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MedPay versus PIP: Do you really need the extra coverage?

Learn the differences between MedPay and PIP policies so you can determine which coverage makes the most sense for your needs and budget.

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As a driver, your primary responsibility is safety — for yourself, your passengers and other people on the road.

Yet sometimes, despite our best efforts, accidents and injuries still happen. And the unanticipated costs of vehicle repairs and medical bills can be enormous, even in seemingly small collisions.

Unfortunately, it's not always possible to avoid accidents. Having insurance may help you avoid the full financial impact of a car crash.

There are many types of insurance, which allow you to determine the right coverage for your needs and budget. That said, it can be a little overwhelming to sort through all the types and levels of coverage available to you, especially since some are similar.

In this article, we'll help clarify the differences between two types of insurance — medical payments coverage and personal injury protection, or PIP. Your policy contract will dictate what's covered under each coverage in your state. While both can help pay for injuries following a car accident, there are some things you should know before adding one or both to your insurance policy.

What is MedPay coverage?

Medical payments coverage, also known as MedPay, is an add-on to your auto policy that helps cover "reasonable" medical expenses for injuries resulting from a car accident, regardless of who's at fault.

For example, a MedPay policy may cover:

  • Medical payments, including deductibles and co-pays.
  • Doctor and hospital visits.
  • Dental treatment.
  • Ambulance transportation.
  • X-rays.
  • Surgery.
  • Chiropractic treatment.
  • Some medical equipment, like prosthetics.
  • Funeral expenses.

One of the things that makes MedPay different from regular health insurance is that it doesn't cover just you. It can also cover your passengers or a pedestrian, cyclist, and more, if you injure them with your vehicle.

It can also cover you if you're a passenger, jogger, or even public bus rider who gets injured in an accident. For this reason, MedPay tends to be more useful in urban areas with lots of pedestrian traffic, even for car owners who don't drive much.

That "regardless of fault" part is important too because auto insurance policies won't pay for your injuries if you're legally responsible for the accident. Some health insurance policies even choose to exclude car-related injury coverage altogether.

Depending on your policy and state laws, MedPay may be able to function as your primary insurance in the event of an accident. That means it'll be used before your regular health insurance kicks in. But in most cases, it's a supplemental policy that's applied only after you've used your primary health benefits.

Always keep in mind that individual policies vary. You should check the details of your policy with your insurance provider to make sure you understand what's covered and what isn't.

What is personal injury protection?

Personal injury protection, or PIP coverage, is another auto insurance add-on that helps pay for medical expenses. Like MedPay, it can cover you and your passengers for injuries sustained in a car accident. It may even cover other members of your household while not in your vehicle, depending on the policy.

But sometimes the cost of an injury is bigger than just getting treatment, which is why PIP extends beyond what MedPay covers. Typically, PIP can be used for medical expenses as well as other costs like:

  • Lost income if you're unable to work due to your injury.
  • Replacement services if your injury makes it difficult to perform essential tasks like cleaning and child care.
  • Psychiatric treatment.
  • Physical or occupational therapy.
  • Rehabilitation.

Because of its larger scope, PIP is typically considered a more comprehensive type of coverage than MedPay. Again, policies can differ, so review the details of your own policy to confirm coverage.

Do you really need MedPay or PIP?

The first question you should ask about MedPay and PIP is, "Are they required?" And the answer is, it depends on where you live.

MedPay is only required in two U.S. states: Maine and New Hampshire. By contrast, PIP is required in several states, with some areas labeled "no fault." In no-fault states, auto insurance customers can receive benefits from their insurance company, whether they're at fault for an accident or not. No-fault laws also restrict motorists' right to sue one another, so PIP coverage helps ensure that drivers have sufficient coverage to protect themselves and their passengers.

States that don't have no-fault laws are called "tort" states. In a tort system, accident victims can make claims against an at-fault driver's insurance, or they can sue for damages. At this time, only two tort states require motorists to carry PIP coverage: Delaware and Oregon.

Each of these states has set minimum coverage requirements for PIP or MedPay, so you'll need to check what's necessary in your state.

What if MedPay or PIP is optional in your state?

If you're not required to carry MedPay or PIP, you may be wondering if the policies are really worth the extra expense.

The reality is that car accidents are inherently unpredictable, and with so many variables at play, each one is unique. Who's injured and how severely? Who's at fault? What kind of insurance coverage does each person have? Did the accident cause other vehicle or property damage?

In some cases, you may have the coverage you need for medical expenses through your health insurance or liability coverage. Ultimately, the decision comes down to your personal budget and risk tolerance.

Choosing the right insurance

Selecting the right insurance for your needs starts with a quick assessment of the amount you can spend in relation to the coverage you're comfortable with. Take time to talk with your insurance provider to get helpful information that enables you to make the best decision for you and your family.

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