What is Med-Pay or PIP and should I purchase it?
Medical payment benefits, also known as Personal Injury Protection or “PIP” coverage, is an optional type of insurance coverage. If an individual elects to carry a certain amount of med-pay benefits under his or her own insurance policy, that individual has added protection for medical bills that he or she incurs that are related to a collision. We recommend purchasing this coverage because it can significantly affect what an injured person will net from a personal injury settlement. If a person has med-pay benefits and is injured in a collision, his or her own policy will reimburse the insured for some or all of the medical bills up to the coverage limit. For example, if John has $5,000.00 in med-pay benefits on his policy and he is injured in a car wreck, John has $5,000.00 to collect from his own policy to apply towards payment of medical bills. An injured person can only recover up to the amount of medical bills that they’ve incurred. If John has $5,000.00 in med-pay benefits but only incurs $4,000.00 in medical bills, he is only able to collect $4,000.00 from his PIP coverage.
The caveat is that these medical bills must be related to an actual collision. This coverage is not for general medical bills that John may have incurred without being involved in a collision.
It is important to keep in mind that the purpose of these benefits is to reimburse the injured person for actual medical expenses that they incurred. These benefits are not for “pain and suffering.” Ultimately, having these benefits and applying them towards the actual medical bills will generally increase the net amount of the settlement that the injured person obtains from their settlement. Without these benefits, the medical bills are generally deducted from the gross settlement proceeds. If you are injured in a collision and Payne Law Firm represents you, we will request that you provide a copy of the Declarations Page of your own insurance policy so that we may determine whether you’ve purchased this coverage.
Remember, having the coverage on a policy that is in effect at the time of the collision is critical. Med-pay coverage only applies to collisions that occur after the med-pay coverage goes into effect. If you haven’t, purchased this coverage, we recommend contacting your insurance agent and inquiring about the cost of adding these benefits to your policy today so that you are protected in the event of a future collision.