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Liability vs. Medical Payments Coverage

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It’s that time again, where we look at a common insurance match-up.

Today’s contenders: “Liability vs. medical payments coverage.”

So what’s the difference between liability and medical payments coverage? Usually a substantial amount of money!

Seriously though, TTAI gets a lot of questions about these two coverage types…specifically, why you would need medical payments coverage if you have liability coverage.

Liability vs. Med Pay

Liability coverage is designed to cover you against bodily injury and property damage that YOU cause to OTHERS as a result of your negligence.

There are millions of possible instances, but for our purposes let’s look at a car accident.

If you caused the accident, for whatever reason, and hurt someone or damaged their car, your auto liability insurance “responds” by paying the insurance claim.

You would be considered “at-fault” for the accident.

Medical Payments coverage, on the other hand, is a “no-fault” coverage. This means “negligence” does not need to be proven – the injured party gets their money without having to go to court.

Also, medical payments coverage does not protect you against “no-fault” property damage. Only bodily injury liability is covered here.

How Much Money Are We Talking Here?

While you can choose your “limits” for both liability and medical payments coverage, the available liability coverage limits are usually much higher than medical payments, as the insurance company doesn’t get a chance to defend themselves in court if a claim is made for damages.

You may be offered a maximum of $10,000 in medical payments coverage, whereas liability limits can reach into the millions. The lower available limits dictate that medical payments coverage is designed for minor injuries.

As you can imagine, insurers certainly don’t want to pay out $1,000,000 without determining if their insured was “at fault” for the bodily injury in question!

Home & Auto Are Different

Auto: Medical Payments – purchasing this coverage may provide payments for injured parties in your vehicle; including yourself. You may need this if you have a minor fender bender where another car is not even involved.

Depending on which state you live in, auto medical payment coverage is an optional coverage. This means you do not have to purchase it as part of your coverage.

Home: Medical Payments to Others – this coverage on a homeowner’s insurance policy is NOT designed to cover your minor bodily injury (or any other household member).

You must have regular health insurance coverage to protect yourself against bodily injury you suffer that DOES NOT result from someone else’s negligence, i.e. breaking your ankle in your own front lawn.

Unlike auto medical payments coverage, you do not get the option to choose medical payments to others. It is simply part of your policy. You can choose the limits though and it’s relatively cheap to max it out to the highest available limit.

Still Not Sure?

Compare insurance quotes online and/or visit an independent insurance agent to discuss both these policy options.

You may be able to save some money on insurance premium by only purchasing the coverage you need.

Read more: How to lower your car insurance premium.

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