PIP or Med Pay Car Insurance Coverage- Which is Better?
Med Pay or medical payments coverage is kind of like health insurance coverage for an accident on your automobile insurance policy. Medical payment coverage or “Med Pay” is different but similar to Personal Injury Protection or PIP.
Medical payments coverage covers people in the vehicle of the insured driver and pays up to the coverage limits per person for medical bills because of injuries caused by the accident.
What are the differences between PIP and Med Pay?
• PIP also covers 80% of lost wages while Med–Pay will not cover lost wages.
• Med-Pay has a provision that requires you to pay the automobile insurance company back if you collect from the other driver, or another negligent party. It is called subrogation and personal injury protection does not require you to pay the insurance company back.
Often, if an injured party is making a claim against another driver, collecting on medical payments coverage only accelerates your recovery, as you have to pay the automobile insurance company back when you collect from the third party. It’s taking one hand to give to the other and for that reason, personal injury protection is more valuable than medical payment coverage.
Both personal injury protection coverage and medical payment coverage are usually sold in increments of $2500. Medical payment coverage is usually a few dollars cheaper than personal injury protection because of the subrogation or payback rights of the insurance company and also the fact that med pay does not cover lost wages.
If a person has health insurance coverage, there is really no reason to pay for medical payment coverage.
Both the personal injury protection and medical payments are “no-fault” type coverage meaning that if you were in the car and there was coverage that will pay regardless of who’s at fault.
We recommend that drivers consider carrying PIP coverage instead of medical payment coverage because there is no payback obligation on PIP and it also covers 80% of lost wages.
Personal injury protection coverage can also be stacked meaning a passenger may be covered by more than one policy.
An example would be if the driver of the car carried personal injury protection and the passenger who was injured also carry personal injury protection on his or her own vehicle. Under this scenario, the injured passenger would be able to collect on both policies provided the medical bills exceeded the personal injury protection limits of the driver’s policy.
If you have questions regarding insurance coverage after an automobile accident feel free to contact the Baumgartner Law Firm for no obligation consultation regarding your rights and options.