Car and Health Insurance Similarities

Car and health insurance are both mandatory services that provide coverage for monthly rates. Car and health insurance cover different things but companies often offer both as a discounted bundle.

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Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State University as well as technical and professional communication at East Carolina University. Zaneta has prepared technical p...

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Jan 30, 2021

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Here's what you need to know...

  • Auto coverage is only necessary for people who drive and own cars; health coverage in mandatory for all U.S. citizens
  • Consumers can use separate companies to provide health and auto coverage
  • Bundling both car and health insurance with the same insurance provider can sometimes be the cheapest option

Health insurance and car insurance provide the same coverage except that two different things are being insured.

As the names suggest, car insurance is for vehicles and health insurance provides medical coverage to people. Both insurance products come with specifications such as premiums, deductibles, and claims.

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When a health or car insurance policyholder needs to file a claim, different forms need to be submitted; however, decisions are made in the same manner.

Both car and health insurance policyholders can apply for quotes, have their coverage dropped, and pay deductibles before the remainder of their applicable expenses will be covered.

States sometimes determine the factors that insurance companies can use to approve or deny insurance claims, as seen on the California Department of Insurance’s web page.

How do car insurance and health insurance differ?

Insurance companies may sell car coverage, health insurance, or both. Major insurance providers often operate in a wide range of insurance sectors, offering coverage to individuals as well as business owners.

The main difference between car insurance and health insurance is that most people tend to buy their medical policies through employer-provided plans.

Also referred to as group rate coverage, all insurance premiums are cheaper when purchased in bulk.

Although auto coverage is only necessary for drivers and vehicle owners, health insurance in the United States is now mandatory.

When the Patient Protection and Affordable Care Act of 2010 was passed, U.S. residents were informed that health coverage was no longer optional.

While the mandatory health insurance rules have not yet been enforced, premiums and medical bills are expected to be reduced across the board.

Unlike car insurance, there are federally funded health insurance policies available to individuals based on age and income specific criteria.

High-risk drivers and motorists that have been refused coverage from standard auto insurance providers are sometimes able to get car insurance through state-funded programs.

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Do drivers need to purchase health insurance?

When drivers get into accidents and sustain injuries that require medical attention, both their car and health insurance providers may pay their expenses. While car insurance policies include personal injury liability claims, the upper limits may not be sufficient to pay high medical bills.

Drivers are not required to purchase separate medical insurance policies, but their car insurance policies must provide enough coverage to fulfill their state’s minimum liability car insurance limits.

In most cases, a person who is injured in a car accident will be able to utilize their health insurance only if the liability car insurance cap is exhausted. This means that car insurance providers almost always pay the medical expenses of claimants first.

Currently, 49 states out of 50 have driving laws that stipulate that personal injury liability coverage must be maintained by drivers at all times.

The A.M. Best website’s “Insurance Law Digest” contains a complete listing of each US state’s current regulations, laws, and rules.

Can you get a discount for buying car and health insurance together?

Until fairly recently, the only way for policyholders to get a discount on multiple policies is if they made a purchase via a group rate plan.

Like other industries, insurance companies also benefit when their customers purchase products in bulk. Insurance providers that offer both health and car insurance may give you the ability to save money through a service referred to as bundling.

Bundled insurance policies can also include other insurance products such as homeowner’s coverage and RV insurance. The amount of money that policyholders are able to save depends on the number of separate policies purchased as well as the rates that they have been quoted.

Bundling usually offers a significantly smaller discount when compared to discount programs.

You can also get your car and health insurance bundled together while qualifying for additional discounts. Insurance product bundling is only an option to consumers that choose to do business with a single insurance provider.

Although getting a bundled insurance plan can save you on premiums, you should be certain that you wouldn’t be further benefited by purchasing your coverage separately.

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