Everyone has seen the ‘Medical Payments’ section on their Homeowner's or Auto policy, but what does it really mean? Does it cover my medical expenses if I get in a car crash? Does it mean that I only have coverage for X amount of dollars for other people's medical expenses? Does it cover my family's medical expenses?
Medical Payments in the Homeowner’s & General Liability Policies:
The Medical Payments (also referred to as 'Medical Expenses coverage') section of your Homeowner’s or General Liability policy is to cover the medical expenses of someone who is accidentally injured (In other words, they were injured without any negligence involved). The caveat with it is that Medical Payments coverage does not apply to you or your family getting hurt, because that should be covered by your health insurer. For businesses, the Medical Payments coverage would not apply to you or your employees, as that should be covered by Workers' Compensation.
The Medical Payments coverage comes into play when someone is hurt on your property yet there was no negligence on your part. In this situation, your insurer will pay the medical expenses required to fix up the injured person, hopefully keeping you out of court. This coverage can be substantial, as litigation can be very expensive, not to mention time consuming. However, if you had negligently hurt someone, your policy is going to pay for their medical expenses, and any litigation expenses that are incurred. Medical Payments is simply a tool to prevent you from going to court in the first place.
Here are two basic examples:
—Your guest trips over a rug, falls, fracturing their arm. It was completely accidental, but your insurer will pay up to your Medical Payments policy limit to fix them up in hopes of keeping you out of court.
—A pedestrian cuts through the corner of your yard and slips on a child’s toy. Once again, your insurer is going to pay up to the policy limits to fix that person up, and hopefully keep you out of the courtroom.
As you can see, this could play out a million different ways, but trying to establish blame in the courtroom is time consuming and costly for everyone involved. This small coverage can save you time in court, and can keep a small accident from becoming a multi-thousand dollar claim on your record.
Medical Payments in the Auto Policy:
The concept is almost reversed in auto insurance. Regardless of your negligence in an accident, your insurer is going to pay up to the Medical Payments limit for each person in the car. So when you're the driver and have an accident, it'll pay for the medical expenses of you and every passenger in the vehicle. This coverage also extends to when you are a passenger in someone else's car, or if you are hit by a vehicle while on-foot.
The Auto policy's version can be very beneficial to have if you are the passenger during an accident or hit as a pedestrian. This is especially so if the driver doesn't have Medical Payments coverage (or auto coverage at all!). Alternatively, the driver might have an Auto policy, but they might not have high enough limits to fully cover your injuries!