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UPDATED: Apr 8, 2019
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MedPay is a specific type of coverage mandated for drivers living in no-fault insurance states. Although it’s not required in states with fault-based car insurance programs, it is still an option for drivers who live in those states.
Regardless of whether or not it’s required for you, MedPay covers the medical costs that you or a passenger incur in the event of an accident.
There are 12 states that fall into the category of no-fault car insurance. Puerto Rico is also in this category. With no-fault insurance, litigation is not used to assign blame for an accident.
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As a New York resident am I Required to have MedPay?
New York is indeed one of the 12 no-fault states. By law, every driver in the state is required to carry either MedPay or Personal Injury Protection (PIP) coverage. According to New York car insurance law, drivers are not required to carry both, PIP is generally preferred because it provides more coverage.
Where MedPay will only cover general medical expenses like hospitalization, surgery, dental treatment, and funeral services, PIP will pay all those things plus psychiatric care, rehab therapy, lost wages, and more.
Other no-fault states may differ in terms of the details, but as a general rule, MedPay and PIP work the same way in all of them.
The only major difference in these two types of coverage from state to state is how they relate to individual health insurance.
Even though health insurance is generally intended to cover all of our medical costs up to a certain limit, it doesn’t necessarily apply when it comes to car accidents, MedPay, and PIP insurance.
Is There Any Way to Know What my State Requires?
Finding out how much MedPay or PIP insurance you need is not all that difficult. In most states, you can simply log onto the website of your department of motor vehicles or state insurance bureau.
If you don’t have access to the Internet, another way to find out is via the telephone. You should be able to look in your phone book and find a toll-free number for your state motor vehicle department or an office in your area.
If you can get to a local branch, you should be able to find printed information about required insurance coverage. You can also inquire through your car insurance provider. They will know that information in order to be able to cover you according to the laws of your state.
Are Standard MedPay Amounts Really Enough?
With the cost of today’s medical care, standard MedPay amounts may not be enough to cover injuries if there are multiple parties involved.
Just the hospitalization costs of one passenger can easily exceed the limits of your MedPay coverage if their hospital stay is extended.
If there are multiple injured people, it’s almost a guarantee that minimum MedPay coverage will not be enough. That being said, you do have options. The first option is to simply increase the amount of MedPay coverage you purchase.
Your second option is to purchase umbrella insurance as part of your homeowner’s policy. Umbrella insurance is specifically designed to cover just about anything that your regular insurance policies don’t cover.
It is umbrella insurance that individuals most often tap when they are sued for amounts above and beyond what their other policies allow.
While umbrella insurance is an extra cost out of your pocket, if you have valuable assets that need to be protected it is probably a wise idea. Otherwise, simply increase the amount of MedPay you carry.
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How Does my Health Insurance Relate to MedPay or PIP?
While not always the case, most health insurance plans will seek to defer payment to a MedPay or PIP plan whenever possible. That means that your auto insurance coverage will be first in line to pay your medical claims after an accident.
It’s not until you reach those limits that your health insurance kicks in and picks up payment.
In this type of scenario, it may be beneficial to carry both MedPay and PIP, because the MedPay coverage can offset the out-of-pocket expense you’ll incur from your PIP or health insurance deductible.
Other than that, there’s no real reason to have all three kinds of coverage. If you already have PIP and health insurance, you’re probably not going to need MedPay as well.
By the same token, if you already have PIP coverage and you’re thinking of taking on MedPay because you have no general health insurance, MedPay is not a suitable substitute.
Most MedPay policies have very small limits, sometimes no more than $10,000 or $25,000, which a hospital can blow through in less than 24 hours.
If I live in a fault-based state, should I still get MedPay coverage?
If your state insurance is based on the fault system, getting MedPay coverage voluntarily is not necessarily a bad idea.
However, understand that litigation resulting from an accident could end up costing you far more than limited MedPay coverage is going to provide.
For that matter, personal injury awards from such litigation will most likely exceed your PIP coverage as well. So, while you should have one or the other, umbrella coverage through your homeowner’s policy is your best protection against auto accident litigation.
If you live in one of the few states, like New Hampshire, that allow drivers to be self-insured, any claims for personal injury will come out of the pocket of individuals who decide to operate this way.
In other words, if you don’t carry a standard liability policy from a licensed insurance provider, it’s not likely you’ll be able to secure a MedPay or PIP policy either.
It’s an all or nothing game if you decide to self-insure. MedPay or PIP is mandated by law in some states, while in others it’s just a good idea.
Medical costs that arise from an auto accident can be very expensive, especially when it comes to hospital stays and rehabilitation services.
For the amount of money, MedPay adds to your annual insurance premiums its coverage that’s well worth the cost. Check with your insurance provider to see the different types of coverage in your area.
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