Will My Health Insurance or Auto Insurance Pay-Out in an at-Fault Accident?

Mar 4, 2021 | Personal Insurance

Being in an accident is frightening, both in physical, emotional, and financial terms. Causing one is even more so. You will be liable for the damages that you would make. What makes it worse is that you may not possibly be covered by your insurance. That’s why many drivers ask “Will my health insurance or auto-insurance pay in an at-fault accident?”

Thinking of being the one to pay your medical bills and car repairs without aid can give you heartache. Don’t worry! You will find your answers below. We will make things clear for you for a better understanding of health and auto insurance in Denver, Colorado or any other state for that matter. We will also give you tips on what coverages you should include in your auto policy.

What types of auto insurance cover the costs of my medical care after an accident?

Everyone is aware that there are many existing types of coverage that you may add to your policy. A basic policy mostly consists of liability for both bodily injury and property damage, collision and comprehensive, uninsured/underinsured, and personal injury protection. 

There are other options that you may purchase. Some of these are gap insurance for those who are leasing cars, and medical payments coverage. Some insurance companies may also introduce other options to you. Among these types of coverage, which are the ones that will cover me in case I caused an accident?

Personal Injury Protection (PIP)

This insurance pays for expenses used for medical concerns brought by an auto accident. It is known as no-fault insurance as well. PIP will pay without giving importance to whoever is at-fault. There are several rules that vary state by state regarding the purchase of personal injury protection.

One such rule is that there are thirteen states that require this coverage. See below if you live in such a place.

  • The District of Columbia
  • Florida
  • Hawaii
  • Kansas
  • Kentucky
  • Massachusetts
  • Michigan
  • Minnesota
  • New Jersey
  • New York
  • North Dakota
  • Pennsylvania
  • Utah

If you are from Denver, Colorado, then you may also purchase PIP. It is optional though. Before that, let’s talk about the possible situations that this coverage may pay for. There are many cases that might be paid for aside from medical expenses. 

Funeral costs

It’s a fact that auto accidents may cause death. Though many people survive such mishaps, we can’t deny that there are some who didn’t. Personal injury protection may also cover the funeral costs in case of fatalities. This includes funeral ceremonies, cremation fees, and burial.

Lost wages

Sustaining injuries from a car accident requires you to recover properly. In that case, you would not be able to go to work and do your job. That will make you lose the earnings that you should have received had it not been for the injuries. PIP may also cover lost income. Of course, you would have to prove that you will indeed suffer from such loss.

Survivors’ Loss

Dying is inevitable, and accidents increase the chances of it too. We will leave our family if the time comes. In case you perish, personal injury protection can pay for the expenses that your surviving family may need.

Necessary services

Injuries might make it hard for you to move around your house. Doing household chores may also hinder your recovery. If you can’t really do the things that you should do, then PIP may cover the expenses of some essential services. These include childcare and house cleaning.

Medical Payments Coverage (MedPay)

Like PIP, medical payments coverage or “med pay” covers the costs of medical expenses regardless of fault. That means even if you are the one who caused the accident, it will cover you. 

The best feature of med pay coverage is that it pays immediately for your expenses. It also pays for the medical bills of your passengers. This coverage is beneficial for those drivers who don’t have insurance for health.

Personal Injury Protection vs MedPay Coverage

In terms of similarities, both types of insurance pay for bills related to medical expenses. Which one is better? Personal injury protection comes out at the top. As you have read above, PIP covers a more comprehensive heap of expenses, which the med pay coverage does not.

Med pay doesn’t cover lost income and living expenses. It will also not cover childcare and the expenses of your family in case you encounter death. As the words “med pay” imply, this coverage only handles medical payments — nothing more, nothing less.

What is health insurance?

Every expense that is related to health concerns and medical care can be covered by health insurance. That includes medical bills related to accidents. This coverage is not mandatory anymore but many still purchase it. After all, your health is one of your greatest assets.

In a car accident, there are many kinds of scenarios mentioned above that are covered by the first two types of coverage. However, health insurance is different. Here are some reasons why health insurance is not any much better than the first two in case of an accident.

  • It doesn’t cover funeral costs. 
  • Lost wages can’t be reimbursed.
  • You will handle your living expenses and essential services.
  • The only ones covered are the people listed on your policy, not your passengers.

Will my health insurance or auto insurance payout in an at-fault accident?

We’re down to the big question! Many of you ask about which of the two will pay in case you cause an accident. Is it the coverage for health? Or is it the other one? In some cases, health insurance will only pay when your policy limits for auto insurance are exhausted already. 

For example, your policy limits for PIP is 15,000 dollars. If the amount for medical care needs 20,000 dollars, then it will kick in. For a more detailed explanation, let us find that out below.

Health insurance vs PIP and MedPay

Here’s a situation. You are driving your car using your phone (don’t do this while you are on the road). When you are nearing an intersection, you didn’t pay attention to the traffic light that is flashing red already. BOOM! You collided with another car. Now, it’s time to settle the problem.

Most states require a minimum amount of coverage for liability. Driving while having no insurance is illegal. You may face legal and financial consequences if you are caught. Let’s presume that you are insured with a basic policy of liability, collision, comprehensive, and other options.

Your auto liability property damage insurance will pay for the other driver’s car repairs. On the other hand, sustained injuries of the other driver are paid for by your bodily injury liability. Collision insurance pays for the repairs of your car regardless of fault. So let’s count the repairs of your car as solved. The only problem left is the coverage for your bodily injuries.

If you have personal injury protection and medical payments coverage

If you have both PIP and MedPay as well as insurance for health, then you may want to use the first two options first. In general, PIP and MedPay don’t require deductibles which health insurance does. Deductibles are a set amount of money in dollars that you’d pay for your coverage to kick in.

Let’s say that the costs of the medical bills don’t exceed your policy limits for personal injury protection or med pay. That means you would have to pay nothing at all. For example, your policy limits amount to 20,000 dollars. If your bills cost 5000 dollars, then it is within the cap. Remember that it doesn’t need a deductible. You won’t have any out-of-pocket expenses.

On the other hand, health coverage needs you to pay the deductible first. If you make a claim to your health insurance company, then you will have to pay a certain amount out-of-pocket. The money that you will receive might be the same as what you can get from PIP or med pay. Comparing the two, the first option is apparently better.

If you only have insurance for health

You may file a claim to your health insurance company if you don’t have PIP or med pay. They may reimburse you for the medical expenses that you will pay due to an auto accident. When you receive your bills, sending a copy to your insurer will be a good move. Take note that you may face rejection though.

If you have both

If you have both types of insurance, then choosing the first option is still better. Most health insurance companies have a “subrogation clause” in the policies that they offer. It means that in case an insurance company owes you money regarding medical expenses, they are entitled to that money.

For instance, you filed a claim first on your health insurer before your auto insurer. The health insurer paid for your medical expenses. The next day, you made a claim on your auto insurance company. What you are supposed to receive will be given to your health insurer under the subrogation clause. That’s because they will want to recoup their losses in covering you.

Is it possible for my health insurance to deny my claim?

There is a chance that your health insurance provider will deny your claim if you are at-fault for an accident. The reason lies in your auto policy. If you have included personal injury protection and medical payments coverage, then your health insurer may deny your claim. 

In fact, they can also disqualify you for your medical claims. Below are some ways that they may use to do so.

  • They will request the medical records of the policyholder about any previous illnesses or medical concerns. They will have to assess if the medical concerns you included in your claim is an old or new one.
  • You will be asked to meet with a physician assigned by the insurance company. Records won’t be enough. They will, of course, request that you are tested by their trusted personnel.

What are some reasons why I should get PIP or MedPay?

If you have health insurance, then you may not find the need to get PIP and MedPay. Since insurance for auto and health alone is quite expensive, you may reject the idea of adding more payments to make. However, here are some reasons why you should get the said coverages.

The deductible for health insurance

We have said before that deductibles are out-of-pocket expenses that you need to pay before you can get reimbursed. Yet in the instance of an auto accident, paying a deductible might be hard for you. PIP and MedPay can help in paying that deductible you need for your health insurance.

For instance, you know that your PIP and MedPay can’t handle the costs alone and you will have to use your health insurance. Instead of fully exhausting them, you may use the remaining to pay the deductible for your insurance for health. This way, you won’t have to pay a single cent.

Funeral costs

We have talked at least three times about the funeral expenses that PIP and MedPay will handle in case of death. Undoubtedly, they are expensive. With the possible costs that your remaining family will pay for when you pass away, getting both of them is a considerable idea. We hope that you would not meet any mishaps that can result in that though.

Peace of mind

You can never predict when an accident would happen, and how large the impact will be. Having a backup in these times will absolutely be helpful. Since the medical bills may amount to a frightening sum, having extra insurance may change the game. In that case, you can recover peacefully without worrying much.

What coverages should I include in my auto policy other than the minimum requirements?

As promised from the start, we will recommend some tips about the coverages that you should purchase aside from the options mentioned above. Below are the options that you may buy as well to get more complete financial and legal protection in case of an at-fault accident.

A full-coverage insurance

Upon getting insured, you may have already heard of a term called full coverage. To tell you the truth, there’s actually no such thing. Yet why do most people prefer to call it that way? Here’s a rundown.

Liability coverage

We have talked before that liability insurance pays for the other parties’ damages if you are the one at fault. It can be further classified into two: bodily injury and property damage. Just the words themselves define them, right? If you caused an accident, then this will pay for their expenses.

Collision insurance

The word is itself. Collision insurance pays for the car repairs after a collision. This one is recommended especially if you are at fault. Imagine worrying about your medical expenses. Adding the worry for car repairs may make your head really hurt.

Comprehensive coverage

Comprehensive means “complete” or “almost complete”. In insurance terms, comprehensive coverage covers a lot of situations that damage your car. For example, your car is stolen, a victim of vandalism, a tree fell on it, and many others.

Remember to weigh if it is worth it to carry on your car though. If the car is old enough, then getting it might just make you lose money.

Uninsured/underinsured motorist insurance

Since you can cause an accident, it means that others can too. Although it is illegal to drive uninsured, many still brave their way on the road. Some drivers may have a minimum amount of it but it is insufficient to pay for all the damages. This coverage protects you from drivers like that.

Gap insurance

Guaranteed asset protection or “gap” insurance pays for the balance that you still owe your lender. If you are leasing a car and you caused an accident causing it to be totaled, then this one is perfect for you. Total loss happens when the car repairs exceed the cost of the car.

For example, you collided with another car due to distracted driving. The car is totaled. Typically, your reimbursement from collision insurance will go to your lender. Supposed that the amount you received is 20,000 dollars. After paying the lender, you still owe 5,000 dollars. Gap insurance will pay that amount.

This will lessen your worries regarding your debt. You can rest and recover properly without thinking of how to come up with the money to pay your loan.

Final Say

Any type of insurance is a worthwhile investment. However, we can’t deny that the financial situation of many drivers varies. In terms of determining which type of insurance best suits your budget, choosing the one that will benefit you more is recommended.

Health insurance and auto insurance have a common ground, and that is medical expenses. Understanding which one you should turn to first makes you a wiser decision-maker. Both will indeed pay for your bills, but knowing their boundaries is a must.

For more questions and concerns, call us today. The Advantage Insurance Solutions team can give you the answers that will satisfy you. Get a quote now and be free of worries while enjoying your ride!