Auto insurance can be a tricky field to understand, especially since it seems to have a language all of its own. Today, I would like to discuss PIP and Med-Pay insurance and why it is absolutely critical that you have one of these as part of your auto insurance policy.
Given COVID-19 and its devasting impact on the local and world economy, more and more people are looking for ways to save money and many “cut corners” in certain financial areas. It is a common goal for most of us to seek the lowest insurance rates. However, this should not be accomplished at the expense of adequate coverage.
Respected Burien AllState Agent Charlie Brown notes:
“It is absolutely critical that policy holders carry either PIP or Med-Pay. I recommend these options to all of my clients.”
An overview of PIP vs. Med Pay
PIP coverage and Med Pay both pay for necessary medical services following a
car or motorcycle accident that results in bodily injury. They help pay for injuries sustained by you and your passengers in the event of an accident.
PIP and Medical also pay for any injuries in a vehicle accident for the passengers or pedestrians and bicyclists that may be injured regardless of fault. This covers accidents in a car, truck, motorhome or motorcycle.
What is PIP coverage?
PIP pays for your medical costs in addition to other injury-related expenses, regardless of which driver was at fault. The at-fault driver could be you, the other driver, or a hit-and-run driver. Some policies cover pedestrian/bicyclist accident injuries as well.
PIP coverage generally pays for:
- Ambulance transportation
- Dental care
- Psychiatric treatment
- Chiropractic services
- Funeral costs if necessary
- Childcare expenses
- Losses for surviving dependents
- A portion of wages lost from work
PIP also covers convalescent care, such as having someone come to the house to help you on a daily basis while you recover from your injuries.
PIP coverage is different than Med Pay in that it also may cover a portion of lost wages. If you are injured in a car accident and are unable to work, depending on your level of coverage, PIP may help you keep your head above water by supplementing your income while you cannot work. PIP generally provides coverage for 80% of lost wages, a death benefit, and other non-medical expenses that are related to the car accident.
Medical documentation is required and there is normally a two-week waiting period before lost income benefits are paid.
What is Med Pay coverage?
Med Pay typically is similar to PIP coverage but much less comprehensive. It covers the policyholder, the other drivers listed on the policy, members of the insured’s household, and passengers during an accident. Unlike PIP coverage, Med Pay only covers direct medical or surgical care related to physical injuries that result from an auto accident. Med Pay may help you pay for:
- Medical expenses
- Hospital expenses
- Dental care
- Funeral expenses
Med Pay will not help pay for things like psychiatric treatment, childcare, lost wages, or losses for surviving dependents or convalescent care.
Med Pay can also supplement your standard health insurance after an accident. In some situations, it can help pay for your health plan’s deductible, as well as other out-of-pocket medical expenses not covered by your health plan.
Med Pay has no deductible or copay, unlike most health insurance plans. Plus, with Med Pay, you are covered if injured as an automobile passenger, on public transportation, or by a driver while you are walking or cycling.
Am I Required by the State of Washington to Have PIP or Med-Pay Insurance?
The short answer is no. Many people opt out of PIP insurance or Med Pay because they are trying to keep their insurance payments as low as possible. Washington State law RCW 48.22.100 enumerates the limits of what must be offered by your insurance company, but drivers are free to decline coverage or seek lower limits. Policy holders can opt out of PIP coverage in writing. If the insurance provider does not obtain a written rejection authorization from the policy holder then they must add the coverage to the insurance policy. I’ve had several clients who “clicked a box” on their on line vehicle insurance application only to find out later they had declined important PIP or Med Pay coverage. In Washington State, PIP coverage must, at minimum, provide the following benefits: • Up to $10,000 for medical expenses for each individual injured in an auto accident. • Up to $200 per week for lost wages (income replacement coverage). • Up to $2,000 for funeral expenses. • Up to $5,000 for loss of services (payment to others for work you can’t do such as cleaning and yard work).
Washington State law only requires liability insurance, which pays damages to the other party if you are at fault in an accident. A very few other states do require PIP coverage as a part of your insurance policy. If you are financing a vehicle, your lender may require you to carry a more extensive insurance policy, which might include PIP or Med Pay coverage.
To find out if you currently have PIP or Med Pay coverage, contact your insurance agent and ask about the details of your policy, or visit your online policy and check your coverage details. This information can be found in the portion of your policy entitled “Declarations Page” or similar.
Why Is PIP or Med-Pay Insurance Important?
Although liability insurance is required by law, the cruel fact is that many, many people are driving around illegally, not covered by the necessary liability insurance or they are driving with the state required minimum coverage, which may not be enough to cover the medical expenses incurred in an accident. If one of these people happens to injure you and your family, you will be out of luck because there will be no insurance company to pay all of your medical bills and other recovery amounts you may be entitled to. There is insurance known as UIM/UM, or uninsured/underinsured motorist coverage, however that is a topic for another post.
Another reality to keep in mind is that many people have the most bare-bones policy possible because they are trying to keep their monthly bills low. The cost for medical treatment may extend beyond the limits of their insurance coverage, and then you will be responsible for the rest, even though you were not at fault in the accident.
Also, in some cases, even if the other, at fault driver does have sufficient liability insurance for your injuries and financial losses, you will not see that money until settlement or other resolution of the case occurs, which can often be months or even years down the road, and the medical bills incurred may end up being sent to collections if left unpaid.
Do not assume that just because you are an excellent driver that you will never be at fault in a traffic accident. If this happens and you are injured, your PIP insurance will pay for your medical bills, regardless of fault.
Should I Get PIP or Med Pay Insurance?
The short answer is absolutely YES. If your policy does not currently include PIP or Med Pay coverage, my office strongly encourages you to add this important provision. Yes, you will pay a bit more per month for your coverage, but in the case of a serious accident, you will not have to worry and stress about how to pay your medical bills. Further, many health care providers will not provide health care unless there is PIP insurance or other “First Party” insurance available. .
My office has represented many drivers who were seriously injured through no fault of their own and then found themselves deluged with unexpected medical bills and no way to pay them. Or, they are unable to receive the medical care they needed because they cannot locate a health care provider who would treat them without “First Party” insurance.
Burien Attorney W. Tracy Codd has been representing persons involved in serious auto accidents since 1987. Call for a free consultation.
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