Med Pay Auto Insurance in California

Medical Payments coverage is optional, meaning that the state of California does not require automobile drivers to carry this coverage.  That does not mean that you should not consider it.

According to the California Department of Insurance, it “covers the cost of medical expenses if you or your passengers are injured. This coverage can pay for immediate medical care, no matter who is at fault.”  The key words here being, “immediate” and “medical.” The minimum limit you can buy is $1,000 for each person injured.”

Medical payments coverage does not necessarily have to involve you being a driver in an auto, and this is a key reason that this underutilized type of insurance can be extremely useful.  It is also not just coverage for you the driver. Med pay may provide coverage (potentially) for an accident when you are in an Uber or a Taxi.  It might provide coverage if you are on a bike and get hit by a car.  It might provide coverage for your passengers as well.  Medical Payments coverage can work in concert with your health care insurance.  If for example you have a high deductible policy, perhaps this valuable coverage can help you pay that portion.

Med pay is often broader than standard health insurance (as long as its auto related.)  It can,  in theory assist with the obvious Doctor, Ambulance, and ER bills.  But it can also assist with chiropractor, PT (Physical Therapy), Long Term Care, Prescribed Equipment, and Dentist bills.  I find this last coverage to be rather unique since most health insurance does not at all cover dental procedures.  And since dental insurance is often lacking….it might make sense to consider auto Med Pay.

According to The Law Office of Mark Blane, “insurance companies cannot raise your insurance rates for utilizing your insurance benefits, including Med Pay coverage, if you were NOT AT FAULT in an automobile accident.”  This is a very important note about the use of Medical Payments coverage in California.

The cost for this optional auto insurance is rather low.  Often $20 per year for a low amount.  Obviously it depends on your exact situation and company.  For the few companies that do offer really high med pay coverage limits, such as AIG and Chubb.  The cost goes up accordingly.

I am a fan of offering it to all consumers.  Given the low absolute cost, I really think that most people should at least consider it.  The situation changes (somewhat) if you have a higher net worth and deem the cost of this coverage not be worth the protection.

My opinion for high net worth clients is to find out what it costs to get $25K, $50K, and $100K  in med pay coverage.  Since most affluent California probably have $5K in the bank, it often does not make financial sense to insure that small of an amount.  But with claims of $50,000 and $100,00 it certainly can be of use.  Especially when you consider the Dental Aspect of it.  Again given the low cost for this insurance, I think richer Californians should consider it.   The main issue though is that very few insurers offer these med pay coverage amounts.  We here at Marindependent know which ones will offer it and which ones will not.  This is a good reasons for some to consider an Affluent Auto Insurance program.