A Great Article by David Thompson
When I think of “med-pay” coverage I immediately think of the small amount of money spent to make life easier, and often compare the cost to what I might spend for lunch at the nearest Sonny’s BBQ restaurant. For about $6.00 I can get a good lunch and leave the server a 20% tip. That $6.00 is about what it costs for six months of med-pay coverage on one car in the Tallahassee area. Sure, in some of the other larger cities in Florida you’ll spend a bit more than “lunch money” for med-pay coverage, but the cost for this valuable coverage is still minimal. So too is the cost to increase the limits from the typical $5,000 limit. For example, I recently increased the $5,000 limit to $50,000 and the cost was about $13 for six months coverage on two cars in my household. A few months later I increased the med-pay coverage to the $100,000 maximum limit offered by my company. (While ISO rules allow it, not all companies write those limits.) By that time our daughter had obtained a car and I was shocked to learn that the additional premium for the additional $50,000 of med-pay on all three cars for six months was just $6.00. Comparing the cost for med-pay on three cars at a $5,000 limit to a $100,000 limit I learned that the six-month premium increase is less than our family of three would spend for Sunday dinner. While I hope to never use the coverage, I do have peace of mind knowing that I have a significant amount of med-pay (plus additional PIP too) should I ever need it.
Med-pay provides coverage that fills gaps left by Florida’s PIP coverage. Below you’ll find my “Top 10 List” of reasons to carry med-pay.
- 1. The 20% co-pay not covered by PIP is covered by med-pay.
- 2. Med-pay responds as a pedestrian out of state, while PIP does not.
- 3. Someone injured in a rental car or other non-owned auto out of state gets no PIP but med-pay responds.
- 4. A pedestrian struck by a city bus gets med-pay, but no PIP.
- 5. An occupant of a city bus gets med-pay but no PIP.
- 6. A pedestrian struck by a motorcycle gets med-pay but no PIP.
- 7. Med-pay responds for medical bills at 100% after PIP is exhausted.
- 8. Funeral benefits are provided by med-pay but not PIP.
- 9. Other passengers in your auto can get your med-pay, but they can’t always get your PIP.
- 10. Med-pay is generally cheaper than lunch at Sonny’s BBQ.
These reasons don’t even consider the aggravation saved by not having to fill out claim forms for a health policy, submit them for payment, wait for an “explanation of benefits” to come back, and then deal with the “reasonable and customary” limitations of that health policy. If PIP and med-pay are on the auto policy, medical bills should be paid up to the policy limits without involvement of the health insurance policy.
So there you have it – ten good reasons to suggest auto med-pay to your clients, and ten reasons to carry increased limits on your own policy.
This article contains copyrighted information of the Florida Association of Insurance Agents and is used with permission. Please call J.E.B. Insurance Services, LLC at (888) 225-2258 if you have any further questions about this article. FAIA is not staffed to take consumer calls.
