When shopping around for car insurance coverage, it is important to understand how coverages will interact with medical insurance coverage and what gaps in coverage may exist. Making the right decision about what insurance policy coverage works best for you depends on understanding medical payments coverage and how it affects you.
Medical payments coverage in an auto policy covers medical expenses of you and any passengers in your covered vehicle in the event of an accident. It also covers you and anyone named on your policy while riding in another car should the car's owner not have insurance or have insufficient limits to cover all medical treatments. It does not apply to the medical expenses of those in other cars as they are covered by the liability portion of your policy should you be deemed at fault for causing an accident.
Medical payments coverage in auto insurance policies is often an optional coverage and costs an additional premium, although some states require it to be included with all policies. Medical payments coverage limits are set by the law in each state and are usually much lower than the liability limits in the policy. Medical payments coverage usually comes with no deductible.
Medical payments coverage is not an effective substitute for health insurance as it only applies under the limited scope of auto accidents. It does help avoid the cost of deductibles should your medical insurance coverage require you to pay them for medical treatments. If the accident is determined to be the fault of another driver, the other driver's liability policy will cover all medical payments up to the liability limits of their policy.
Another factor to take into consideration is if you live in a "no-fault" state. There are a dozen states where fault is not used to determine who pays for the costs of an accident. The insurer of each vehicle involved covers the costs of their insured's expenses. As a result, if you reside in these states your car insurance coverage includes a mandatory form of medical payments coverage. If you designate your medical insurance coverage as your primary coverage in your policy, insurers may offer lower premiums.
A licensed insurance agent can better determine how your car insurance coverage will interact with medical insurance coverage as each situation is different. In general, the better your medical coverage is, the less important medical payments coverage will be. Keep in mind insurance is meant to give you peace of mind and bring you back to where you were before your accident. Make sure you get the right coverage which takes care of you and your family when you need it most.