What is the Difference Between Bodily Injury and Medical Payments?
Auto insurance covers more than just your car. In fact, the only type of car insurance that is required by law is liability insurance, which does not cover your car at all. Liability coverage is there to pay for damages you are responsible for, up to the limit of the policy. Those damages fall into two categories, property damage and bodily injury.
Property damage is pretty straightforward. Any damage to another person’s property, such as their vehicle, that you are responsible for will be covered under the property damage coverage of your policy, up to the limit of liability you’ve chosen.
Bodily injury is the same thing, but applies to the injuries another person suffers in a wreck that you’re at fault for. This means hospital and doctor bill, ambulance rides, any tests or diagnostics required, surgery, physical therapy, and even lost earnings and pain and suffering as a result of the injury. Your policy will pay for these costs up to the limits of liability of your policy.
Another coverage that is available on most auto policies is medical payments coverage.
What is Medical Payments Coverage?
Medical Payments Coverage, also known as med pay, is protection for the occupants of your vehicle in the event of an accident, regardless of whose fault it is. That means you, your family, and any other passengers. Med pay is a per-person coverage, so for example, if you purchase $1000 in coverage, each person in your car is eligible for up to $1000 to go toward their medical costs in the event of an accident. If you purchase a higher amount, each person is eligible for up to that amount. You can usually buy as much as $25,000 per person, although it depends on the company.
The key difference between these two is that bodily injury coverage pays others that you injure, while medical payments are made to you. The law only requires you to protect others, not yourself, which is why a minimum amount of liability insurance is required by law and med pay is totally optional.
Now, if you’ve ever been in a wreck that was not your fault, or know someone who has, you’re probably thinking, “Shouldn’t the other person’s insurance pay me if I’m injured? What do I need to pay for this extra coverage for? That doesn’t seem fair.”
It doesn’t seem very fair that if you are hurt in an accident that someone else is to blame you, you might still end up paying for some of the costs. The reality is that the minimum required limits of liability insurance is often just not enough if someone is actually injured. In South Carolina, the minimum required amount is $25,000 per person, $50,000 total.
That means that in a wreck where two people are hurt, both would be able to get up to $25,000. But what if there are three people? Or multiple vehicles. That $50,000 limit does not change just because more people are involved. Even if only one person is hurt, $25,000 is often not enough to pay for all the associated medical costs and lost wages. You can’t control who hits you in an accident, and if they have the minimum limits, or no insurance at all, you have to hope that they have the personal assets to cover your losses. This is rare. Even if you sue someone and win, collecting on that settlement is often very hard.
Having med pay on your policy provides an additional buffer to you, regardless of who is at fault in the accident.
Of course, that also means if the accident is your fault, and you are hurt in it, it will still be available as well to cover your costs. Even if you end up using your own health insurance to pay for your care, the medical payments could help you meet your deductible and other associated copays and out of pocket costs.
The best thing about med pay is that it is usually pretty inexpensive to add to your auto insurance policy.
What About Uninsured Motorist Coverage?
So back to the hypothetical situation where an uninsured driver hits you and you’re injured. In South Carolina, the law requires you to carry a minimum of 25/50/25 in uninsured motorist coverage. This is coverage that will protect you if you’re in an accident with someone who is uninsured. You can purchase much more of course, but the minimum is $25,000 per person in bodily injury (to you), $50,000 total bodily injury (to you) and $25,000 property damage (to your property). This only applies if the person who hit you is at fault and uninsured.
What if they are insured, but only have the minimum required liability insurance, and your medical bills are more than $25,000?
In that case, there are many different outcomes possible depending on your policy. If you have med pay, that would be an option available to you, up to the amount of coverage you bought. Another option is to try to sue the other driver for damages and hope they have assets to cover it. This is expensive, difficult, and slow, and if you’re already trying to recover from your injuries, will be even harder. There is also Underinsured motorist coverage.
Underinsured motorist coverage is a totally optional coverage that you can add to your auto policy to protect you above the limits of liability that the at-fault driver had on their policy. It is designed to protect you, not other drivers, and only covers accidents where the other driver is at fault and your damages exceed their limits of liability.
So, Should I Add Med Pay? What About Underinsured Motorist Coverage?
It’s worth asking your agent about and seeing what it would cost to add these coverages. Med pay is a relatively small increase to your premium but the limits available are lower. Underinsured coverage costs more in premium, but you can buy limits up to the same amount of liability insurance that you carry on your policy, giving you much, much more protection from the unpredictable.
We know that insurance can get complicated, and trying to figure it out all on your own can be overwhelming and lead to gaps in coverage. The good news is that for no extra cost to you, you can talk to a local, independent agent who will go over your policy with you, answer your questions, and advise you about what coverage is right for you.