Twelve or so years ago I wrote one of my first blog posts on medical payments coverage. You can read it here. It is now time for an update, as things have changed - significantly.
On a car insurance policy, at least in California, and in most states, you are required to have liability coverage. That is it. Just liability coverage. This protects other people if you are at fault for an accident. The minimum limits, in California, are $15,000 per person for an injury, $30,000 per accident for an injury and $5,000 in property damage. That is it.
But, insurance companies also sell a coverage called "medical payments" or "med pay." This policy pays for your medical bills, or your passenger's medical bills, if you are involved in an accident, regardless of fault. So, let's say you are injured as a result of someone else hitting you. Med pay will pay your bills. If you are injured because you caused a car accident, your med pay coverage will still pay your medical bills. Pretty slick!
Using med pay does not change your insurance rates. In California, a payment under med pay coverage cannot raise your rates! Remember that. Making a claim under med pay does not raise your rates!
There are several different types of med pay policies. The easiest is just a simple med pay. You are in a car crash. You incur medical bills. You submit the medical bills to your insurance company. They pay them. Easy!
Next, there is a med pay policy that has a deductible. This works like your comprehensive or collision coverage. You are involved in a car accident. You incur medical bills. You submit the medical bills to your insurance company. The insurance company pays them AFTER you have satisfied your deductible, typically $500.
Then there is a med pay coverage with a copay. Think about health insurance. You are involved in a motor vehicle collision. You incur medical bills. You submit the medical bills to your insurance company. They pay 80% of the bill. You pay the other 20%. Your copay could also be a flat amount, like $20 per visit. But typically it is a percentage.
Finally, there is excess med pay. You are involved in a motor vehicle collision. You incur medical bills. In this case, you submit your bills to your health insurance. They send you an explanation of benefits that shows your bill is either paid, not paid, or paid subject to a copay or deductible. When you get that EOB, you then submit it to your car insurance with the bill from the provider.
Understanding med pay is important. This is one of the many reasons you cannot shop insurance by the price. You need to understand the difference in med pay coverages and which one works best for you and your situation. Having an insurance agent explain this to you, and not just going online or using a 800 number, is important.
Of course, if you are unsure of what you have, ask questions!