in the thousands of dollars for doctor fees, x-rays, and other diagnostic tests.
Because you’re at fault, your BI liability coverage pays for the other driver’s medical bills (this assumes your state does not have a no-fault law). Your and your passenger’s medical bills would be covered by your policy’s medpay.
What medpay insurance costs
Choosing medpay generally adds only a modest cost to your premium. Of course, as with any coverage, the cost will vary based on factors such as your location, your driving record, and your chosen limit.
According to one survey, medpay costs less than $2 per month for a $1000 limit, and up to $36 per month for a $25,000 limit.
Deciding whether you need medpay coverage
If you’re in a state where medpay is required, you need to add the coverage to your policy to drive legally. In states where it’s optional, you need to decide whether or not you want to purchase it. That decision may depend largely on your health insurance and whether you’re required to have PIP coverage.
Depending on your health insurance plan and state, medical bills related to car accidents may not be covered. In this case, you might consider having medpay (or PIP) to help cover these expenses. In other states, medpay (or PIP) is considered “primary” coverage, meaning you have to reach your medpay coverage limit before your health insurance kicks in. If you’re in a state where medpay is considered secondary coverage (your health insurance is primary), then you can use your medpay coverage to help pay for your health insurance deductible, copay, or coinsurance. If you’re in one of the no-fault states where PIP is required by law, then it probably doesn’t make sense to have medpay.
Deciding how much medpay to get
You also need to decide on a medpay limit. If you’re planning to use medpay to help pay for your health insurance deductible should you have an accident, then you should set your limit at a level to cover that amount. If, however, you think you’ll need to rely on medpay for more expenses after an accident, you should consider choosing a higher limit.
The bottom line is that you may have a lot of things to consider when deciding whether to purchase medpay coverage. When making decisions about your insurance, it’s a good idea to consult with an insurance agent. An agent will understand what’s required by law, can review your existing coverages, and make a recommendation that will work for you.
Medpay is designed to provide a prompt insurance payout for medical bills related to a car accident. Depending on your state’s car insurance requirements, your health insurance plan, and your tolerance for financial risk, it may be a coverage worth considering. Your insurance agent can help you decide.