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Medical Payments Coverage

If you're like most vehicle owners, you're concerned about who will pay your medical bills if you're injured in an accident. If you have a personal auto policy, the medical payments portion of your policy pays the medical expenses incurred (up to set limits) when you or other people insured under your policy (e.g., family members) are injured in a car accident. Medical payments coverage also extends to people not insured under your policy if they're injured while they're passengers in your car.

How it all began

Historically, insurers have been reluctant to pay for treatment before determining which driver caused the accident. The purpose of medical payments coverage is to pay medical providers immediately for medical treatment related to auto accident injuries, without waiting to see who is at fault and ultimately liable.

How it all works

Medical payments coverage typically pays reasonable and related expenses (e.g., doctors, physical therapists, home health aides) resulting from injuries sustained in a motor vehicle accident. Benefits are limited to the amount of coverage that you select on your policy.

It's important to note that medical payments coverage is provided for a limited period of time, typically one to three years from the date of injury. Insurance companies impose time limits on medical payments for a couple of reasons: (1) the insurer wants to know what the total payments will be in a reasonable amount of time, and (2) after a number of years, it may become difficult to determine whether the treatment requested is for the covered injury or for a later-occurring injury that is not covered. These time limits help insurers prevent fraudulent claims.

Who is an insured?

The way in which your insurance policy defines an insured is very important. Anyone who is an insured has some protection under that policy. If you bought the policy and own the car, you're the named insured. But you're not the only person who may be covered by the policy. Family members are covered while occupying your car (occupying includes getting in and out of it) and if they're struck by another car when they're walking. Other people are covered while they're occupying your car, but not as pedestrians.

What's not covered?

The exclusions section of your insurance policy specifically sets out the limitations and restrictions on the coverage provided. Generally, exclusions are meant to avoid duplication with other, more suitable insurance coverage; to reinforce that the policy is for personal rather than business risks; and to eliminate coverage for certain specific high-risk events and activities.

As a result, medical payments coverage generally will not cover you for bodily injuries sustained while using a vehicle for business purposes--commercial policies are better suited for that type of coverage. Also, your auto insurer is likely to deny a medical payment for a workplace injury. Workers' compensation is better suited to cover such losses.

Not your standard risks

There are some vehicles and activities that your insurer won't cover. So, if someone is injured and incurs medical bills as a result, it's likely that they won't be covered. Some of these exclusions pertain to:

  • Unlawful use: Anyone who uses your vehicle without a reasonable belief that they are entitled to do so is not covered (e.g., when a thief or joyrider steals your car).
  • Vehicles with fewer than four wheels: Typical policies won't provide coverage for any injuries you sustain while occupying a vehicle with fewer than four wheels. Vehicles such as motorcycles present additional risks that your policy doesn't intend to cover. You can purchase additional insurance to cover these types of risks.
  • Vehicles located for use as a residence or premises: If you are injured in the equivalent of someone's house, your auto insurance isn't really the best place to look for payment. A homeowners insurance claim may be more appropriate. For example, coverage is excluded if you are injured in a trailer that has been set up as a campsite.
  • Autos not listed on the policy: Insurers can calculate risks only on your known vehicles. If a vehicle is not listed on your policy's Declarations Page, injuries sustained while using it will not be covered. This exception doesn't apply to you (or your spouse) if you're in a vehicle that is owned by a different family member.
  • Racing: You guessed it--no coverage when you compete in, practice, or prepare for any prearranged or organized racing or speed contest. If you're a race-car driver, you should purchase insurance that is designed to cover the obvious risks of race-car driving.

Beyond the unexpected

Your policy may also exclude medical payments coverage for catastrophic events that cause bodily injury. If such an event occurs, it's likely that the resulting claims would wipe out an insurance company's financial resources. They include:

  • Discharge of a nuclear weapon, a nuclear reaction, radiation, or radioactive contamination
  • War
  • Insurrection
  • Rebellion or revolution

Limit of liability

Your policy is not an unlimited source of funds for you to draw on in case of an accident. There are limits to how much medical payments coverage your insurer will provide. The liability limits are listed on the Declarations Page of your policy. Dollar amounts will vary, but they're typically $5,000 or $10,000. This limit is the maximum amount of medical payments that will be made by the insurance company, per person, for any one accident. You can usually purchase higher limits rather economically.

Other insurance

If you have two policies providing medical payments coverage, each policy will pay its proportional share of total coverage. If you're injured while occupying someone else's car, your policy will pay (up to its limits) only those medical expenses you incur that exceed the coverage provided by the policy covering the car you were occupying.