What is Medical Payments Coverage?
Medical Payments Coverage is an optional type of coverage that you can add to your automobile insurance policy. It can be used to help you pay for medical expenses or funeral expenses for you or any passengers in your vehicle, regardless of whether you were at fault for the accident. Generally, Medical Payments Coverage will also apply if you are injured as a pedestrian or bicyclist so long as the accident also involved a vehicle.
Why Should I Get Medical Payments Coverage?
One way that Medical Payments Coverage can be valuable is that it is accessible as soon as you submit your medical bills for reimbursement. If you have been injured in an accident that was caused by another driver, you are entitled to make a claim against the other driver’s insurance company. However, you will not be able to receive funds from making a claim against the other insurance company until you have agreed upon a settlement amount and signed a release waiving your right to any future claims. Hopefully, this will not occur until you have completed all of the reasonably necessary medical treatment that you need to feel like you have reached the level of health that you were in prior to the accident. It can take several months for you to complete treatment, and another few months before you are able to agree on a settlement with the at-fault driver’s insurance company and receive the funds due to you from your claim. During that time, you may need access to funds to pay hospital admission fees, co-pays or other out-of-pocket costs. Medical Payments Coverage benefits can provide you the money to pay for those things.
Additionally, having Medical Payments Coverage may give you more freedom in choosing which medical treatment recommendations to follow. A lot of times, accident victims will visit their primary care physician who recommends that they see another specialist or seek further therapeutic treatment to address their injuries. In some situations, the victim will choose not to follow those recommendations because they are afraid of not being able to afford upfront or out-of-pocket costs. Medical Payments Coverage can be used to pay for those expenses, and thereby opens up more opportunities to undergo medically necessary treatment.
Also, once you reach a settlement with the at fault driver’s insurance company, you may have some outstanding balances owed to some of your medical providers. Medical Payments Coverage can be used to cover those outstanding balances, thereby leaving a larger portion of the settlement funds to be disbursed to you.
I Already Have Health Insurance; Do I Really Need More Coverage?
I am often asked if it is worth having Medical Payments Coverage if the person already has a good health insurance policy. Depending on your financial capabilities, it almost always seems worth having some amount of Medical Payments Coverage because the cost for adding this to your policy is usually only a few dollars per month. As mentioned above, the Medical Payments Coverage benefits can be used towards out-of-pocket medical expenses, can be applied towards medical bills to meet your health insurance deductible, or to pay other medical expenses or funeral expenses that are not covered by health insurance. Also, even though you may currently have a good health policy, if at some point you lose or change the job that provides that insurance, the coverage may be lost. It could make sense to maintain medical coverage that you have more control of.
Do I Have To Pay Back the Medical Payments Coverage Benefits I Receive?
Arizona does allow your Medical Payments Coverage carrier to request reimbursement of benefits, but only if they have paid out more than $5,000. The request for reimbursement will be made against any potential settlement you receive from the at-fault driver. The first $5,000 of coverage is not subject to reimbursement, therefore, it makes sense to have at least $5,000 of coverage added to your policy. It can still be beneficial to have coverage in amounts higher than $5,000 for the reasons stated above (funds are readily accessible and can allow you access to quicker and more expansive treatment), but you will have to decide the appropriate amount based on the added cost to your premium for higher Medical Payments Coverage limits.
If you have any additional questions about Medical Payments Coverage and its benefits, please feel free to contact our office by sending an email from our home page, or contact your local insurance agent.
This article should be used for informational purposes only. It is not, nor is it intended to be, legal advice. It does not create an attorney-client relationship with any reader. If you need legal advice regarding these issues, please feel free to contact me at 480-450-0626, or contact an attorney in your area.