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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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®

UPDATED: Jul 19, 2021

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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 to others,” is an optional coverage addition to your auto insurance policy that eases the necessity of court involvement after an accident.

What Does MedPay Cover?

Basically, MedPay will cover the medical costs 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.

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

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

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MedPay Exclusions

However, 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.

Let’s look at a MedPay example:

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 at fault or charged the deductible.

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

MedPay Might Be 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 expense.

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.

As always, it is recommended that you purchase as much insurance coverage as you can afford.

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