Medical payments coverage (med-pay)

Med-pay is a small, optional piece of an auto policy that can matter a lot in the months after a crash, while the liability claim is still open and bills are coming in. It pays regardless of fault, and it pays fast.

It is general information, not legal advice.

What it is

Medical payments coverage — "med-pay" — is a first-party benefit you can add to a California auto policy. It pays the reasonable and necessary medical and, in some policies, funeral expenses from a motor-vehicle crash, up to the coverage limit, no matter who caused the crash. It typically covers the named insured, resident family members, and passengers in the covered vehicle, and it often follows an insured person as a pedestrian or a passenger in someone else's car.

California does not require med-pay. It is not the same as personal injury protection (PIP), which California does not use. You have it only if you chose it, and the limit is usually modest compared with the cost of a serious injury.

Why it is useful

• It pays now. The at-fault driver's insurer will not pay your medical bills as you go; it pays once, at settlement. Med-pay fills that gap.
• No fault fight. You do not have to prove the other driver was at fault to collect med-pay. A disputed-liability crash does not stall it.
• It helps with providers. A provider who might otherwise put a lien on your case or send you to collections can be paid from med-pay.
• It can cover co-pays and deductibles that health insurance leaves you.

Stacking

If your household has more than one vehicle with med-pay on separate policies, or separate coverages, the limits can sometimes be combined — "stacked" — for one person's injuries. Whether stacking is available depends on the policy language. It is worth checking when the bills exceed one vehicle's limit.

Reimbursement: does the insurer get it back?

This is where med-pay gets complicated. Many med-pay provisions include a reimbursement or subrogation clause: if you later recover from the at-fault party for the same medical bills, your insurer can claim that money back out of the settlement.

• The policy language controls whether a right exists at all and how it is calculated.
• The make-whole rule can limit or defeat reimbursement when the settlement did not fully compensate you — for example because the at-fault policy was too small.
• A common-fund reduction can require the insurer to bear a share of the attorney fee and costs that produced the recovery.
• It is negotiable. Med-pay reimbursement claims are routinely reduced, especially in a limited-coverage case.

Health-plan and government-payer reimbursement work differently and are covered separately: health insurance liens · Medi-Cal and Medicare liens.

What to do

• Pull your declarations page and check for a med-pay limit.
• Open the med-pay claim early and submit bills as they come.
• Coordinate med-pay with health insurance so the same bill is not double-submitted, and so the smaller pot is used where it helps most.
• Keep track of what med-pay paid — it will come up at settlement.

Common questions

What is med-pay?

An optional add-on to a California auto policy that pays reasonable medical bills from a crash up to its limit, regardless of who was at fault. It covers you, your household family members, and passengers in your car.

Do I have med-pay?

It is optional in California, so you have it only if you bought it. Check the declarations page of your auto policy for a "MedPay" or "Medical Payments" line and a limit.

Does using med-pay raise my rates or count against me?

Med-pay is no-fault first-party coverage. Using it after a crash you did not cause should not be treated as an at-fault claim, though you should confirm with your own insurer.

Does my insurer take the med-pay back out of my settlement?

Often, yes. Many med-pay provisions give the insurer a right to be reimbursed from a third-party recovery for the same bills. Whether and how much is owed depends on the policy language and on doctrines like the make-whole rule, and it is usually negotiable.