The Essential Guide to MedPay (Statistics + Info)

MedPay is a car insurance add-on that covers a portion of your medical bills after an accident. Rates start at about $5.03/mo per $1,000 of coverage but go down at higher levels.

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A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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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 22, 2021

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Here's what you need to know...

  • MedPay coverage may provide a means for paying part or all of your medical bills.
  • Most health-related issues are covered by MedPay insurance, but property damages and lost wages are not.
  • You don’t have to wait until your medical treatments are completely done before filing a MedPay insurance claim.

Unless you’re a certified auto insurance nerd like us, chances are you haven’t even heard of medical payments (MedPay) coverage before.

But don’t worry. That’s why we’ve created this comprehensive guide: to help you learn the basics about MedPay coverage and to get you thinking about if it’s a good car insurance option for you and your family. Enter your ZIP code to get a quote for adding MedPay coverage to your policy.

To begin on the right foot, let’s define what MedPay coverage is.

What is MedPay auto insurance coverage?

According to San Diego, Calif.’s Injury Law Group, “the term ‘med pay’ refers to medical payment coverage, an optional insurance coverage that is offered as a part of your auto insurance policy.”

Okay, but what does MedPay coverage really do, you might be rightfully wondering?

The Injury Law Group explains it well:

“If your health insurance coverage does not cover all of your medical bills (for example, you have copays), or the person who caused your injuries does not have insurance or their insurance company is not paying your bills immediately (for example, if there is a dispute as to liability), med pay coverage may provide a means for paying part or all of your medical bills.”

In case that doesn’t make 100 percent sense still, the short video below offers a great overview of MedPay coverage.

Now that we understand MedPay better, we can move forward in discussing this important but often misunderstood option on your car insurance policy. Okay. So now you might be wondering: How does MedPay really work?

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How does MedPay coverage work as part of your car insurance policy?

It’s a great question. Many folks don’t think about medical expenses when they’re shopping for a car insurance policy.

But remember — medical bills are one of the leading causes of bankruptcy in the United States, and those bills can stack up quickly following a car accident. That’s where MedPay coverage steps in.

MedPay coverage works in two primary ways:

  • as a direct reimbursement primary coverage (like health insurance for auto accidents specifically)
  • as a supplement to your existing health insurance coverage

If you’re a Medicare recipient, for instance, the Department of Health and Human Services explains it this way:

MedPay “insurance pays first and Medicare pays second for services related to the accident or injury.

“If doctors or other providers are told you have a no-fault or liability insurance claim, they must try to get paid from the insurance company before billing Medicare.

“However, this may take a long time. If the insurance company doesn’t pay the claim promptly (usually within 120 days), your doctor or other provider may bill Medicare.

“Medicare may make a conditional payment to pay the bill, and then later will recover the payment after a settlement, judgment, award, or other payment on the claim has been made.”

So now that you know a bit about how MedPay coverage works, let’s look more closely at exactly what it will cover.

What is covered by MedPay as part of your car insurance policy?

As we’ve already discussed, MedPay covers medical bills.

But more specifically, you might be wondering, what type of medical bills will it cover?

What medical bills are covered by MedPay?

There’s so much to think about when shopping for car insurance. We know. And you might not automatically think about what will happen following the unfortunate case of an automobile accident. But the medical bills that can pile up after a crash can be costly.

The Hartford provides the following interesting medical scenarios that MedPay will cover:

  • Passengers are hurt while you or a family member is driving – For example, you lose control of your vehicle while driving with four friends and crash into a nearby telephone pole. Your medical payments insurance can help cover the costs to treat the injuries of everyone in the car.
  • You are injured as a passenger in a friend’s car – For example, your friend is driving you and three other friends when she hits some ice and crashes the car. Her medical payments insurance can help cover the medical costs to treat everyone in the car.
  • You require prosthetic limbs following an accident – For example, after getting into a serious car accident, you need a prosthetic arm to recover. Your medical payments insurance can help pay for it.
  • You are hit by a car while walking across the street or cycling down the road – For example, while exploring new biking routes, you are hit by a car in the road. Your medical payments insurance can help to pay to treat your injuries.
  • You require dental procedures after an accident – For example, while an airbag may have saved your life in an accident, it damaged your teeth, which now need repair. Your medical payments Insurance can help pay for your dental procedures related to your car accident injuries.
  • You require extended nursing services or hospitalization while recovering from a car accident – For example, after your car accident you’re not recovering as quickly as originally anticipated. Your medical payments insurance can help pay for extended nursing services or hospitalization.
  • You need an ambulance to take you to the hospital following a car crash – For example, you are rushed to the hospital via ambulance directly from the scene of the accident. Your medical payments insurance can help pay for the costs related to your transport.

Considering MedPay coverage can cost as little as an additional $2 a month on your car insurance bill, it can be a good option given all that it covers in the case of an accident.

How much does MedPay cost?

That’s a great question. Luckily, MedPay is one of the cheapest add-ons to your car insurance policy across the board.

Your MedPay coverage cost will depend largely on the coverage limit you want, the company you do business with, and your demographic information (all those factors that help determine your overall car insurance premium). The table below offers sample MedPay rates for four of the United States’ top auto insurance providers.

Average Monthly MedPay Car Insurance Rates by Coverage Limit
Coverage Limit per IncidentGeicoState FarmAllstateProgressive
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The Progressive limits in the table above are per person, as opposed to per incident. But what doesn’t MedPay cover?

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What’s not covered by MedPay as part of your car insurance policy?

As we’ve discussed above, MedPay insurance coverage will pay for a lot of potentially costly expenses that may come your way in the wake of an automobile accident. But it’s also important to know that MedPay coverage has a number of key exclusions.

Most importantly, property damage and lost wages are not covered by MedPay coverage.

Although many other car insurance options might pay for damage done to physical property, MedPay will not. (You should know that if the property damage was caused by a driver other than yourself, then their liability coverage will pay for the damage.)

And although personal injury protection (PIP) coverage will step in to pay for lost wages following an accident, that’s not something covered under MedPay policies in general.

What’s the difference between PIP and MedPay?

That’s an excellent question, as the two types of coverage often appear redundant to folks when shopping for car insurance.

We understand that the differences between personal injury protection, or PIP, and medical payments coverage, or MedPay, can be confusing. After all, this is a very nuanced segment of the car insurance industry that few people think about until they need it.

But rest assured — having a little knowledge about these two important coverages can go a long way.

As we’ve already discussed, the key difference between MedPay and PIP is that PIP will step in to pay for lost wages following a car accident, but MedPay won’t.

The Houston, Texas-based Baumgartner Law Firm also explains that “Med-Pay has a provision that requires you to pay the automobile insurance company back if you collect from the other driver, or another negligent party. It is called subrogation and personal injury protection does not require you to pay the insurance company back.”

But even if you’re worried about policy redundancy, appeals courts across the nation are requiring auto insurers to pay out on each separate policy following a car accident.

The Denver-based law firm of Tyson & Mendes offers that, for instance, “In Calderon v. American Family Mutual Ins. Co., 383 P.3d 676 (2016), the Colorado Supreme Court reviewed an action filed by Calderon against his own automobile insurer after being struck by an uninsured motorist.

“The facts of the case were undisputed: an uninsured driver ran a stop sign, collided with Calderon, and Calderon sustained injuries that rendered him unable to work for over a month.”

Mr. Calderon had both uninsured motorists/underinsured motorists (UM/UIM) and MedPay policies with American Family Mutual. The insurance company attempted to hold the policies in tandem — that is, they wouldn’t pay on both policies but would pay it as a single claim.

Ultimately, the Colorado Supreme Court did not agree, and we should take away from this case, Tyson & Mendes explain, that “insurers of automobile policies are now on notice that there can be no setoff when they pay out on separate coverages for which they charge separate premiums in Colorado.”

Who is covered by MedPay as part of your car insurance policy?

In most states, the following groups will be covered by your MedPay policy:

  • The policyholder, whether they’re a driver or passenger in the insured vehicle
  • The policyholder, if they’re injured when a passenger in someone else’s car
  • Passengers injured while riding in the insured vehicle
  • The policyholder or covered family members if they’re injured while walking as a pedestrian
  • The policyholder or covered family members if they’re injured while riding a bicycle

How does MedPay as part of your car insurance policy interact with worker’s compensation?

This is a great question, as both MedPay and worker’s compensation can be confusing programs for consumers to understand fully.

The federal government’s Center for Medicare & Medicaid Services offers a great primer about this. They explain that “a workers’ compensation law or plan means a law or program administered by a state (defined to include commonwealths, territories and possessions of the United States) or the United States to provide compensation to workers for work-related injuries and/or illnesses.”

So there are some clear lines here already — if an accident happens at the workplace, worker’s compensation coverage will become the primary payer. If it happens in a personal vehicle, MedPay will step in first.

The Center for Medicare & Medicaid Services goes on to add that “as part of a workers’ compensation settlement, funds may be set aside to pay for future medical and prescription drug expenses related to the injury, illness, or disease.”

So it’s good to know that the policies might not be entirely redundant, especially if a car accident is work-related and you can draw from both MedPay and worker’s compensation benefits.

We recommend speaking with your car insurance agent and worker’s compensation representative (if applicable) to understand how your MedPay and worker’s compensation can work in tandem to best protect you and your family.

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What car insurance companies offer the best MedPay coverage?

What the best company is depends highly on you and your family’s car insurance and MedPay policy needs. And while shopping for car insurance policies is subjective to each individual case, the key issues you always need to prioritize include:

Any car insurance company that wants to do business in a state that deems medical payments coverage either requisite or a requisite option must offer MedPay coverage policies. Thus, most national insurance companies will offer personal injury protection coverage.

The biggest car insurance providers in the United States offering personal injury protection coverage include:

  • Allstate
  • American Family
  • Farmers
  • Geico
  • Liberty Mutual
  • Nationwide
  • Progressive
  • State Farm
  • Travelers
  • USAA

Get started on your insurance journey today by entering your ZIP code below to compare rates for you and your family.

If I have health insurance, do I need MedPay as part of my car insurance policy?

This is an excellent question. On the surface, MedPay coverage and health insurance may appear redundant. And though the coverages might be for some folks, for many the differences between the two could mean the difference between financial wellbeing and bankruptcy following a car accident.

The Cromwell, Conn.-based law firm of Donovan and Morello explains that “MedPay only pays for medical bills for accident-related injuries… [but especially for] people without health insurance, it is a wise purchase.” Our research shows that this is consistent advice from both lawyers and insurance professionals.

Donovan and Morello go on to explain how MedPay insurance works:

“Med Pay is not like health insurance. You don’t hand an insurance card at the check-in desk at the doctor’s office or hospital and ask them to direct bill.

“Instead, one of two things will occur. If you go to the hospital, you will be billed at a later date, and you can forward those bills to your insurance company for payment.

“If you go to a doctor’s office that requires payment upfront, then you will have to pay and then submit a request for reimbursement from your auto insurance company.

“In some instances your doctor’s office will directly bill the med pay insurer if you provide them with the contact information for them to do so.”

The video below from the Birmingham, Ala. law offices of Farris, Riley & Pitt offers another great look into how MedPay coverage can be helpful in dire circumstances, whether or not you have health insurance.

And here’s an interesting story that might convince you MedPay really does pay off in the end. The Boston-based law firm of Breakstone, White & Gluck explains that “in Golchin vs. Liberty Mutual Insurance Company, SJC-11305, the plaintiff suffered serious personal injuries traveling as a passenger in her husband’s car. Her medical expenses exceeded $100,000.”

That’s a lot of medical expenses. And her car insurance company — Liberty Mutual — was trying to avoid paying out to the plaintiff’s family, despite their MedPay coverage, citing the family’s health insurance had already paid the medical bills, which was true.

But — and this is key — Breakstone, White & Gluck explain that “in its August 8, 2013 decision, the [Massachusetts] Supreme Judicial Court held that Liberty Mutual could not avoid the payment of the medical payments coverage and that the standard Massachusetts auto insurance policy provided for payments to the insured even when the health insurance company had made the payment.”

So in the end, what could be just a few extra dollars on your car insurance payment each month to pay for MedPay coverage could end up saving your family tens of thousands of dollars in the case of an accident.

How do I file a claim with MedPay insurance?

Another great question. According to the legal advocacy group NOLO, you don’t have to wait until your medical treatments are completely done before filing a claim with your car insurance company on your MedPay coverage.

That’s good news, as those bills can come quickly following an accident, accumulating right in front of your eyes.

NOLO explains that “fault insurance states — the majority of states, in other words — normally have MedPay coverage, although some may have both MedPay and PIP coverages.

“MedPay covers you, your passengers and any pedestrians injured in an accident involving your vehicle. It may also cover you when you are riding in someone else’s car, but as with PIP, the other driver’s MedPay coverage is probably ‘primary.’

“As with PIP claims, you don’t have to wait until you finish treatment before you can make a claim. You can send in your bills as they come in.”

What do I do immediately after an accident?

As stated above, you should always notify your car insurance provider as soon as possible. There are a few things that usually come before this step though.

One of the most important things that you can do is to get law enforcement involved.

States such as Florida don’t require that you call law enforcement in the case of all traffic incidents, but involving law enforcement for something that seems so small as a dented bumper gives you an official record of the incident to take to your car insurance provider, attorney, and before the court if it comes to that.

Once you have an official record of the incident, law enforcement will give you an incident report number to use as a means for finding their report of the accident after they have filed it.

When you call your agent or contact your car insurance provider, you should have your policy information on hand as well as the incident number and any other relevant facts you were able to collect at the scene.

These facts might include:

  • The other driver’s license plate number
  • The driver’s license number of the other driver
  • The car insurance policy information from the other driver if you have it
  • Any other relevant paperwork such as your driver’s license number, your license plate number, and even your health insurance information

You should also keep in mind that you are not just an eyewitness in your case. You are also the lead investigator. This means that you should collect as many facts as you can before contacting your car insurance provider.

It also means knowing what not to say or do after an accident. Some of these things include:

  • Not leaving the scene
  • Not calling law enforcement
  • Not losing your temper
  • Not admitting fault with statements such as “I didn’t even see you”

And you should never speak to the other driver’s insurance company or lawyer without your agent present or without a lawyer of your own.

Who needs MedPay as part of their car insurance policy?

As we’ve already discussed at length, MedPay and health insurance coverage are not mutually exclusive.

But it’s also wise to consider how MedPay can be a safety net in case you exceed your health insurance plan’s limits or receive charges that it doesn’t cover, such as for chiropractic care or an ambulance ride, let alone that pesky deductible.

So you might still be wondering, who really needs MedPay?

Well for starters, any driver without health insurance will greatly benefit from MedPay coverage as part of their auto insurance in the unfortunate case of a car accident or other vehicular event.

MedPay can also be a smart car insurance add-on if you frequently drive passengers that aren’t part of your family, as MedPay applies to anyone riding in your car at the time of the accident.

Where is MedPay required as part of your car insurance policy?

Although personal injury protection (PIP) coverage is required in many states, MedPay is currently only required in two: Maine and New Hampshire.

According to the State of New Hampshire Insurance Department, “per New Hampshire Statutes, NH RSA 264:16, if you buy Auto Insurance for personal use, you must also buy Medical Payments Coverage.

“Medical Payments Coverage pays for medical expenses incurred as a result of an automobile accident (regardless of fault). By law, you must buy at least $1,000 of Medical Payments Coverage.”

Similarly, the Maine State Legislature decrees that “a motor vehicle liability policy issued for a motor vehicle registered or principally garaged in this State must provide coverage in an amount equal to or greater than $2,000 per person for medical costs incurred as a result of injuries sustained in an accident involving the insured vehicle by the driver and passengers in that vehicle.”

The Insurance Information Institute offers this great guide to your auto insurance financial requirements in each of the 50 states.

You might be interested to know that MedPay is not available in three American states: Minnesota, New York, and North Dakota.

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Medical Payments Coverage – The Bottom Line

As we’ve already discussed, MedPay coverage is often an easy, affordable add-on to your existing car insurance policy.

Remember, MedPay coverage works in two primary ways:

  • As a direct reimbursement primary coverage (like health insurance for auto accidents specifically)
  • As a supplement to your existing health insurance coverage

And even if you have good health insurance, MedPay can be a good idea as it covers some things health insurance doesn’t, such as a deductible or chiropractic care, and other passengers in your vehicle, which personal health insurance won’t.

We know MedPay can be a confusing portion of your car insurance journey, but that’s why we created this comprehensive guide: to help you become a better informed — and thus safer — car insurance consumer.

What part of this guide was the most helpful? Is there something we could explain more clearly?

Use our handy online tool below to get started on your car insurance journey today simply by entering your ZIP code.

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