With the exception of New Hampshire and Maine, every state has laws requiring drivers to purchase a minimum amount of automobile insurance to cover the harm caused to others due to their negligence.
A few states require drivers also to purchase insurance coverage for the expenses that they and their passengers incur in motor vehicle accidents, regardless of who is at fault. This required coverage is generally called personal injury protection (PIP) in those states.
In other states, like Wisconsin, obtaining coverage to help with medical payments is an option, called medical payment coverage, that may increase the cost of the policy. Because of this, many drivers opt not to maintain medical payment coverage. However, in many cases, this coverage is crucial to the ability to cover the full costs of medical expenses after an accident.
What Is Medical Payment Coverage?
When an accident occurs, those injured due to another driver’s carelessness or recklessness can seek compensation for the expenses of their injury through the personal injury claims process. Unfortunately, this process typically will not result in compensation for many months or even longer.
To obtain needed medical treatment as soon as possible, the injured party will often turn to other insurance resources they have available, such as:
- A personal or group health insurance policy that the injured party has.
- A full coverage auto insurance policy.
- A policy that has MedPay coverage.
As explained by Experian, medical payment coverage—commonly referred to in the insurance arena as MedPay—is an add-on to cover the gaps in other coverage that can help you obtain needed compensation after an accident.
MedPay coverage can pay for:
- Your health insurance plan’s deductibles and copays.
- The costs of doctor visits and hospitalization.
- Ambulance and emergency room fees.
- Nursing services.
- Surgeries and X-rays.
- Dental procedures.
- The provision of mobility assistance, such as prosthetic limbs.
- Funeral costs.
These types of expenses are no small amount. According to eHealth, the average individual deductible is more than $2,800, which is what you will have to pay out-of-pocket before your health insurance kicks in. Mira reports that a doctor’s visit without health insurance can range between $300 and 600, depending on the doctor you see, where you see them, and whether additional tests are needed, such as X-rays or labs.
The average cost of ambulance services is around $1,200, and hospitalization can cost over $10,000 a night. According to The Zebra, the median cost of a funeral with burial in Minnesota is $8,500, while the median cost of a funeral with cremation is around $7,560. In Wisconsin, funeral costs with burial or cremation are around $7,868 and $6,953, respectively.
Will MedPay Cover All of These Costs in Full?
MedPay is subject to policy limits and is usually sold in small amounts, offering between $1,000 to $4,000 in coverage. Remember, this type of coverage is meant to fill in the gaps between other coverages rather than as a single way to care for all the monetary expenses associated with being seriously injured. While having a higher policy limit will result in more coverage being available for those expenses, it will also result in you paying a higher cost for the policy.
Who Is Eligible for MedPay Coverage?
A driver who opts into this coverage can obtain benefits through their policy. The policy also covers members of the insured driver’s household named on the policy. Coverage is available regardless of who was at fault for the accident and can also be used to cover expenses pertaining to injuries incurred as the result of a pedestrian or bicycle accident that involved a motor vehicle.
Expenses that MedPay Won’t Cover
While MedPay is helpful in the immediate aftermath of the accident, it is not an appropriate resource for every type of accident-related expense.
- Your MedPay coverage will not compensate other parties for injuries they sustained in an accident you caused, unless they are a passenger in your vehicle. Instead, these expenses are claimed against your auto insurance policy’s bodily injury liability portion.
- Unlike personal injury protection (PIP), MedPay policies also don’t reimburse wages you lost due to missing work due to your injury.
- MedPay will also not reimburse you for expenses relating to the damage to any vehicle involved in the accident. These damages are covered either by the at-fault party’s property damage liability coverage or by the insured’s collision coverage.
It is important to remember that MedPay policy limits are generally lower than other types of insurance coverage. MedPay is not intended as a replacement for health insurance coverage, as payments from the policy can only be accessed when a motor vehicle accident occurs.
How Medical Payment Coverage Works
MedPay coverage tends to kick in quickly after an accident has been reported for the insured to use the coverage immediately. One of the main types of expenses MedPay is used for is to relieve the policyholder of having to pay out of pocket for their health insurance deductible to cover emergency medical costs.
According to WalletHub, to file a claim on your MedPay coverage:
- If your injury resulted from another driver’s negligence, speak with a personal injury lawyer as soon as possible about your case, as they can usually assist you in contacting your insurance provider, health care providers, and the at-fault party’s insurance provider.
- Contact your insurer as soon as possible after the accident (unless your attorney is doing that for you). Remember, you are required to report all accidents to your insurer, even if you were not at fault, as part of the obligations you agreed to when you entered into the contract for coverage.
- When seeking medical care, give your provider information about your MedPay policy and all other forms of insurance you have.
- If you’re in non-emergency care, ask your provider if they will bill you or the insurance company for your care.
- If the healthcare provider is billing you directly, document all medical expenses and send them to your insurance company for reimbursement.
Is Medical Payment Coverage the Same as PIP?
While the intentions of PIP and MedPay coverage are essentially the same, there are some distinct differences between the two. PIP is generally only available in the states that require that coverage or if your policy is purchased in a state that requires that coverage.
In other states, you may purchase MedPay coverage as an option. Additionally, PIP tends to cover more expenses, including wage loss, homemaker expenses, and childcare expenses resulting from the injury. MedPay coverage is limited to fewer types of expenses usually related to medical care.
Do You Need Medical Payment Coverage?
It is often difficult for drivers obtaining auto insurance coverage to know whether they need specific add-ons such as MedPay. One way to consider whether choosing this optional coverage is right for you is to think about how much your health insurance deductible is.
Let’s say your health insurance deductible is about average, at $2,800 a year. If you are injured in an accident, you will likely incur $2,800 worth of medical expenses rather quickly, regardless of how serious the injuries are, simply through the initial treatment, such as ambulance transport, emergency room services, X-rays, and prescription medications. Even if your medical treatment never ventures further than the hospital emergency room, your deductible will likely be burned through when you return home.
But can you afford, without warning, to pay the $2,800 deductible? If not, then consider paying for MedPay coverage. On the other hand, if you live in a state requiring PIP, you will likely not be offered MedPay coverage because the two types of coverage are so similar.
Is Medical Payment Coverage Expensive?
As explained by Bankrate, the cost of MedPay coverage depends on the amount of coverage you purchase, but the impact on the cost of your policy will generally be minimal. For example, boosting from a standard MedPay coverage limit of $2,000 to a $10,000 coverage limit usually will not cost more than $10 per year.
A Look at the Other Types of Insurance Policies That Can Cover Injuries
As noted, there are several options for obtaining compensation for or coverage of medical expenses after a car accident. Medical payment coverage is one of the fastest ways to get the money you need for initial injury expenses. Here is a look at other insurance that can pay for injury treatments.
The At-Fault Driver’s Auto Liability Policy
Drivers are almost always required to have a minimum level of auto liability insurance.
This insurance policy covers:
- Bodily injury liability, which covers the expenses and psychological impacts incurred by individuals who were injured or the family members of those who died as a result of car accidents caused by the insured driver, up to the limits of the policy. The states set the minimum policy limits. For example, in Wisconsin, drivers must have at least $25,000 in bodily injury liability coverage per person or $50,000 per accident. In Minnesota, drivers must maintain a minimum coverage amount of $30,000 per person or $60,000 per accident involving injuries or death to more than one person.
- Property damage liability, which covers the cost of repairing or replacing someone’s vehicle or other personal property that was damaged as a result of the insured’s negligence. Again, the minimum amount of property damage liability coverage that is required depends on the laws in the state where the driver has registered their vehicle. Minnesota and Wisconsin both require drivers to have policies that provide at least $10,000 of coverage to pay for property damage incurred to others.
Your Own Full Coverage Policy
Full coverage policies generally offer a complete array of different coverages, including:
- MedPay or PIP, depending on your state, to cover initial medical expenses.
- Bodily injury liability, to cover injuries you caused to others.
- Property damage liability, to cover property damage you caused to others.
- Uninsured/underinsured motorist coverage, which covers injuries and property damage you sustain by a negligent driver who is uninsured, whose insurance policy does not have a big enough limit to compensate the costs of your injury or a hit-and-run driver.
- Comprehensive coverage, which covers damage to your vehicle occurring as a result of animals in the road, branches falling on your car, vandalism, and other incidents not related to a collision.
- Collision coverage, which covers the expenses of repairing your car after an accident, regardless of fault.
Your Health Insurance Coverage
An injured person’s own health insurance is one of the main ways that they are able to obtain treatment for the injuries they sustain in car accidents, though—as previously noted—this insurance often features a high deductible that must be paid before the policy coverage will kick in.
Additionally, if you were not at fault for the accident, your health insurance provider will generally seek compensation for the coverage they have provided to you directly through the at-fault party’s liability insurer.
Another common way health insurance companies and health care providers recoup the costs of providing treatment is to place a medical lien on the settlement or court award. This is a type of legal claim to a portion of the proceeds of compensation from a dispute.
If you’ve been injured in an accident, contact an experienced car accident attorney for a free case evaluation. They can answer your questions and help you uncover all the insurance policies available to you for your claim.