Shuman Roy is an entrepreneur, business owner, and musician. He started RoysNoys, LLC in 2013 as a music production and education service company. He also offers small business consulting and advisory services to help businesses get from start-up mode to turn-key operations. Shuman earned his M.B.A from the Stern School of Business in 2001 and has an undergraduate degree from Manhattan College in ...

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Content Writer & Entrepreneur Shuman Roy

Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Joel...

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Reviewed by Joel Ohman
Founder, CFP® Joel Ohman

UPDATED: Jun 28, 2022

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Believe it or not, most of the price associated with our insurance rates is based on the cost to settle a claim versus the amount of money actually paid for injury liability or physical damage. Think attorney fees and court costs.

MedPay insurance, or medical payments that are covered when damage is done to others, is an optional coverage addition to your auto insurance policy that eases the necessity of court involvement after an accident.

Most drivers who end up with massive medical bills after the event of a crash go looking for the person who is at-fault to cover said costs.

If that’s you, you want to be prepared so you don’t end up paying for those medical expenses out of your own pocket.

What is covered?

Basically, MedPay will cover the medical expenses associated with bodily injury resulting from an accident, without having to prove any fault.

However, you must be both injured and have expenses associated with treatment resulting from the accident.

We are talking basic injury here. Limits do not typically exceed $5,000.

Also, this coverage cannot be triggered in the future after an accident has occurred, e.g. no stiff neck two weeks down the road, or large medical bills suddenly springing up months after the crash.

According to most policy language, any insured in your vehicle is eligible for MedPay services.

‘Insured’ often refers to the named insured, the name on the auto policy, the named insured’s spouse and family members, anyone living in the insured’s household, or anyone you allow to drive your vehicle.

However, if there’s any sort of policy limit, it’s on you to be aware of who is and who is not covered.

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Are there any exclusions?

Yes, there are also some exclusions to this type of policy.

MedPay is purchased on a by-vehicle basis. This means if you have one policy covering two cars, you must purchase MedPay for both if you wish to be covered while in either vehicle.

This is similar to physical damage coverage, where you may have two cars on a policy, but only wish to have one repaired in the event of an accident.

MedPay and personal injury protection (PIP) are no-fault coverage, conceived in an attempt to reduce the overall cost of car insurance and unclog the American court system.

Whether it’s working or not is an ongoing debate.

No fault coverage refers to instances where an individual, other than the driver of the vehicle, is injured in a minor accident where fault may be difficult or impossible to determine.

This coverage will pay a specified amount of money to the injured party. The typical coverage limits for MedPay and PIP span from $1,000 to $10,000. Auto accidents do happen, so it’s usually better to have some form of coverage rather than nothing at all.

What is an example of MedPay?

You’re driving a friend to work, when you careen off the road and hit a tree at low speed while avoiding a car that wandered into your lane.

Your friend breaks her arm during the impact.

She may choose not to file a claim against your insurance company, but still needs to go to the hospital and get treatment, resulting in a $2,500 hospital bill.

If you have MedPay coverage, your insurance policy will cover the hospital costs without the need for your friend to file a claim to determine who was the at-fault driver, or charge the deductible.

The $2,500 hospital visit would be much cheaper than investigating the accident and paying court costs and attorney fees.

Is MedPay stackable?

MedPay coverage limits are ‘stackable’ in some states.

This means if you have a $5,000 MedPay limit on your policy and have an accident in which three people are injured, your insurance company would be responsible for up to $15,000 in injury expenses or medical bills that accrue.

Some argue that if you have health insurance there is no need to have MedPay insurance, as health insurance may cover your injury expense in the example above. But they don’t always necessarily overlap.

Health plans don’t always include anything that happens in a vehicle. It would be up to you to find out what your medical coverage is, and your best bet there would be to talk to your health insurance company.

Cross reference your policies; you may discover that even though you have both health and auto coverage, you would still somehow be responsible for the medical bills of anyone injured in a crash with you as compensation.

As always, it is recommended that you purchase as much insurance coverage as you can afford, and to always double check what types of coverages you have.

This way, in the event that you’re in some sort of automobile accident with other people involved, you’ll be able to use your MedPay benefits.

Get an online quote and speak to your insurance company or independent agent for informational purposes, if you have questions about MedPay coverage or cost. This will ensure you are full covered at a fair price.