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How do medical payments on auto insurance work?

Fact-checked with HomeInsurance.com

If you’ve ever been injured in a car accident, you may be familiar with medical payments insurance, more commonly known as MedPay. MedPay, in most states, is an optional coverage that will pay for your own medical expenses if you’re hurt, no matter who is at fault in the accident. 

MedPay is similar to another insurance component called personal injury protection, or PIP, but it’s distinctly different from bodily injury liability, which is the mandatory part of your policy that pays for injuries that the other car’s occupants sustain in an injury. Both MedPay and PIP cover injuries sustained in a car accident, but differ in who receives the benefits. 

What is medical payment coverage?

How does medical payment coverage work? MedPay is one of several types of insurance that pay for your own injuries, or those of your passengers or covered family members. This coverage stays with you, rather than with your car, and applies to injuries sustained if you’re walking, riding a bike, taking public transportation or you’re the passenger in another person’s car. MedPay coverage is usually fairly low: often $500 up to $10K, and it doesn’t have a deductible. 

What does medical coverage on an auto insurance policy cover?

As the name suggests, MedPay covers your medical bills following an accident. These costs can range from ambulance fees to dental work. Unlike PIP, which is otherwise similar, MedPay won’t cover other accident-related costs such as child care or lost wages that result from the accident.

Includes Excludes
Doctor’s billsLost wages
x-raysIncreased child care costs
prosthesesCosts incurred from injuries to the other driver or occupants
Funeral costs
Ambulance and EMT bills
Skilled nursing care
Health insurance deductibles
Dental costs

Who needs MedPay?

Maine and Pennsylvania require drivers to have MedPay as part of their coverage. New Hampshire — the one state where car insurance is not mandatory — requires MedPay if you do have auto insurance. But MedPay is recommended whether it’s required or not, as it can provide valuable coverage for any driving-related injuries.

MedPay is not a replacement for good health insurance coverage, but can be a great way to supplement it. Where your health insurance may not be as robust, MedPay can add an extra layer of coverage.

It may also allow you to receive money more quickly to pay medical bills if the accident is caused by the other driver — your company will pay you, then go after the other driver’s insurer through the process of subrogation.

What is the difference between bodily injury and medical payments?

Bodily injury liability coverage is mandatory in most states, and with property liability, forms the basis of a solid auto insurance policy. In essence, it pays for any medical costs incurred by anyone who’s in the other car if you’re at fault in an accident. It’s there to protect others — not you.

MedPay exists to cover your own injuries, or the injuries of anyone who is in your car during an accident. MedPay is even useful even if you are hit by a car while you’re walking down the street or riding a bike. Although bodily injury coverage usually has a fairly high limit — such as $100,000, MedPay is generally lower — with $10,000 being a common limit for it.

How much does med pay cost?

Since medical payment insurance is usually limited in payout amount, the cost to have it is relatively inexpensive. Although every insurer has their own methods for determining your premiums, you can find medical payment coverage for as little as $30 a year for $5,000 worth of coverage from some providers.

If you already have a car insurance policy, your first step should be to talk to your agent or review on your company’s website to obtain a quote for what MedPay would cost you. If you’re shopping for insurance, make sure your agent knows that you want to include MedPay in your policy. 

Is this coverage available to every insured?

You’ll want to read your own policy over carefully, since your policy is unique to you and your situation and may include specifics about eligibility. For example, if you live in a “no-fault” state, such as Florida or New York, you may not be able to purchase MedPay insurance. In those 12 states, the similar PIP coverage is mandatory, but MedPay is not available.

Another limitation that you may run across, depending on the state you live in and your insurer’s restrictions, is whether you can have MedPay if you don’t also have comprehensive and collision insurance. These are details that should be discussed with your insurer. 

Why should I consider medical payments?

First, check with your private health insurer to see what their policy is on auto accident payments, and then you can make an informed decision about medical payments. Some health insurance policies won’t cover auto accident injuries, or don’t cover them to the same extent as other injuries.

If they’ll cover car accident expenses, consider the health insurance deductible you’re required to pay at the emergency room or if you’re admitted to the hospital. Even if you have great healthcare, you would have to pay your $2K deductible for in-patient care, or $1K for emergency room services, 100% out of pocket. If you weren’t at fault, this can be inconvenient and you’ll need patience, since it may take time for the other party’s insurer to reimburse you.

Medical payments would be a good option if you frequently transport other passengers in your car. If there’s an accident and a passenger is injured, your employer-sponsored health care won’t cover them.

Choosing your MedPay limits

You may ask yourself, how much medical payments coverage do I need? The answer is that it is different for each person. Some people only carry enough MedPay to cover their health insurance deductible, or enough to cover their comprehensive or collision deductible. If your health insurer won’t pay for medical bills from the accident, however, obtaining enough coverage to meet your deductible is superfluous. Instead, you should opt for the highest MedPay limits available to be sure you’re covered as comprehensively as possible.

Read all the details of your coverage. There are some companies that use a reimbursement clause or a provision for duplicate payments—meaning if you win a lawsuit covering medical expenses you claimed, you’ll need to pay them back. You may need to pay it back if your uninsured or under-insured motorists coverage paid out also.

The takeaway

Medical payments coverage can supplement health insurance in the event of injuries from an auto accident.

  • MedPay covers medical costs for you and your passengers in an accident, regardless of fault.
  • MedPay stays with you, not the car, so it can be used if you’re a pedestrian or riding a bike injured by another driver.
  • Limits are often low ($10K) and premium costs can be as low as $20-$30/year.
  • MedPay can be used for health insurance deductibles and other medical costs — but not lost wages or child care.
  • MedPay is similar to PIP, but not as comprehensive.

Medical payments coverage is an element of auto insurance that will help pay for your medical costs if you’re in a car accident, no matter who is at fault. It’s mandatory in Maine, New Hampshire and Pennsylvania; optional everywhere else. 

MedPay is most commonly valued up to $10,000 or less, and is a good way to pay deductibles or other medical costs that your standard policy won’t cover. If your health insurance does not cover car accidents, a MedPay can be a great way to compensate for the gap.

Mary Van Keuren

After 30 years as a writer and editor in academia, Mary now writes full-time for the insurance and finance industries. Her work has appeared on Reviews.com, TheSimpleDollar.com and Bankrate.com, as well as other consumer-focused websites.

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