medical payments in auto insurance

What Are Medical Payments and Why Are They On My Auto Insurance Coverage?

Sifting through all of the different coverages that are part of insurance policy can be a very confusing task. There are things that pay for injuries to you. There are parts that pay for injuries to others. There are coverages that pay for damage to your belongings. There are elements that pay for damage to other peoples’ things. The list goes on and on. Today we’re going to look at Medical Payments and how they can help you avoid costly fees after an accident.

What are Medical Payments?

Often referred to as Med Pay, Medical Payments pay for injuries to you and other people in your car as a part of your auto insurance, regardless of who is at fault for the accident. In a home insurance policy, it acts much the same way, but only for other people on your property (again, regardless of fault). Med Payments are often capped at a low limit, such as $5,000.

Med Payments in Auto Insurance

Currently in Florida, the first coverage to kick in after an accident is Personal Injury Protection (PIP). It pays you or resident relatives involved in the crash with you towards an initial amount of medical expenses and lost wages from time out of work, regardless who was at fault. After your PIP coverage has been exhausted, your Medical Payments coverage would kick in. Without Med Pay, Bodily Injury Liability or Uninsured Motorist Bodily Injury Liability would be the next coverage applied.

In most cases, if Liability coverage has kicked in, lawyers are involved and lawsuits have been filed. Medical Payments can be loosely considered as “good faith dollars” to avoid involving the courts. In more minor situations, Med Pay limits may suffice to cover injured parties’ expenses, allowing the claim to close quickly, effectively, and without litigation.

Med Payments in Property Insurance

Similarly, in cases of Property Insurance or Commercial General Liability insurance, Medical Payments would be triggered regardless of fault if someone was injured at your home or on your business grounds. Med Pay in a non-automobile insurance policy does not apply to you, the insured.

Medical Payments is a critical coverage because it fills gap between no-fault systems and major liability litigation and it can provide a first layer of coverage to prevent a lawsuit. Check your policy; if you don’t have Med Pay on your home, auto, or business insurance, call your agent. It’s cheaper than you think.

About the Author

Jason received a Masters of Science & Management in Risk Management & Insurance from Florida State University. He has been with Harry Levine Insurance for 9 years and handles the leadership of daily operations. He was the 2013-2014 Florida Association of Insurance Agents Young Agent Council's Agent of the Year. Currently serves on FAIA Board of Directors.

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