An Introduction to Medical Payments Coverage

One of the most difficult things about car insurance is understanding “what covers what.” If you are in an accident with another vehicle, and your 8-year-old niece suffers a broken arm, whose car insurance company pays the bill? What element of coverage - liability, medical payments, or something else - is relevant? It can be a bit confusing.

The Basics of Medical Payments Coverage

Liability coverage deals with fault. If you cause damage to another person or their property, your liability insurance covers the damages. Liability coverage does not extend to you or your property. For that, there is medical payments coverage, as well as uninsured motorists and collision / other-than-collision coverages.

Medical payments coverage, by contrast, covers you and your passengers without regard to fault. It also covers any other driver covered by your general insurance agreement (i.e. spouse, foster child, resident family member, etc.) so long as they are driving an automobile covered by your car insurance.

Medical payments coverage pays up to a per-accident limit specified by your insurance contract, for all “reasonable” expenses incurred for necessary medical and funeral services rendered within three years from the date of the accident. “Reasonable” is not defined, but generally assumed to mean “moderate” - i.e. your insurance company may not pay for the most expensive doctor in your county, but they wouldn’t expect you to use the least expensive one either. Also, this three year “statute of limitations” exists so that the insurance company can more accurately calculate its expenses, and also because after three years, it might be difficult to tell if your injuries were actually due to the accident or not.

Injuries Sustained as a Pedestrian

Medical payments coverage also covers injuries sustained by you or your covered family members as pedestrians, however, this only applies to four-wheel vehicles. In other words, if your husband is hit by a motorcycle, medical payments coverage is not the appropriate coverage to consult. Similarly, most business vehicles are also excluded from this pedestrian coverage, since they are covered by their business policies.

Better Understanding Your Car Insurance

Proper medical payments coverage can mean the difference between being “made whole” again, and having your life shattered due to injuries sustained as a motorist, passenger, or pedestrian. It is vitally important that you understand your current coverage levels, and what their consequences are.

The four elements of car insurance are liability coverage, medical payments coverage, uninsured motorists coverage, and coverage for damage to your auto (including collision coverage and other-than-collision coverage). Each form of coverage has its own limits and exclusions, and if you’re unaware of what they are, find your insurance paperwork (often called a “dec sheet”) and review your policy. Then shop around online to improve your coverage. Even if you’re satisfied with what you have, you may be surprised - many consumers find that they’re able to increase their coverage while lowering their car insurance rates at the same time. With just a few hours of research, you could save yourself hundreds of dollars on your annual premiums.