Med Pay (Medical Payments Coverage) and PIP (Personal Injury Protection Coverage) are first-party coverages that apply to the insured, their passengers, and sometimes other people. In states with no No Fault laws, Med Pay can be found. PIP is available in states where have no Fault laws.
Med Pay will usually cover reasonable medical and funeral expenses resulting from bodily injury that is caused by an accident. It covers the insured vehicle occupants (named insured or family members per policy definitions), pedestrians struck by the insured vehicles, as well as any other persons who are able to sustain injuries while in the vehicle. You should read the exclusions to this coverage.
Med Pay liability is limited to the amount stated in the Declarations. For example, $10,000 Med Pay is the maximum amount you can have per qualified injured party in the case. This coverage does not include wage loss allocation. There is also no “double-dipping”. If you receive a settlement from an at-fault party’s insurer that includes your medical bills, most companies will ask for reimbursement (subrogation). If your coverage is Uninsured Motorist (or Underinsured motorist), Med payments will be deducted. Med Pay is intended to pay for your treatment but not give you a financial boost.
PIP is coverage that is available under the No Fault Law. It doesn’t matter who was at fault for the accident. These rules are still in effect. PIP covers medical bills, wages, and funeral expenses. It is intended to help people who have been injured in an auto accident, regardless of fault, so that they do not suffer financial hardship and wait to sue for their only recourse. The state’s PIP coverage is different. This coverage is intended to provide the benefits necessary to keep the injured party “whole”, with the ultimate goal of limiting litigation. Is it possible? Not sure. Although the injured party may still file a Bodily Injuries claim against the at-fault driver, there are certain thresholds that must be met. Only certain parts of the claim can be covered by the suit/claim. The settling company will reimburse the injured party for med bills. This reimbursement can be made regardless of whether a bodily injury case has been filed.
Substitute Services pays for the work that the injured party can’t do, such as mowing the lawn. PIP usually reimburses mileage from and to the doctor. The amount of wage loss will be determined by a chart. It won’t exceed 100% unless the employee’s salary falls below the allowance.
The insured can purchase higher PIP limits, similar to Med Pay. However, this will usually only be available to family members and named insureds (per definitions). Other passengers in an insured vehicle will only receive the minimum state-required limits.
Both PIP and Med Pay provide pedestrians who are struck by an insured vehicle with the possibility of receiving the benefits.
Med Pay and PIP coverages are subjected to all terms and conditions of the policy. As an insured, you have the responsibility to review your policy and become familiar with it. Ask your agent for clarification or contact your company representative. Don’t assume anything.
Finley Keller has been in the insurance business for nearly 30 years. She started as an agent licensed with a CLU and then moved into claims. Auto, homeowner, worker’s compensation and other policy types that are liability-only. Material and casualty.
The last ten years of her life were spent working in SIU (Special Investigative Unit), which specializes in fraud detection. She was the manager of SIU for four years, and was responsible for fraud cases and training employees to comply with state regulations. She is a former member of NCFIA (Northern California Fraud Investigators Association). Through the American Educational Institute, Inc., she is a Senior Claims Law Associate.
