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What is Medical Payment Coverage, Do you Need It, and How Much Does it Cost?

Medical Payments Coverage, also known as MedPay, is car insurance that pays your medical bills if you are involved in a car accident.  Your passengers and family members residing with you are also covered. This form of medical expense coverage is more basic than health insurance or Personal Injury Protection coverage. However, medical payments coverage can take care of your medical bills in the event that your health insurance or Personal Injury Protection insurance cannot.

Who is Covered under Medical Payment Coverage?

Medical payments coverage covers the insured driver and their passengers. MedPay also covers members of the insured’s household that are driving the insured vehicle when an accident occurs. Furthermore, the policyholder is covered by MedPay when they are not driving the car or even riding in a car. As long as the injuries are auto accident related, the policyholder is covered by medical payments coverage.  For example, if a car hits the insured policyholder while they are riding a bicycle along the street, the coverage still applies to the medical injuries.

What Does MedPay Cover?

MedPay covers injuries that you sustain as a result of a car accident. Expenses such as ambulance rides, hospital stays, medical treatment, doctor’s fees and more are covered by your MedPay coverage. If you need dental work due to a car accident, MedPay covers this as well. Funeral expenses are also covered.

MedPay does not cover the driver of the other car’s medical expenses. Your liability insurance covers this. MedPay also does not cover lost wages and/or pain and suffering as a result of a car accident.  Furthermore, MedPay also does not pay for medical expenses unrelated to an accident.

Do I Need MedPay if I Have Health Insurance?

You can benefit from having MedPay even if you have health insurance.  Health insurance often has a significant deductible and other fees. MedPay can be used to cover the deductible and fees. Furthermore, since health insurance costs significantly more than car insurance, you may have chosen lower coverage limits to save on your premium.  You can use MedPay to supplement your health insurance. Furthermore, your health insurance company may deny your claim. MedPay offers you another option for getting your medical bills paid.

How Much MedPay Coverage Do I Need?

The average MedPay policy offers $25,000 or less of coverage. There are different levels of MedPay coverage from $1,000, $2,000, $5,000, $10,000 or up to $25,000.To determine how much MedPay you need, there are several things that you need to consider:

  • Your health insurance coverage limits – Consider your health insurance coverage limits when deciding whether to purchase MedPay. Since MedPay can be used as a form of supplemental payment for your auto accident related medical expenses, the more health insurance coverage, you have the less MedPay coverage you need.
  • Your health insurance deductible – MedPay can cover your deductible and save you out-of-pocket expenses. If you have a high deductible, you may want more MedPay coverage.
  • Do you frequently travel with passengers in the car? –   MedPay pays medical expenses for you, the driver, and your passengers in an auto accident. Health insurance, on the other hand, only covers the policyholder and those specifically listed on the policy.

It is important to note that two states, Maine and New Hampshire, specify the amount of MedPay you need to legally drive in those states.  Maine requires $2000 worth of MedPay coverage and New Hampshire requires $1000.

How much does MedPay Cost?

MedPay cost varies depending on which state you live in and level of coverage. It is generally relatively affordable in comparison to Personal Injury Protection or Health Insurance given the low coverage totals. For example, $1,000 MedPay insurance coverage in California for a 30-year old female driver with good credit, on average, costs $1.90/month. At the highest limit at $25,000 coverage, MedPay insurance costs $11.63/month for the same individual. In comparison, your health insurance could costs hundreds of dollars a month.

How is MedPay Different from Personal Injury Protection (PIP) Coverage?

Like health insurance coverage and MedPay, Personal Injury Protection (PIP) Coverage covers your medical expenses if you are involved in an accident.  Sixteen states and Washington D.C. require that you have PIP Coverage as part of your car insurance. The states include: Arkansas, Delaware, Florida, Hawaii, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Oregon, Pennsylvania, and Utah. These are the no-fault states. Some states make PIP Coverage optional and this coverage is not available everywhere.

Like MedPay, PIP Coverage covers medical expenses for the insured, their passengers, and members of the household driving the car.  Unlike MedPay, however, PIP Coverage covers lost wages if you miss work as a result of an auto accident. It also covers some custodial care such as child care.  Thus, PIP Coverage is more extensive. Because PIP and MedPay’s coverages overlap, you should not need MedPay if you have PIP Coverage.

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