Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insurance...

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UPDATED: Jul 14, 2021

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If your state requires med pay, which is short for medical payments, to be on your insurance, you’ll be able to find that information on your state’s department of insurance website. Not all states have this requirement, but if yours does, it helps to know before shopping for auto insurance.

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There are so many different parts to a car insurance policy that it can be confusing. Some parts are required by the government while others are not. Not all states require the same parts, which can confuse things even more.

Parts of Car Insurance Policy

The most important part of car insurance is liability. This is broken down into two parts: bodily injury liability and property liability. Liability is the part required by all the states. It pays for medical expenses for the people in the other car if you cause a wreck. The property liability insurance coverage pays for car repairs or replacement due to the accident.

Even though the states require this coverage, there are many drivers who ignore the law and drive without auto insurance.

If an uninsured motorist hits you, it’s very hard to get them to pay for your damages. That’s where uninsured motorist coverage comes in. It also helps pay for your costs if someone hits you that does not have adequate coverage, called being underinsured. Many states also require this coverage.

However, neither of these covers the damages to your car if you are the at-fault party in an accident. Collision is the part of the policy that pays for the repair or replacement of your vehicle in this circumstance. If your car is stolen or is damaged in some way besides a traffic accident, then comprehensive coverage pays for it. Comp and collision is not required by any state, but is required by the bank if you have a car loan.

Another part of a car insurance policy is the medical coverage for you and the people in your car. This can be either medical payments, called med pay, or personal injury protection, called PIP. Most insurance companies also offer other optional riders to a policy, like towing and rental reimbursement. For more information on the structure of auto insurance, see the National Association of Insurance Commissioners’ Guide to Auto Insurance.

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The Difference between Med Pay and PIP

Some states require that drivers carry some sort of medical coverage on their auto insurance policy. Some states require med pay, others PIP, and some will let you choose between the two. In states where neither is required, it is still an option that you can add to your policy.

But what’s the difference? Med pay only pays for medical bills. If you are in an accident, no matter whose at-fault, that policy will pay for your ER, hospital, and doctors bills as well as those for your passengers. If the med pay policy you have is for $5,000, then it will pay up to $5,000 worth of medical expenses that your health insurance won’t. In other words, med pay kicks in after health insurance.

PIP, or personal injury protection, is a little more encompassing. It also pays for your medical expenses, as well as those of your passengers, but it pays for other things as well. It pays for wages you lose while recovering from the accident, housekeeping or yard care if you can’t do those, and even funeral expenses if needed. The Rocky Mountain Insurance Information Association has more information on how medical bills are paid after an accident on their website.

PIP versus Med Pay

Before determining this, you need to know what your state requires. You can go to your state’s department of insurance website to find out. Additionally, you can type “state requirements car insurance” into your search engine, just use your state name in place of “state.” This will lead you to the exact requirements you’ll need to fulfill.

In most states, if they require med pay, you can choose PIP instead, as it provides for more protection that med pay. The reverse is not usually true.

Most experts recommend choosing PIP over med pay if you have the choice because it covers more for only a small difference in premiums. A med pay policy also requires that you pay them back what they spent on your medical expenses if you are later reimbursed by the other driver’s liability coverage.

If you aren’t required to carry either in your state, most experts recommend that you not pay for med pay unless your health insurance has a very high deductible.

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