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Auto insurance medical coverage

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There are roughly six million car accidents in the U.S. each year, resulting in more than 38,000 deaths and 4.4 million injuries in 2019. With statistics like that, it pays to make sure your car insurance adequately covers you for medical costs in the event that you’re involved in an accident.

It might seem odd to think about your auto insurance covering medical costs — isn’t that what your health insurance does? But there are ways in which medical payments car insurance can supplement your health insurance, saving you considerable money and ensuring that you’re not stuck with out-of-pocket medical payments. In this article, we’ll talk about how auto insurance medical coverage, or MedPay, can help cover the costs from injuries.

What is medical coverage? 

There are three types of auto insurance coverage you can purchase that will cover injuries you or your passengers sustain in an accident. 

  • Medical payments, or MedPay: Usually optional (except in the states of Maine and New Hampshire, where it is mandatory for anyone with auto insurance), MedPay coverage can be purchased for certain amounts — usually ranging from $1,000 up to $25,000 — and covers injuries to you and your passengers regardless of who’s at fault in an accident. It is attached to the driver rather than the car, so you would also be covered even if you were riding a bike or walking and were hit by a car. Because MedPay is usually for a fairly low amount, it’s frequently used to cover co-pays and deductibles. It can also cover things like dental costs, x-rays and, if necessary, funeral costs.
  • Personal injury protection, or PIP: This type of insurance is required in some states, mainly those that are considered “no-fault” (including Arkansas, Delaware, Florida, Hawaii, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Oregon, Pennsylvania, Texas and Utah) and is optional in others. It’s similar to MedPay in some ways: it covers you, rather than your car, so biking or pedestrian accidents are covered. It covers you regardless of who’s at fault too. But the limits are often higher than MedPay limits, and PIP can cover additional costs such as reimbursement of your salary if an accident keeps you off the job.  
  • Uninsured/underinsured motorist bodily injury, or UM/UIM: This coverage is mandatory in quite a few states and can be a good idea even if it’s not. Basically, it covers your injuries if you are hit by someone who has no insurance or not enough insurance to cover your costs. There’s only one state in the U.S. (New Hampshire) where car insurance isn’t mandatory, but despite that, 13 percent, or nearly one in eight drivers, takes the risk of driving without insurance illegally, so there is a chance that if you’re in an accident, it may be with an uninsured or underinsured motorist.

You can have one or all of these kinds of medical coverages as part of your auto insurance policy. Look at your state’s laws to see which are required and which are optional. 

How does medical coverage work?

Let’s say you have $10,000 in MedPay coverage as an amendment to your auto insurance. You’re in an accident, and it results in a ride to the emergency room and a broken leg. Much of the medical cost will have been dealt with as soon as you gave your insurance card to the hospital staff person who was checking you in. Your basic health insurance policy will have paid for the general costs of the doctors and the work of setting the bone and wrapping your leg in a cast. 

But there are a few costs that may not be covered by your health insurance. First: your deductible. You will owe the $1,000 deductible if that is what you chose when you signed up for your health insurance. After you are home, you can submit that to be paid out of your MedPay coverage. 

Second, many health insurance policies don’t pay any or only a part of ambulance costs. So, the $2,000 that the ambulance company bills you can also be submitted to MedPay. MedPay may also be useful if there are any gaps in your coverage, which you may not even realize until you’re in an accident.

MedPay can be used for surgery or x-ray costs, anesthesia, professional nursing care, prostheses and EMT services. Finally, if your accident is a serious one and there are fatalities, MedPay can be used to pay expenses related to funerals. 

Should I get medical coverage in my auto insurance? 

Knowing if you need MedPay can be tricky, unless you’re in a state where it’s mandatory. Having medical payments car insurance can save you thousands of dollars if you are in an accident. But depending on your health coverage, it may also be overkill if it just gives you more of the same coverage you already have in your health policy. 

The first step is to understand what your health insurance covers. In light of what you know about MedPay coverage, talk to an agent at your health insurance company to see what they would cover in the event of an accident — such as ambulance costs, for example. 

The key is making sure that your two types of insurance — car and health — complement rather than duplicate each other. 

You’ll also want to consider your deductible. The higher your deductible, the more likely that medical payments coverage will be useful to you because MedPay is commonly used to pay for deductibles.

Each state has rules about what MedPay can and can’t cover. A knowledgeable agent or customer service rep can be your best asset to find out what’s in your state’s laws.

Another good source of information about medical payments coverage is the official state insurance department website in your state. Although every state is different, there may be information there about the limits of MedPay coverage. Googling “insurance department” with your state’s name can help you find what you’re looking for.

For example, in New York State, residents are required to carry $50,000 of PIP coverage, as the state is considered a no-fault state. MedPay, therefore, is less useful since it would pay only after the no-fault benefits have been exhausted. However, no-fault benefits are not available for motorcyclists, so those who ride motorcycles in New York should consider MedPay.

The takeaway

Although medical payments coverage will not fill all your auto insurance needs, it can augment your health and auto insurance and be used to save you money in the case of an accident. Although medpay is usually for a minimal amount, it can fill in the gaps that you may have in your health coverage. Medpay is an especially good source of financing for paying deductibles and covering random medical costs such as x-rays, EMT and nursing charges and ambulance costs. 

The need for MedPay insurance varies depending on what state you reside in. It’s most useful in states that are not no-fault states because you are required to carry PIP in those states, which can cover many of the same aspects of your health care as auto insurance medical coverage.

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