What Is Medical Pay Coverage, and Do I Need It?
With car insurance premiums going through the roof, one way some people have found to pay less is to drop medical payments coverage, commonly known as med-pay, from their policy, especially if they’ve already got health insurance.
In Colorado, insurance companies are required to include a minimum of $5,000 of medical payments coverage on all automobile insurance policies issued in the state, although consumers may reject med-pay in writing (or in the manner in which the policy application was taken).
But dropping med-pay is probably not a good idea.
The Benefits of Medical Payments Coverage
Med-pay is an optional addition to your car insurance policy that will pay accident-related medical bills up to the coverage limit for you and whoever else is riding in your vehicle in the event of a collision, no matter who is at fault.
Even if you were involved in a car accident caused by someone else and their insurance is obligated to pay your medical bills, it can take months for that to happen, and, in the meanwhile, unless you pay them yourself, your bills will remain unpaid and may eventually be transferred to collection. If you choose to submit the claims to your health insurance carrier, you will be responsible for any deductibles and co-pays.
Med-pay starts paying immediately, and covers some costs that your health insurance likely won’t, including ambulance fees, chiropractic and dental care, extended nursing services, prosthetics, and funeral expenses, in the event of a fatal accident.
Medical payments coverage may be especially beneficial for those who do not have health insurance or have a plan that doesn’t cover car accidents, although med-pay must be purchased as part of an auto liability insurance policy and to use it, you must have been injured in an auto-related accident.
How Does Med Pay Work?
Med-pay goes with you, regardless if you are driving, walking, cycling, riding with a friend, or traveling on public transportation, in or out of state. It provides coverage for all your insured vehicles, no matter who is driving, and pays first dollar on medical bills, since no deductible or co-pay is applied.
Unlike liability automobile coverage, med-pay policy limits do not refer to the total available coverage; rather, each covered individual is allowed to collect the limit amount on the coverage. For example, if you carried $5,000 in Medical Payments Coverage and four people, including yourself, were injured in an accident, you would each be able to collect the limits — $5,000 med-pay, for a total of $20,000 in benefits.
In the 12 no-fault states, which include Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, and Utah, med-pay may even pay the co-payment on the personal injury protection, or PIP, portion of your car insurance premium, or offer 100% coverage after you’ve exhausted your PIP, although in Texas a policy cannot include both PIP and medical payments coverage. Med-pay also offers pedestrian protection which covers someone hit by a car, a benefit PIP doesn’t offer in all states.
Can You Afford Not to Have Med-Pay?
If you choose to drop med-pay, your savings will be very minimal, often less than $20 for up to $10,000 in coverage, which could be used up in just one claim should you be injured in an accident. Simply stated, the money you stand to save by dropping medical payments coverage typically does not outweigh the benefits of keeping it.
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