You’ve heard the Geico commercials right? “15 minutes could save you 15% or more on your car insurance.” Well, what if you learned that if you changed one thing to your auto policy it would actually save you thousands upon thousands of dollars once you get into a car accident?
Most auto insurance companies don’t really talk about it when you are signing up. They are more focused on selling you the total policy limits and some optional coverages like rental car reimbursement. Most people actually skip over this coverage because they figure it would be covered anyway by other types of insurance they have. If that is how you are thinking, you are actually likely to cost yourself thousands of dollars. So, what is this magical coverage you ask that no-one really talks about? The coverage is called “Med Pay” or “Personal Injury Protection” (PIP) coverage, depending on the state that you are in and what optional coverages are available for your policy.
Med Pay or PIP coverage are two different types of optional coverage that you can get when you are signing up or renewing your auto policy. They are known as no-fault coverages because they pay out immediately, regardless of who caused the accident. They mainly cover medical bills for treatment you need after you have been injured in an accident, but also may include lost wages and funeral expenses. It is this exact feature that they pay out immediately, irrespective of fault, that makes them so valuable as an optional coverage.
What most people don’t realize is that just because you get into an accident, doesn’t mean that your medical bills are going to be immediately paid for by your insurance company or the other driver’s insurance company. What if the other driver doesn’t have insurance? What if you didn’t get Uninsured/Underinsured Motorists Insurance? What if your health care coverage has a high deductible? What if you were the one who caused the car wreck?
Even in the perfect scenario where you were:
- Not at fault,
- You do have health insurance
- You do have UM insurance, and
- The other driver has adequate liability insurance
The bills that need to get paid to the medical providers you use and need to get paid for within a reasonable time after you were treated, or else they may go to collections. You don’t want that on your credit report!
How This Insurance Helps
What happens is pretty simple. Once you get into a wreck and go get treatment at an ER or doctor, you supply your insurance company with the medical bill and they pay it either directly to you or to the health care provider. It is really that simple.
If you have health insurance, your health insurance can pay the bill and then any co-pays or deductible you owe would be paid to you. Even if you caused the accident and you need medical treatment, med pay or PIP should cover you (always check your policy first, though).
The kicker is, med pay is usually incredibly cheap compared to its benefit payout. By getting it, you are going to be saving yourself potentially thousands of dollars in medical treatment coverage that you may be liable for if you caused the accident, or would not get reimbursed for until you won the accident case. The best thing to do would be to max out the med pay coverage available to you for your auto policy. That way you are getting a lot more insurance coverage in case you get into an accident and don’t have lots of money on hand to cover your medical expenses.
In the United States, the likelihood of getting into a wreck is 1 out 366 for every 1000 miles driven. On average, that means you are likely to be in at least 3 – 4 accidents over the course of your life. While that may seem high, it only requires one accident to really change your life and your finances. That’s why buying insurance is so important. This is why adding more coverage at a low price point is the best thing for you to do in order to save you thousands of dollars. So go purchase or max out your med pay or PIP coverage now. Speak with a car accident lawyer if you have any other questions.