How does medical payments coverage work?

After a car accident, drivers frequently wonder, "Does car insurance cover medical bills?"

It’s a good question because auto insurers separate medical payments coverages, which can make it difficult to understand just what’s covered and when.

Here’s a short answer: If an accident is your fault, only the occupants of other cars — or pedestrians or cyclists — are covered under the bodily injury portion of your liability car insurance. This is why liability insurance is almost always required — to protect others. That liability coverage, however, does not extend to you or your passengers.

Even full coverage car insurance, which includes collision insurance and comprehensive insurance to repair your car, does not cover injuries to the people in your car. For that, you will need to have medical payments coverage, personal injury protection (PIP), or both.

What is medical payments coverage?

MedPay is shorthand for medical payments insurance. It is typically an optional auto insurance coverage that covers your own injuries, or those of your passengers, no matter who is at fault in an accident. It also pays for medical expenses if you were injured as a pedestrian or in someone else’s car.

What (and who) does MedPay cover?

If you’re involved in an accident, even if you’re not at fault, medical payments coverage can kick in to cover you and your passengers for medical costs like:

• Doctor visits

• Hospital stays

• Nursing services and care

• EMT services and ambulance fees

• Health insurance deductibles and co-pays

• X-rays, surgery, dental care, and prostheses

• Funeral costs

MedPay is subject to coverage limits depending on your state and the specifics of your policy. Policy limits commonly range from $1,000 to $10,000. Providers like Allstate and Progressive recommend using your healthcare coverage as a metric for how much MedPay coverage you need: Choose MedPay coverage at least equal to your health insurance deductible — higher if you don’t have health insurance.

Example of medical payments coverage

Let’s say a car in front of you stops short on the highway, causing you to slam into it from behind. You’re taken by ambulance to the hospital, where you are X-rayed, treated — and sent home with a $3,000 hospital bill. Your health insurance will most likely be billed first, but that still leaves you with a $1,000 deductible and a $500 ambulance charge that isn’t covered under your health insurance policy.

If you have MedPay coverage, you can immediately file a claim with your own insurance company, without having to wait for the off chance that the other driver’s insurance might assume liability and pay your medical expenses. MedPay coverage will pick up the tab for the outstanding $1,500.

What is the difference between MedPay and PIP?

MedPay is available in almost every state, whereas personal injury protection, or PIP, is only available in 21 states and the District of Columbia. Personal injury protection, sometimes called no-fault car insurance, is typically used in no-fault states, which restrict a driver’s ability to sue if damages don’t reach a certain threshold.

MedPay typically covers only direct medical and funeral expenses, whereas PIP also covers related costs, such as lost wages, childcare expenses, or the cost of other at-home services. For this reason, PIP is usually more expensive. PIP also carries a car insurance deductible, whereas MedPay usually does not.

What states have MedPay?

Most states offer MedPay, and MedPay is required in three:

• Maine, where drivers must carry a minimum of $2,000 per person;

• New Hampshire, where drivers who carry personal auto insurance must have a minimum of $1,000 in medical payments coverage; and

• Pennsylvania, where drivers who opt out of no-fault, personal injury protection rules must carry at least $5,000 in MedPay.

MedPay is not offered in Minnesota, New York, North Dakota, and Oregon, all of which offer personal injury protection.

Read more: These are the minimum car insurance requirements in all 50 U.S. states

Bottom line: Is MedPay worth it?

MedPay works in conjunction with personal injury protection and health insurance. If you already have PIP, then you probably don’t need to add MedPay, which is less comprehensive.

Similarly, if you have good health insurance you may not need MedPay for yourself. But keep in mind that MedPay can help with out-of-pocket costs like deductibles and copays.

And if you are frequently carrying passengers, however, adding MedPay coverage to your car insurance policy can offer another layer of protection.