A standard option, for an additional charge that is quite minimal, which is available under your car insurance policy is whether or not to choose “Medical Payments Coverage” (Med-Pay). Med-Pay is exactly what it sounds like: payment by your own insurance carrier, or the at-fault party’s carrier, for medical bills that you incur for personal injuries sustained in an accident. There are two types of Med-Pay typically available. The first is commonly known as “excess Med-Pay” coverage. Under this type of Med-Pay, your car insurance carrier will only provide payments for medical bills you incur which your health insurance carrier did not cover. For example, you incurred a medical bill of $1,000 for an MRI following an accident. The bill was submitted to your health insurance for payment. Your health insurance paid $800 for the bill. Assuming there are no contractual deductions or other set-offs, you have a balance of $200 owing to the medical provider who conducted the MRI. This $200 represents the amount which was in “excess” of what your health insurance paid. As such, your Med-Pay will cover this balance and you will spend nothing out of pocket. The other type of Med-Pay is generaly known as “straight Med-Pay.” Under this type, your (or the other party’s) car insurance carrier will not first require you to run your medical bills through your health insurance, even if you have the best health insurance money can buy. If you submit a bill for accident-related treatment, your Med-Pay will cover it, without question or pre-conditions. Typically, individuals who do not have their own health insurance will obtain Med-Pay just in case they are injured in an accident, require medical attention, and cannot afford to pay for it out of pocket. This is especially beneficial when the injured party is being treated on a “lien” (see Medical Liens: A Primer). Make sure to ask your insurance agent about the different types of Med-Pay available to you. Keep in mind, if you obtain a settlement/judgment against the party who injured you, your car insurance carrier wil seek to be reimbursed for the amount of Med-Pay payments it made to you. However, Med-Pay is subject to the Made Whole Rule and the Common Fund Doctrine (see Medical Payment Reimbursement – Contractual Obligations You Need to Know). Our medical attorney will thoroughly handle all settlement negotiations of your med-pay reimbursement obligations to ensure more money is put in your pocket (and not the insurance company’s).
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