June 6, 2014
MedPay Car Insurance, otherwise known as Medical Payments coverage, is a common target for people who are trying to reduce their insurance premiums to save money. However, MedPay is one of the better bargains in insurance today in terms of the value you get for the premiums that you pay. A typical cost is between $10-$20 annually for $10,000 in coverage.
MedPay covers medical expenses for you and the other occupants in your car — both family and unrelated passengers — in case of an accident. Medical bills are covered up to the policy limit; if that limit is exhausted, your health insurance kicks in beyond that. Other useful features:
- No Co-Pay – There is no co-insurance or co-payment with MedPay. Depending on the provider, either the insurance company will be billed directly, or you will be reimbursed for the full amount.
- Immediacy – Because fault is not an issue, you do not have to wait for the settlement of a claim. MedPay kicks in immediately after the accident.
This may be an even greater benefit than the lack of a co-pay, as there are horror stories of people racking up massive debts and credit problems while they are trapped in the limbo of waiting for an insurance claim to be settled.
- Covered Items/People – Compared to your health insurance policy, or the policy of the driver at fault, MedPay covers a wider range of medical bills and treatments related to the accident – including such things as ambulance transport costs, dental costs, and chiropractic treatments. Check the coverage and exclusions on your existing policy to determine how much of an extra benefit MedPay would provide.
Liability coverage is only for drivers in other vehicles, so any unrelated passengers that are injured in the accident and are not on your policy would have to rely on their own health insurance without the coverage provided by MedPay.
- Individual Limits – The policy limits on MedPay are per injured individual, as compared to liability insurance that has a total coverage limit. If you have a $5,000 limit and you and two other passengers are injured in an accident, each of you are covered to a $5,000 limit for $15,000 total. In some states, you may be able to extend the limits even further by multiplying this coverage by the number of vehicles on your policy.
Note that insurers will not pay the same medical bills with both your MedPay and liability policies – it is one or the other.
If you live in a no-fault state that requires you to carry PIP (Personal Injury Protection) coverage, there is not much reason to add MedPay. PIP coverage is basically an expansion of MedPay coverage with more options such as rehabilitation costs, loss of income, and funeral expenses – with corresponding co-pay. However, in some states MedPay can kick in after the PIP benefits are exhausted, and may possibly be used to cover the co-pay on the PIP.
Check the rules in your state to see how the programs interact with your health insurance and with each other. You may that find PIP preferable to MedPay based on your situation or that your state only offers one coverage or the other.
You are wise to look over your insurance policies for ways that you can save on your coverage, but in terms of value, MedPay is probably one of the best purchases you can make. Consider adding or increasing your MedPay coverage. Like all insurance, we hope that you never have to use it, but you if you do need it, you will be very glad that you have it.
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