Med Pay vs. Personal Injury Protection

Insurance shoppers in states where no-fault insurance options are available may be wondering if they need Med Pay or Personal Injury Protection (PIP). PIP is often better known, and it can be a valuable asset no matter where you live. It covers medical costs following an auto accident, and it can cover lost wages and other costs. MedPay, as the name would suggest, only covers medical costs following an auto accident.

If you live in a state that does not subscribe to the no-fault mind set, this type of bodily injury coverage is required. Generally, states only require about $10,000, though you have the option to increase your coverage as you want.

However, there are some key differences between the two that must be explored in order to make an informed decision regarding your coverage.

Med Pay

– Covers hospitalization, medical, dental, surgical, chiropractic, x-rays, funeral – no lost wages or other professional medical benefits (rehabilitation for example)

– Requires you to pay for initial medical services out of your own pocket

– It is necessary to inform medical service providers that your insurer will foot the bill

– Will provide coverage for “non-family” members

– Provides coverage for “immediate” and “short term” medical care

– Might not be necessary if you have regular health insurance

– No deductible is associated with filing a claim.

Tip: Make sure to exhaust your medical payments coverage limits on your policy prior to seeking reimbursement through your health insurance if you live in a true no-fault state.

Read more: Liability vs. Medical Payments Coverage

Personal Injury Protection (PIP)

– Covers everything Med Pay covers, PLUS lost wages and other reasonable non-medical expenses, psychiatric and physical occupational therapy, and death benefits (depending on your policy language)

– Higher coverage limits than Med Pay are likely available

– Can have a deductible associated with it (some policies have no deductible, for a higher premium)

– Might not extend benefits to non-family member passengers (although “guest” PIP is available in some states)

Which to choose and why?

The decision regarding which coverage to choose can be guided predominantly by the state you live in, as no-fault states can have widely varying PIP coverage alternatives.

PIP is mandatory in the following states:

– Delaware
– Florida
– Hawaii
– Kansas
– Kentucky
– Massachusetts
– Michigan
– Minnesota
– New Jersey
– New York
– North Dakota
– Oregon
– Pennsylvania
– Utah

You have the option to choose PIP or Med Pay if you live in any state not listed above.

Looking at the basic coverage types, it may appear as though Med Pay may not be necessary if you already have health insurance.

But neither Med Pay or PIP is a completely viable solution or substitute for health insurance purchased in the open market or through an employer sponsored program. PIP can cover certain costs without a big deductible.

Keep in mind, you should always pick an amount that makes sense for you. $10,000 may seem like a lot, but with the rising cost of even modest medical bills, it doesn’t go as far as you think. Even a single ambulance ride can cost a few thousand dollars. When you get into more serious injuries and nights in the hospital, $10,000 comes and goes. Then you get into your standard healthcare costs, which could mean paying a large deductible before your health insurance policy kicks in. Depending on the auto insurance company, you may be able to raise your PIP levels to cover bigger accidents for a small increase in your premium.

Keep in mind, this is different than funeral expenses. Many insurers offer funeral coverage for a small cost. If you have passengers, their injuries in an accident would be covered by the liability coverage on the auto insurance policy of the at-fault driver. So it’s also a good idea to review your bodily liability limits. The state minimums in many states don’t go as far as you might expect.

Get insurance quotes online or contact your local independent agent to determine which coverage type suits you best.

Many companies may offer Med Pay and PIP, but you should shop around to ensure you get the coverage you need at the right price.