Medical payments coverage (also known as Med Pay) is the best bargain that you have on your auto insurance policy. The premium for this coverage is relatively cheap. Medical payments coverage is single-limit per person coverage. The coverages offered by insurance companies are generally $1,000.00, $2,000.00, $5,000.00, $10,000.00, $25,000.00, $50,000.00, and $100,000.00. This coverage pays for reasonable and necessary medical expenses resulting from an auto accident.
One thing to remember about this coverage, it is not fault-based. If you are driving your vehicle down the road, and you drive into a brick wall, and the accident is entirely your fault, your med-pay coverage still applies.
Your med-pay coverage also pays for the medical bills of every passenger in your vehicle at the time of the accident, regardless of fault. If you have five (5) passengers in your vehicle at the time of an accident, then you and your five (5) passengers all have med-pay coverage up to your limits. If you have $5,000.00 in med-pay coverage, you and every one of your passengers has this limit available to them for an accident.
The great thing about med-pay coverage in the State of Nevada, is that there is no right of subrogation. If your auto insurance coverage pays for your medical bills, and you receive compensation for the value of your injury claim from the adverse driver’s bodily injury liability coverage, you are not required to pay your company back for the medical expenses that they pay under your med-pay coverage.
In the event you use health insurance coverage to pay for accident-related medical bills, your health insurance company will most likely have a “Right of Subrogation”. In other words, if you receive money from the adverse driver’s bodily injury liability coverage, you must pay back your health insurance carrier for what they paid out on accident-related medical bills. Some health insurance carriers will require you to sign a Subrogation Agreement before they pay your medical bills. The benefit of using health insurance coverage on an auto accident claim is that you obtain the benefit of any provider discounts which are associated with your health insurance policy. You are only obligated to pay back your health insurance carrier what they paid out, not the full amount of your medical bills.
Maximize your claim
We, as personal injury attorneys, always attempt to maximize the use of med-pay coverage and health insurance coverages on an auto accident claim. In the event you are involved in an accident, and you are transported from the scene by ambulance to a hospital, and the Trauma Team is involved, it is not unusual for your emergent bills to total $25,000 – $30,000.00. If you utilize your health insurance to pay these bills, you will reduce the costs of these bills substantially by plan provider discounts.
In an ideal situation, you will be able to use your automobile med-pay coverage to reimburse your health insurance carrier for their Subrogation Lien. As little as five thousand dollars ($5,000.00) in med-pay coverage may extinguish your responsibility for all medical bills and the Subrogation Lien of your health insurance carrier.
One thing to consider about auto insurance, is that the first layer of coverage costs the most. Raising your bodily injury liability limits, property damage liability limits, UM/UIM limits, and med-pay limits to higher increments of coverage, generally results in only a minimum increase in premium. In other words, if you double your coverages, your premium does not double.
Some insurance companies offer excess med-pay coverage, which only pays for bills which your health insurance carrier does not pay. This is not ideal med-pay coverage for you in the event you have health insurance.
Med-pay coverage is also not vehicle-specific. Once again, it follows you and your family to protect them in any accident involving an automobile. Also, auto med-pay coverage applies to auto v. pedestrian accidents and accidents which occur when you are not in your own vehicle.
Caveat: Offset. In the event you utilize med-pay coverage and UM coverage or UIM coverage on the same accident claim, your insurance carrier will obtain an offset for the amount of med-pay coverage paid by them.
In other words, if you have a UM claim, which has a value of $20,000.00, and your insurance company pays $5,000.00 in med-pay coverage, they will offset the value of your claim by the amount of your med-pay coverage. On a $20,000.00 claim, they will only pay you $15,000.00. This concept of offset was established by Nevada case law. If your claim is worth $25,000, and your carrier pays $5,000 in med-pay benefits on your claim, your carrier will pay you $20,000, if your UM coverage is above 15/30. Remember offset is subtracted from the value of your UM claim, and not from your UM limits.
Offset also applies to UIM claims. On UIM claims, your carrier also gets a reduction for the adverse driver’s BI limits and offset for med-pay benefits paid from the value of your claim.
Med-pay coverage is the biggest bargain that you have on your auto insurance policy. Auto insurance carriers do not advertise med-pay coverage. I have never heard a commercial by an auto insurance carrier informing the public they offer med-pay coverage to their insureds. If you do not have health insurance coverage, med-pay coverage is a must, because you are more likely to be injured in an auto accident than by any other type of accidental injury.