Do you need medical payments coverage?

Allie Johnson

If you get hurt in a car accident, bills from the ambulance, ER and doctors could start piling up before the ink dries on your car insurance claim paperwork.

Experts say that if you want to make sure you can pay those bills right away, you might want to make sure you have medical payments coverage – often called “med pay” or MPC.

Many drivers either don’t think to buy medical payments coverage or they buy it but later forget they have it, according to Lynette Hoag, owner and managing partner of Hoag Law Group LLC, a Chicago firm that specializes in personal injury and insurance cases. “Many people don’t know that it exists and that it’s the quickest way to get your bills paid after a car accident,” she says.

The benefits of med pay

Medical payments coverage, which you buy from your own car insurance company, covers medical expenses for you and your passengers after an auto accident, no matter who was at fault. Some consumers who have health insurance assume they don’t need med pay, but experts say it makes sense to have it. Here’s why: 

• Medical payments coverage is inexpensive. For example, insurance agent John Gaglione, owner of GBSA Insurance in Illinois, says $5,000 worth of med pay coverage can cost less than $10 a year. Also, med pay typically does not have a deductible, says Bob Passmore, senior director of personal lines at the Property Casualty Insurers Association of America, a trade group.

• Med pay can pick up the tab for expenses that might not be covered by health insurance. For example, med pay might pay for auto-accident-related dental and chiropractic costs and even funeral expenses, according to Passmore.

• It could help if you have high-deductible health insurance. Depending on several factors (your state, your auto insurer, your car insurance policy and your health insurance policy), med pay might cover out-of-pocket health insurance costs, such as deductible and co-pays.

• Your passengers might not have health insurance. “What if you’re taking your son or daughter to a Little League game, and you’re giving a ride to one of the kids down the street, and you get into an accident and find out he has no health insurance?” Gaglione says.

• It can pay up to the policy limit for each person covered. If you have $5,000 in med pay coverage, for example, you and each of your passengers could get up to $5,000 for medical bills or other covered expenses, Passmore says.

One of the biggest benefits of med pay, though, is how quickly it pays out, Hoag says. One of her clients got into a car crash in 2010 with a criminal who was fleeing police. Hoag’s client had to be treated at a hospital, which cost thousands of dollars. “Med pay paid the emergency room bill, no problem,” Hoag says.

But although the woman had uninsured/underinsured motorist coverage, it took more than two years to collect any more money from her insurance company. If you don’t have med pay, that kind of delay in getting paid can lead to unpaid medical bills that can hurt your credit, especially if the bills are sent to collections, according to Hoag.

“Med pay pays your medical bills, to the policy limit, without question – without nitpicking, without quibbling over fault,” Hoag says.

Should you have med pay?      

Medical payments coverage laws and options vary by state, so it’s important to know what is required and offered in your state, says Carole Walker, executive director of the Rocky Mountain Insurance Information Association.

Colorado, for example, requires auto insurers to offer at least $5,000 in med pay – and any consumer who doesn’t want it must decline in writing, Walker says. Some other states require drivers to carry a certain amount of med pay coverage, Passmore says. And in states where it’s not required, med pay usually is available as an optional add-on to a car insurance policy.

In no-fault car insurance states, such as Michigan, Massachusetts and New York, where drivers are required to purchase personal injury protection (PIP) to cover their own medical bills after an auto accident, med pay coverage sometimes also is available. PIP is similar to med pay, but typically has higher policy limits, covers a wider range of expenses (including lost wages) and has a deductible, experts say.

If you’re not sure whether you have med pay, Hoag recommends checking the declarations page of your car insurance policy. It’s important to learn the amounts and details of coverage before you have an accident, she says.

And if you don’t have medical payments coverage, experts recommend considering it. Most companies offer the option of medical payments coverage with limits of $5,000, $10,000, $25,000 or even $50,000 per person per accident, Gaglione says.        

Gaglione recommends buying as much medical payments coverage as possible. “It’s not the place to try to save money,” he says.