Are you confused about the type of auto insurance you need to cover accident injuries? Most states require bodily injury liability insurance while some states require and others offer medical payments insurance. Review the difference between auto insurance medical payments vs. bodily injury coverage so you have the financial protection you need if a catastrophic collision occurs.
Purpose of Bodily Injury and Medical Payments Coverage
Bodily injury is a liability policy, which means it pays for the medical expenses of other drivers and passengers if you cause a crash. Depending on your state, this policy may also cover injuries to your passengers if you are the driver in an at-fault accident. However, some states exclude family members who live in your household, according to American Family Insurance.
Every state establishes minimum liability limits. For example, Scurich Insurance reports that California drivers must have at least $15,000 of bodily injury liability insurance per person and $30,000 per accident. You can also buy extra liability insurance. If you have an at-fault accident and the medical costs exceed your policy limits, you will be responsible for the remainder and can be sued by the injured parties.
Auto insurance medical coverage, also called medical payment insurance or med pay, covers the cost of injuries after an accident even if you have fault in the crash. This policy pays the medical expenses of anyone in your vehicle at the time of an accident. It also covers funeral expenses in the case of a fatal accident.
If you live in a no-fault state, your insurer may also require personal injury protection (PIP). While PIP coverage is similar to med pay, it can also be used to cover lost wages, long-term rehabilitation, mental health care needed after an accident, and all other relevant health care costs.
Aspects of Bodily Injury Coverage vs. Medical Payments Insurance
Components of bodily injury liability insurance include:
- Coverage for final expenses such as funeral and burial costs after a fatal accident
- Coverage for legal expenses if another driver or passenger sues you after an at-fault crash
- Coverage for lost wages if an injured person can no longer work after an at-fault accident
- Coverage for long-term pain and suffering resulting from accident injuries
- Coverage for comprehensive medical expensive coverage, including devices such as wheelchairs, doctor visits, hospital visits, surgeries, and emergency medical care
While your health insurance will cover costs for you and your family if you have an auto accident, it does not cover your other passengers. If you frequently drive a carpool or transport friends, it makes sense to have med pay. This type of insurance will cover:
- Doctor visits
- Hospital admission and costs
- X-rays and diagnostic tests
- Ambulance and EMT fees
- Surgery, medications, and treatments
- Professional nursing care, including long-term care if necessary
- Prosthetics and medical devices
- Dental care resulting from the accident
- Funeral costs
Understanding Medical Payment Claims
You can use medical payments coverage in the following situations:
- Your passengers experience injuries in a crash when you or a family member is driving.
- You get hit by a car while riding a bike or motorcycle or as a pedestrian.
- You experience injuries in an accident as a passenger in someone else’s vehicle.
- A covered person on your policy suffers an auto accident fatality.
You can either add medical payments coverage to your health insurance policy or pay the out-of-pocket amount and receive reimbursement from your Med Pay policy. Value Penguin notes that the exact process depends on whether you live in a fault-based state for auto accidents as well as the provisions of your health insurance and auto insurance policies. In some situations, your health insurance will serve as the primary coverage, while in other cases claims go to medical payments insurance first.
Talk to your agent if you have an auto accident claim involving injury. He or she will advise you on the proper process to ensure coverage for your medical bills, including health insurance deductibles and copayments since those fall under your medical payments policy.
The five largest auto insurance companies offer med pay coverage with limits of $1000, $2000, $5000, $10,000, and $25,000. GEICO offers even lower amounts as well as increments between $1000 and $5000. If you opt for State Farm, you can even get medical payments insurance with a limit of up to $100,000.
Benefits of Medical Payments Insurance
Even if you have health insurance, your health insurance policy might not cover the costs of a car accident. When it does pay for these costs, you will still be responsible for out-of-pocket copayment, coinsurance and deductibles. Medical payments insurance will pay for these expenses, which can be substantial.
Medical payments coverage can also kick in after you exhaust the limits of your PIP coverage. You can use med pay to file a claim for these excess costs if necessary. You can also select a higher limit for medical payments insurance, which will increase the cost of your auto insurance premium.
Downsides of Medical Payments Insurance
These policies usually have low coverage limits. They mainly cover medical and funeral expenses that occur right away after a catastrophic accident to prevent significant out-of-pocket costs. Med pay also does not cover injuries that occur on the job; you need to file through your employer’s workers’ compensation coverage even if you were driving for work at the time of the accident.
With so much overlap between health insurance, personal injury protection coverage, and medical payments coverage, it can be difficult to determine how each policy would meet your individual needs.
Check this out if you need additional information, resources, or guidance on car insurance.
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