January 8, 2020

Medical Payments Coverage

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MedPay provides extra coverage for you and your passengers in the event of an auto accident. How does it work? And which states require it? We cover these answers and more in our guide.

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Even if you have health insurance, medical payments coverage may be worth considering. This addition to your auto insurance policy covers expenses that your health insurance might not.

Read on to see if medical payment coverage is right for you.

What Is Medical Payments Coverage and Do I Need It?

Medical payments coverage, also known as medical expense or MedPay, is a part of your auto insurance policy. It can be used to pay medical or funeral expenses for you or your passengers, regardless of who is at fault for an accident.

MedPay can supplement any gaps in your health insurance coverage. Some states require it, while others don't offer it at all.

Medical payments coverage can also be used if you or a family member is injured in someone else's vehicle or hit by a car while on foot or bike.

What Does MedPay Cover?

If you're injured in an auto accident, MedPay can help cover medical, dental, surgical, or chiropractic expenses. These include:

  • Doctor or hospital visits
  • Health insurance deductibles, copays
  • Surgery, X-rays, or prostheses
  • Ambulance and emergency medical technician fees
  • Professional nursing services
  • Dental care (as a result of the accident)
  • Funeral expenses

Medical payments coverage follows you (the policyholder), not your vehicle. It can even be used to cover injuries that occur out-of-state, regardless if the accident happens in a state that doesn't offer MedPay coverage.

Here's what MedPay does NOT cover:
  • Injuries to other drivers and their passengers from an accident you caused
  • Wage reimbursement if you lose work due to your injuries in an accident
  • Childcare costs you may require while recuperating from injuries from an accident
  • Injuries that cost more than your policy's coverage amount
  • Damage done to vehicles, including your own, or someone's property
  • Injuries or health issues not related to a car accident

How Does MedPay Coverage Work?

MedPay coverage can work in two ways: direct reimbursement as primary coverage or as a supplement to your existing health insurance coverage.

How it works will depend on your auto and home insurance policies and whether you live in a no-fault state.

There are 12 no-fault states:
  • Florida, Michigan, New Jersey, New York, and Pennsylvania have verbal thresholds.

  • Hawaii, Kansas, Kentucky, Massachusetts, Minnesota, North Dakota, and Utah use a monetary threshold.

  • New Jersey, Pennsylvania, and Kentucky have "choice" no-fault laws. This means you can reject the lawsuit threshold and retain the right to sue for an auto-related injury.

To understand how MedPay coordinates with your existing health insurance, imagine you require X-rays, stitches, and other medical treatment following an accident. After your health insurance coverage is applied, your out-of-pocket expenses total $1,750.

  • If you have $2,000 in MedPay coverage, the insurance would cover the remaining cost.

  • If you have only $1,000 of MedPay coverage in the same scenario, MedPay would cover the first $1,000 and you'd be required to pay $750 out-of-pocket.

Without regular health insurance, your medical payments coverage would cover costs up to its limit. But your out-of-pocket expenses would likely be much higher.

How Much Does MedPay Coverage Cost?

While you can't get a MedPay quote online, expect the coverage to add $5–$40 to your monthly premium. The exact amount will depend on the coverage limit you select and the state in which you live.

You can add medical payments coverage to your auto insurance at any time. In most cases, this means either opting in online through your account or over the phone with your insurance company.

Where Is MedPay available?
MedPay is required in a few states, not available in some, and optional in the rest.
  • It is required if you have auto insurance in New Hampshire, Maine, or Pennsylvania.
  • It is typically not offered in Oregon, North Dakota, Minnesota, and New York.
  • It is optional in all other states.

Medical Payments vs Liability Coverage

While MedPay only covers the medical expenses of you or your passengers, liability coverage pays for bodily injury and/or property damage from an accident that you cause.

That works in reverse, too. If the other driver is at fault for an accident that injures you, their liability coverage may help cover your medical bills.

MedPay is only required in three states: New Hampshire, Maine, and Pennsylvania. Bodily injury liability coverage, however, is required by law in most states.

Medical Payments vs PIP vs Health Insurance

MedPay and personal injury protection (PIP) both help pay for you or your passengers' medical expenses after an auto accident.

PIP, on the other hand, differs from MedPay in a number of ways. Generally, PIP has more extensive benefits.

What MedPay CoversWhat PIP Covers
Your medical expenses in the event of an auto accident, including medical, dental, surgical, and chiropractic care.Your medical expenses in the event of an auto accident, including operations, hospitalization, and ongoing professional care or rehab.
Your passengers' medical expenses in the event of an auto accident, including medical, dental, surgical, and chiropractic care.Your passengers' medical expenses in the event of an auto accident, including operations, hospitalization, and ongoing professional care or rehab.
Funeral costsFuneral costs

NOTE: PIP is required in 13 "no-fault" states.

How Much Medical Payments Coverage Do I Need?

MedPay has coverage limits or maximum amounts your insurer will pay for a covered loss. You can choose your coverage limit. But remember: any expenses exceeding the limit will be paid out-of-pocket.

When selecting your MedPay coverage limit, consider your health insurance deductible. While your health insurance may help pay for some medical expenses, you'll likely have a deductible amount to meet first.

Then consider how much you'd be able to pay out-of-pocket at any given time. If you only want MedPay to cover your health insurance's deductibles, you may not need a high coverage limit.

On the other hand, if you have low limits on your health insurance or no health insurance at all, you may want to consider higher limits.

In most states, maximum coverage amounts are $10,000 or less. The most common coverage limits are $1,000, $2,000, $5,000, and $10,000. Some companies offer coverage as low as $500.

If you need help deciding on a coverage limit, talk to an insurance agent. They will ask questions about your needs and existing health insurance coverage to help you determine how much supplemental coverage you should carry.

Bottom Line

Medical payments coverage can pay expenses not covered by your health insurance or out-of-pocket costs after your health insurance is applied. It's typically inexpensive.

You may want to consider MedPay if you don't have great health insurance or you have a high insurance deductible. Talk to your insurance company to learn if MedPay is right coverage for you, and what coverage limits you may need.

Write to Caitlyn Callahan at feedback@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.

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