Medical Payments (Med Pay)
Many people injured in a car accident are unaware that they have medical payments coverage, or “Med Pay,” through an automobile insurance policy and is available irrespective of fault. Med pay is akin to a small health insurance plan purchased as part an auto policy, with the twist that it works as a reimbursement plan: first you incur the bills and then you are reimbursed for the bills up to the med pay policy limit. Coverage is for the driver of a vehicle as well as all occupants of an insured vehicle. Med pay usually has a very small limit and in the great majority of instances is up to $5,000.00, or frequently less.
Driver and Passengers
You can only recover med pay from your own auto policy or from the auto policy insuring the car or other vehicle in which you were a passenger at the time of the accident. Coverage is for the driver of the insured vehicle as well as all of his or her passengers. Unlike third party liability coverage, it is not available to third parties such as the driver or passengers of the other car or truck involved in the accident.
Reimbursement: Primary vs. Secondary
Unlike an ordinary health insurance plan, where you go to the doctor and use your insurance card and pay a co-pay, medical payments coverage works on a reimbursement system. Med pay can be primary coverage or secondary coverage and you have to look at the policy to see which type you are dealing with. If it is primary, you must first go to the hospital, doctor, or other provider and incur the medical expense, and then your car accident attorney will submit the provider bill for reimbursement. If it is secondary, you get the treatment, pay your co-pay, and then your attorney will submit proof of your co-pays paid for reimbursement.
Irrespective of Fault
Because it is similar to a health insurance plan, your entitlement to medical payments bears no correlation to who was at fault for the car accident. It does not matter if you as the driver of the vehicle are at fault for the accident. If you caused the car accident due to your own negligence, you can still recover med pay. Similarly, if you were a passenger in a car and the driver of the vehicle in which you were a passenger caused the car accident, you can collect med pay if the driver has it on their auto policy.
Small Policy Limit
Med pay will have a small policy limit. Premiums are usually very low and can be only a few dollars a month. Your agent or broker may have added medical payments coverage to your auto policy without you even realizing it since you will usually be paying so little for it. Typically, med pay limits are either $1,000.00 per accident, $2,500.00 per accident, or $5,000.00 per accident. $5,000.00 is the highest amount of coverage sold by most insurance carriers.
Repayment to Third Party Insurer
If you collect medical payments from your auto policy or the auto policy of the vehicle in which you were a passenger, and then proceed to collect from the insurance company of the third party that was responsible for the car accident, you have to repay the med pay policy. The exception is that if you exhausted the policy limit of the third party’s policy and still did not have your medical bills fully paid for. Therefore, only in a policy limit accident case would you truly benefit from med pay.