Medical payments coverage (MedPay) explained

Medical payments coverage, usually called MedPay, pays reasonable medical and funeral expenses for you and your passengers after a car accident, no matter who caused it. It is sold in a fixed amount per person, has no deductible on most policies, and pays on top of whatever health insurance you have. Only a few states require it; everywhere else it is a low-cost option worth weighing against your health plan's deductible.

What MedPay covers

MedPay pays for treatment of injuries from a covered accident, typically including:

• Ambulance, emergency room and hospital charges
• Doctor and surgeon fees
• X-rays, imaging and lab work
• Dental work needed because of the crash
• Physical therapy and rehabilitation
• Funeral expenses

Under the standard personal auto policy form, the coverage applies to you and your household family members while riding in any vehicle or when struck as a pedestrian by a motor vehicle, and to anyone else riding in your car. Expenses usually must be incurred within a set period after the accident, commonly three years.

MedPay does not pay lost wages, household help or pain and suffering. That is the main difference from personal injury protection.

MedPay vs PIP vs health insurance vs liability

The coverage most people confuse with MedPay is their own liability insurance. Your liability coverage never pays for your own injuries. If you cause a crash and break your arm, liability pays the other driver's bills while MedPay, PIP or your health plan pays yours.

Where MedPay is required

Two states require it on every policy:

• Maine requires $2,000 of medical payments coverage (29-A M.R.S. § 1605).
• New Hampshire, which does not require most drivers to buy insurance at all, requires any liability policy that is issued to include at least $1,000 of MedPay per person. The law also bars health insurers from coordinating benefits against MedPay and lets you choose whether to claim under MedPay, health insurance or both, without being paid twice for the same bill (RSA 264:16).

Pennsylvania requires $5,000 of "first-party medical benefits," which works much like MedPay (75 Pa.C.S. § 1711). In no-fault states that require PIP, MedPay may be offered as an extra layer or not offered at all. Check your state in the state car insurance requirements lookup.

Why buy MedPay if you have health insurance

It can look redundant, but MedPay fills real gaps:

1. Deductibles and coinsurance. A serious ER visit can use up a high-deductible health plan's deductible in one day. MedPay can pay those costs.
2. Passengers. Your health plan covers your family, not your friends, carpool riders or a teen's teammates. MedPay covers anyone in your car.
3. Speed. MedPay pays regardless of fault, so you are not waiting months for the other driver's insurer to accept liability.
4. Health plans that exclude or limit auto injuries, or out-of-network ambulance and ER bills.
5. No health insurance. For anyone without it, MedPay may be the only first-party coverage for crash injuries outside PIP states.

MedPay matters less if you have a low-deductible health plan, rarely carry passengers and live in a state where PIP already covers medical costs.

A worked example

Say you carry $5,000 of MedPay and a health plan with a $3,000 deductible and 20 percent coinsurance (hypothetical figures). Another driver rear-ends you and you and a friend riding with you both go to the ER.

• Your bills: $6,500. Your health plan pays after the deductible; you owe $3,000 plus 20 percent of $3,500, or $3,700. Where the policy and state law allow it, MedPay can reimburse that $3,700.
• Your friend's bills: $2,200. Your friend is uninsured. MedPay on your policy pays the $2,200 under their own per-person limit.
• The other driver's liability insurer eventually pays for both of your injuries, including pain and suffering. Your insurer may seek reimbursement of what MedPay paid through subrogation, depending on state law and your policy.

How MedPay coordinates with health insurance varies. Some policies pay regardless of other coverage; others pay only what health insurance does not. Read the MedPay section of your policy or ask your agent how it works in your state.

How much to buy

MedPay is sold in fixed per-person amounts, starting at levels like New Hampshire's $1,000 and Maine's $2,000 minimums and rising from there. To choose a level:

• Start with your health plan's out-of-pocket maximum. A MedPay limit near that figure covers your worst-case share of a covered injury.
• Think about passengers, especially if you drive children who are not yours or carry coworkers.
• Check the price of the next tier up. The difference between levels is often small compared with other coverages; your quote or declarations page shows it.
• In PIP states, see whether MedPay adds anything beyond the PIP you already carry.

The How much car insurance do I need? can help you see how MedPay fits with your liability, uninsured motorist and other limits.

Filing a MedPay claim

1. Report the accident to your insurer and say you were injured, even if you think the other driver will pay.
2. Send itemized medical bills, not just statements, along with any explanation of benefits from your health plan.
3. Keep track of the limit. MedPay stops when the per-person policy limit is used up.
4. Expect questions if you also file with the other driver's insurer. Payments can be coordinated, and your insurer may ask you to cooperate with its recovery effort.

Key takeaways

• MedPay pays medical and funeral bills for you and your passengers regardless of fault, but not lost wages.
• Maine ($2,000) and New Hampshire ($1,000) require it; Pennsylvania requires similar first-party medical benefits.
• It is most useful if you have a high-deductible health plan, carry passengers or have no health coverage.
• It never replaces liability coverage, which pays only for injuries you cause to others.
• Check how your policy coordinates MedPay with health insurance before you choose a limit.