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What Is Med-Pay Coverage?

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Jeff Sevey

When you’ve been injured in a car accident, your first concern is your health. You need to receive the medical treatment that will heal your injuries and in some cases save your life. However, once your condition has been stabilized and you are on the road to recovery, your focus shifts to other concerns. Specifically, you begin to wonder how you are going to pay the bills for all the medical treatment that you’ve received.

This is a valid concern. After all, your financial health is a close second in importance to your physical health. In many cases, insurance, in one form or another, will pay for the majority of the medical bills that you incur as a result of the accident. One of the most important types of insurance, as well as one of the most overlooked, is medical payment coverage.

What is Med-Pay?

Medical payment coverage, more commonly known as “med-pay”, is an optional addition to your existing car insurance coverage. The purpose of med-pay is to provide insurance coverage for all reasonable medical expenses that are incurred by a driver of a vehicle and/or their passenger(s) in the event of an accident.

Like all insurance, the amount of money that med-pay coverage provides will vary from policy to policy. In California, typical med-pay coverage limits are $1000, $2000, $5000, and $10,000. That being said, it is possible to purchase med-pay coverage that goes as high as $100,000 and beyond. It all depends on the insurer and the financial wherewithal of the person purchasing the policy in question.

Is Med-Pay Mandatory in Order to Drive?

In some states, such as New York and Florida, med-pay coverage is mandatory and goes by the name of PIP, or personal injury protection. However, in California, med-pay coverage is discretionary. This means that the State does not require drivers to maintain med-pay coverage as a matter of law. Med-pay simply offers another layer of protection to drivers who decide that they need additional coverage. More importantly, unlike casualty insurance, med-pay coverage does not depend upon liability, or lack thereof, in order to be effective. This means that if you caused an accident or if you were the victim of someone else’s negligence, med-pay is still there to cover the costs of treating your injuries and the injuries of the passengers in your vehicle.

What Does Med-Pay Cover?

As was stated above, med-pay will only cover reasonable medical expenses that were incurred as the result of a car accident, and then only up to the policy limit purchased per person. So, in some cases, the question becomes “What are reasonable medical expenses?”

The specifics of what med-pay covers will vary according to the terms of individual policies. In general, however, most med-pay coverage will include the following:

  • Emergency medical transport
  • Emergency room services
  • Radiology services (X-rays, MRIs, CAT scans, etc.)
  • Surgical procedures
  • Hospital bills
  • Doctor bills
  • Pharmacy bills
  • Chiropractic care and
  • Physical therapy.

Will the Use Med-Pay Coverage Increase My Car Insurance Premiums?

In general, the answer to this question is no. In California, auto insurers cannot raise your car insurance premiums as a result of your using your med-pay coverage if you were NOT at fault for the accident that caused you injuries. The policy behind this rule is simple.

Med-pay exists to extend coverage for medical expenses. In cases where the expenses were due to injuries caused by someone else, absent med-pay the injured party might have to wait weeks or even months to receive payment from the other party's insurer for their medical bills. With med-pay, a portion of that expense is paid relatively promptly. To then charge the injured party an increased premium for using the coverage in precisely the way it was designed to be used would be unfair.[G1] [G2] [G3] [G4]

If the medical bills that med-pay is covering were the result of injuries incurred due to the fault of the insured, then this dynamic does not exist. In such a case, an insurer may raise the insured’s car insurance premiums as a result.

Does My Med-Pay Coverage Protect Me If I Am Injured While Traveling in Another Car?

Yes, it does. Med-pay coverage is typically not tied to one specific vehicle. Instead, it can travel with you, protecting you even if you are a passenger in another person’s vehicle. It can even provide coverage if you are struck by a vehicle while walking or riding a bike.

I Already Have Health Insurance, Why Do I Need Med-Pay?

Typically, most private health insurance plans come with a deductible or co-pay requirement that must be met before coverage activates. In some cases, this deductible or co-pay requirement can be high, requiring the insured to pay a hefty sum out-of-pocket before receiving the benefit of the insurance. Med-pay coverage typically can be used to shift some of the cost of a deductible or co-pay from the insured. Med-pay may also pay for some services that a private health insurance plan does not.

In addition, if you are injured due to the negligence of another driver and that driver is uninsured, you do not have the option of making a claim against that driver's insurer. In such cases, med-pay coverage will offset the amount of money that your health insurance is required to pay. Again, if you have an expensive deductible or co-pay requirement, this can result in significant savings to you.[G5]

Finally, med-pay coverage is relatively inexpensive. Usually, a driver can add significant med-pay coverage to their existing policy for only a small additional amount a month. Compare this to the cost of adding similar coverage to a private health insurance policy and you’ll see that the investment in med-pay coverage is a smart decision.

Is My Insurer Entitled to Reimbursement if I Use My Med-Pay Coverage?

It depends on the circumstances surrounding your accident and the language of your specific policy. In general, if you are not at fault and you recover money from the other driver’s insurer, your insurer may require you to pay back all or a portion of the med-pay coverage that it provided on your behalf. On the other hand, if you are the cause of your own injuries, then your insurer is not entitled to be reimbursed for any med-pay amount that you received.

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