What Is Medical Payments Coverage on My Car Insurance Policy?

two people negotiating medical payment coverage on a car insurance policy

Medical payments coverage, often shortened to MedPay, is a type of coverage that you can add to your car insurance policy. The coverage can help fill the gaps that other aspects of a car insurance policy may not cover and protect you and your passengers from costly medical bills.

If medical payments coverage is available where you live, here's what you should know before you consider adding it to your policy.

How Medical Payments Coverage Works

MedPay provides coverage for you and other passengers in your vehicle and can help pay some or all of your medical expenses in the event of an accident. The key is that this coverage kicks in regardless of who was at fault in the accident.

It can also cover your medical bills if you're hit by a vehicle as a pedestrian.

The types of medical expenses your MedPay covers may include:

  • Deductibles and copays for your health insurance plan
  • Doctor and hospital visits
  • Ambulance and emergency fees
  • Medical treatments, procedures and surgeries
  • Prostheses
  • Dental procedures
  • Extended hospitalization or nursing services
  • Funeral costs

Note that your medical payments coverage doesn't include injuries you may cause to other drivers in an accident. (That's liability insurance and is required in most states.) What's more, if you miss work because of an injury, MedPay won't reimburse you for lost wages.

MedPay is optional coverage for car drivers in most states. Only Maine and Pennsylvania require it for all drivers, and New Hampshire requires it if you choose to have car insurance.

Medical payments coverage is similar to personal injury protection (PIP) coverage, but there are some differences between the two. For example, PIP will cover lost wages in the event that you miss work due to a covered injury, and coverage limits—as well as the cost—are generally higher. Also, PIP coverage is required in no-fault states, which require all drivers to submit a claim to their insurance carrier when there's an accident regardless of who's at fault.

Should I Get Medical Payments Coverage on My Car Insurance Policy?

Adding optional coverages to your car insurance policy may sound unnecessary, but some car insurance extras may offer important benefits and make their (often low) cost worth it.

MedPay may be worth considering if your health insurance plan has a high deductible or significant copays for doctor and hospital visits. Your medical payments coverage can fill in some of those gaps left open by your health plan.

Also, if you're in a car accident caused by the other driver, it could help you get reimbursed more quickly because you don't have to wait for your insurance company to collect the money from the other driver's insurer.

That said, it's important to weigh these potential costs against the certainty of paying extra in your monthly premium. Consider your budget and the state of your savings to determine whether it's the right fit for you.

How Much Does MedPay Cost?

The additional cost of medical payments coverage can vary depending on how much coverage you choose, your insurance carrier and where you live. A common limit for MedPay is $10,000, but that can vary depending on the insurer.

For $5,000 in coverage, for instance, you could add MedPay to your policy for as little as $30 extra per year. In some cases, though, that added rate can veer closer to $100 per year. Either way, you're looking at under $10 per month for a little extra peace of mind.

If you're thinking about adding MedPay to your car insurance policy, consider how much is right for you. For example, you may get enough just to cover your health insurance deductible or out-of-pocket maximum. Alternatively, you could compare your deductible and out-of-pocket maximum to your emergency savings fund and get enough MedPay coverage to bridge the gap, if applicable.

Again, it's important to carefully consider your current budget, as well as how an injury in a car accident could impact you in the long run.

The Bottom Line

Medical payments coverage can come in handy in the event that you're in a car accident and you or someone else in your vehicle sustains an injury. Even though it's optional in most of the states where it's available, it can be highly valuable in helping you pay for costly medical bills. This is especially true if you have a high-deductible health plan.

As with other types of car insurance coverage, it's important to think carefully about how it can help you and how much it costs to maintain. Also, be mindful as you determine how much coverage to get. While it may be easy to just go for the maximum amount, run the numbers for your situation to ensure that you get the right amount of coverage. Comparing quotes from several insurers is a good way to start determining potential costs.