Can You Use Health Insurance in a Car Accident?
Multiple forms of insurance can cover medical costs after an accident: health insurance, personal injury protection (PIP) and medical payments (MedPay).
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If you have PIP or MedPay in your car insurance policy and are in an accident, you'll typically use that coverage first, before your health insurance. . Drivers without PIP or MedPay coverage can use health insurance, but here are some advantages to adding PIP or MedPay to your car insurance policy.
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Do you use health insurance or PIP after a car accident?
If you need medical care after a car accident, you should use up your PIP and MedPay auto insurance coverage before filing a claim with your health insurance.
There are two reasons for this: First, most health insurance plans have a deductible, which you must pay before insurance kicks in. This means if you get medical treatment for a car accident and send the bill to your health insurance company, you'll have to pay the deductible before they'll reimburse you for your expenses. PIP and MedPay coverage, on the other hand, usually have no deductible (unless you specifically chose one). So if the treatment cost is less than your PIP/MedPay coverage limits, you might not have to pay anything.
Second, most health insurance plans have a "subrogation clause." This states that if you are owed any money for the reimbursement of health care costs, your health insurance company is entitled to that money for their expenses. Both PIP coverage and money from a liability claim fall under this category. So you save a step by using your PIP/MedPay allotment first.
The good news is that you can usually put your health and car insurance companies in contact with one another, and they will sort it out. If you have more than one source of funds, such as PIP and health insurance, you'll typically pay less than if you only have one or the other. For example, if you live in Florida, PIP is required by law but only covers 80% of your health care costs. If, after an accident, you get a doctor's bill for $1,000, PIP will cover $800, and your health insurance should pay the remaining $200.
What are PIP and MedPay?
Personal injury protection (PIP) is a form of auto insurance that reimburses you for medical expenses and some other costs, like lost income, after a car accident. Unlike other types of car insurance, you don't need to prove the other driver was at fault. And you'll usually be paid as soon as you file your claim.
PIP is mandatory in 12 states and optional in seven others. States that require PIP are called no-fault states. PIP limits generally start at $10,000 but can reach over $100,000. In Michigan, PIP is unlimited. Sometimes PIP only covers a percentage of your medical expenses. For example, in Florida, it's 80%. Some states also allow you to have a PIP deductible to lower car insurance rates.
Medical payments coverage, or MedPay, is similar to PIP. It typically applies to medical and funeral costs, but not to lost wages or living expenses. It's sometimes sold as an add-on to PIP or a less-expensive alternative to PIP. MedPay is mandatory in three states. In some states where both PIP and MedPay are optional, you may only be able to choose one or the other, not both.
Some states have exceptions
There are a few no-fault states where you can choose to limit your PIP coverage and rely on your health insurance. This is to lessen the cost of car insurance. In New Jersey, drivers have the option of selecting their health insurance as their primary provider for medical expenses. This means your health insurance would cover medical bills first, and PIP would only kick in if your care cost more than your health plan limits.
In Michigan, where unlimited PIP coverage contributes to very high auto insurance premiums, you can coordinate your health and car insurance policies to reduce your premiums. If you choose this option, your MI health insurance company would take care of your hospital and doctor bills, while PIP would cover lost wages and rehabilitation. But note that people with Medicaid and Medicare cannot do this.
Can you use health insurance if you don't have PIP or MedPay?
If you don't have PIP or MedPay, you can use your health insurance to pay for any medical bills resulting from a car accident. If you live in a tort state, you also have the option of filing a claim against the other driver's insurance to pay for medical expenses. But be aware that it can take a long time to sort out who was at fault. And you aren't guaranteed a payout.
It's best to forward copies of your car accident medical bills to your health insurance company as you receive them. If you do file a liability claim later to cover medical costs, you may need to reimburse your health insurance company for anything they paid. This is a process called subrogation, and it's common in health insurance. Subrogation allows your health insurance company to recover its losses if you get money elsewhere (for example, a liability claim or lawsuit) for your health expenses. However, even if you do not file a liability insurance claim, your health insurance provider has the option to do so.
Should you get PIP or MedPay if you have health insurance?
Since each serves a different purpose, you may want to consider adding PIP or MedPay to your car insurance coverage, even if you're not required to.
For one, PIP and MedPay can help pay your health insurance deductible if you turn to them after your PIP or MedPay runs out. PIP and MedPay will also cover funeral expenses, which health insurance does not. It's unpleasant to think about, but funerals are expensive. And it can add more financial stress to an already upsetting situation.
Additionally, PIP and MedPay provide coverage for your hurt passengers. If you drive often with family or friends, it may be good to have PIP or MedPay in case of an accident.
Next, PIP — but not MedPay — usually covers lost wages due to injuries. For example, if you break your leg in a car crash and work in construction, PIP will pay you what you would have otherwise earned, up to the limit defined by your policy. In New York State, for instance, standard PIP coverage provides 80% of your earnings, up to $2,000 per month, with a maximum payout of $50,000 total. Health insurance policies do not have this provision. But if you have short- and long-term disability insurance, you'd be covered.
Lastly, PIP and MedPay can provide peace of mind, knowing you have a second source of coverage if you face a potentially expensive injury. Medical bills can pile up after a car accident, and having an extra $50,000 worth of PIP or MedPay coverage can make a difference. You'll also have a backup if your health insurance denies your claim.
Why you might not need to add PIP or MedPay
Not everyone should add PIP, however. The decision is up to you. Ask yourself the following questions:
- How likely am I to get in a car accident that requires medical care?
- How generous is my health insurance plan?
- Could I afford the medical expenses of a car crash if my health insurance did not cover them?
- Is the additional expense worth the peace of mind?
PIP and MedPay provide a number of financial protections But remember, they only apply if you're in a car accident. If you have comprehensive health insurance and other insurance coverage — like disability or life insurance — adding PIP may be redundant. Otherwise, the peace of mind may be worth the extra expense.
Differences between health insurance, personal injury protection and medical payments coverage
Health insurance | PIP | MedPay | |
|---|---|---|---|
| Is there a deductible? | Usually yes | Sometimes | No |
| Funeral costs covered? | No | Yes | Yes |
| Lost wages covered? | No | Yes | No |
| Living expenses covered? | No | Yes | No |
| Who is eligible to make a claim? | Only people named on your policy | Anyone named on the policy or riding in the car | Anyone named on the policy or riding in the car |
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