Med-Pay “P.I.P” Coverage In Auto Insurance

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Leesbro63
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Med-Pay “P.I.P” Coverage In Auto Insurance

Post by Leesbro63 » Tue Jan 14, 2020 7:33 am

A family member moved to Las Vegas last spring and purchased a new car there. He also decided to get the “really good” car insurance through Chubb. Unfortunately, he became involved in an accident and was taken to the emergency room. The good news is that he’s fine. Recently, he got a notice from Chubb that his $19,000 E.R. bill (lots of tests, etc) maxed out his $10,000 med-pay/Personal Injury Protection (“PIP”) coverage. He hasn’t heard from the hospital yet. We assume they’ll bill his good Blue Cross health insurance for the balance and he probably won’t have exposure to getting a big bill.

The issue is this: I’ve always carried $100,000 of med-pay, even though I have good health insurance. Just to avoid a situation like this where there could be two insurers arguing or there could be some sort of coverage gap. Costs me $50 a year to go from $10,000 to $100,000 of med-pay coverage. Technically I guess I have double coverage, up to $100,000, although I understand that I cannot double dip should a claim arise. Auto med-pay will be primary, saving my health insurance $90,000 (versus if I only had $10,000 med pay). My relative told his agent that he wanted “the good coverage”. I reviewed his policy and we both missed that there was only $10,000 of med pay. So now that the horse is out of the barn, he questioned the agent about this and the agent said he’s never heard of anyone buying more than $10,000 of med pay. And that the usual coverage is $5000 but by bumping my relative up to $10,000, that WAS the “good coverage”. And that writing $100,000 is not so simple and he’s have to “look into if this is even possible”. This just happened yesterday so we haven’t heard back yet.

Is there perhaps a $10,000 sales limit on med pay in Nevada? I doubt it and we think the agent is either out to lunch or is blowing smoke. Any input on this situation would be appreciated.

talzara
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Re: Med-Pay “P.I.P” Coverage In Auto Insurance

Post by talzara » Tue Jan 14, 2020 11:57 am

Leesbro63 wrote:
Tue Jan 14, 2020 7:33 am
Is there perhaps a $10,000 sales limit on med pay in Nevada? I doubt it and we think the agent is either out to lunch or is blowing smoke. Any input on this situation would be appreciated.
Personal Injury Protection is no-fault insurance. Med-pay is a limited form of PIP that only pays for medical expenses. PIP is subject to a great deal of adverse selection, since it pays out even when you are at-fault.

Your family member lives in Nevada, which is a tort state. In those states, high-limit PIP will quickly go into a death spiral. Only the worst drivers will buy PIP, which drives up the price, causing even more good drivers to drop out. It is possible for insurers to offer PIP only with low limits, which reduces the premium enough that PIP becomes just a convenience feature.

You live in Pennsylvania, which is a partial no-fault state. Pennsylvania requires all insurance companies to offer $100k of PIP, although you can opt out. Since no-fault coverage involves giving up your right to sue in a no-fault state, the adverse selection works the other way. The most litigious drivers go into the tort system, so no-fault coverage costs less than tort coverage.

Since Chubb sells high-value insurance, they might offer high-limit PIP even in a tort state. However, the agent's response indicates that Chubb does not.

Topic Author
Leesbro63
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Re: Med-Pay “P.I.P” Coverage In Auto Insurance

Post by Leesbro63 » Tue Jan 14, 2020 5:39 pm

Talzara, that was a very informative reply. Thank you. I'm curious how much coverage other Bogleheads have, in different states.n

Jablean
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Re: Med-Pay “P.I.P” Coverage In Auto Insurance

Post by Jablean » Wed Jan 15, 2020 6:00 pm

Worked for a car insurance company. Multiple states, Oklahoma, Nevada, Montana, Wisconsin and a few others. MedPay started at $1000. I got as high as they offered which still is $5,000.

I think most people have no idea what the different parts of car insurance mean and think if it covers meds for somebody else it's the same coverage for the owner. After reading claims I think I'd always hire a lawyer too.

PluckyDucky
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Re: Med-Pay “P.I.P” Coverage In Auto Insurance

Post by PluckyDucky » Wed Jan 15, 2020 11:16 pm

Jablean wrote:
Wed Jan 15, 2020 6:00 pm
Worked for a car insurance company. Multiple states, Oklahoma, Nevada, Montana, Wisconsin and a few others. MedPay started at $1000. I got as high as they offered which still is $5,000.

I think most people have no idea what the different parts of car insurance mean and think if it covers meds for somebody else it's the same coverage for the owner. After reading claims I think I'd always hire a lawyer too.
It's possible to get higher limits but it's not standard. It's like secret sauce you have to ask for.

I have $100k medpay in Oklahoma.

Jablean
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Re: Med-Pay “P.I.P” Coverage In Auto Insurance

Post by Jablean » Thu Jan 16, 2020 5:22 am

PluckyDucky wrote:
Wed Jan 15, 2020 11:16 pm
Jablean wrote:
Wed Jan 15, 2020 6:00 pm
Worked for a car insurance company. Multiple states, Oklahoma, Nevada, Montana, Wisconsin and a few others. MedPay started at $1000. I got as high as they offered which still is $5,000.

I think most people have no idea what the different parts of car insurance mean and think if it covers meds for somebody else it's the same coverage for the owner. After reading claims I think I'd always hire a lawyer too.
It's possible to get higher limits but it's not standard. It's like secret sauce you have to ask for.

I have $100k medpay in Oklahoma.
I worked on the IT side - we didn't have the ability to offer 100k, it wasn't an option that we coded- now it's possible we had $10,000 in OK as things were state specific and things have changed in the 5-6 years since I was there.

motorcyclesarecool
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Re: Med-Pay “P.I.P” Coverage In Auto Insurance

Post by motorcyclesarecool » Thu Jan 16, 2020 5:37 am

post deleted. Erroneous information.
Last edited by motorcyclesarecool on Thu Jan 16, 2020 10:57 pm, edited 1 time in total.
Understand that choosing an HDHP is very much a "red pill" approach. Most would rather pay higher premiums for a $20 copay per visit. They will think you weird for choosing an HSA.

PluckyDucky
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Re: Med-Pay “P.I.P” Coverage In Auto Insurance

Post by PluckyDucky » Thu Jan 16, 2020 9:36 am

Jablean wrote:
Thu Jan 16, 2020 5:22 am
I worked on the IT side - we didn't have the ability to offer 100k, it wasn't an option that we coded- now it's possible we had $10,000 in OK as things were state specific and things have changed in the 5-6 years since I was there.
The standard liability/UM limits are 250/500, but I'm above that too.

Image

PluckyDucky
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Re: Med-Pay “P.I.P” Coverage In Auto Insurance

Post by PluckyDucky » Thu Jan 16, 2020 9:37 am

motorcyclesarecool wrote:
Thu Jan 16, 2020 5:37 am
I no longer possess the policy, but I was able to opt for million dollar medical payments coverage on my motorcycle through Progressive back in 2010-2011. Separate from my auto policy. Cost was not bad as I recall.

I sold my motorcycle about the time I added dependents. Maybe once they’re through college, I’ll get one again.
I'm going to ask about that. That's crazy high. In Oklahoma, medpay is not subrogable, so you can get a double recovery on medpay/UM even from the same carrier.

GlacierRunner
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Re: Med-Pay “P.I.P” Coverage In Auto Insurance

Post by GlacierRunner » Thu Jan 16, 2020 9:50 am

I carry $5,000 MedPay. My intention has always been that this would be for my passengers and that is the amount in my area for transporting students per the school district. I would say that $10,000 medpay is good insurance. $1,000 seems standard here.

Rwsawbones
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Re: Med-Pay “P.I.P” Coverage In Auto Insurance

Post by Rwsawbones » Thu Jan 16, 2020 9:07 pm

Large auto accident medical bills can have very unfortunate financial effects. Commercial health insurers and medicare will pay for medical care needed as a result of an auto accident but then recover as much of the amount paid as possible due to a tort settlement or judgment. I have seen cases of patients whose medical bills were in the six figures but the negligent driver had only $100,000: of coverage. The attorney got his payment with the rest taken by the health insurer leaving nothing for the negligently injured patient. In Massachusetts (and I suspect many other states) Med-Pay from one’s auto insurer does not subrogate. So if the medical cost of say $90,000 is paid by one’s own insurer and a settlement of $100,000 is reached and the attorney receives $30,000 the injured person is left with $70,000 not zero.

motorcyclesarecool
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Re: Med-Pay “P.I.P” Coverage In Auto Insurance

Post by motorcyclesarecool » Thu Jan 16, 2020 10:56 pm

motorcyclesarecool wrote:
Thu Jan 16, 2020 5:37 am
I no longer possess the policy, but I was able to opt for million dollar medical payments coverage on my motorcycle through Progressive back in 2010-2011. Separate from my auto policy. Cost was not bad as I recall.

I sold my motorcycle about the time I added dependents. Maybe once they’re through college, I’ll get one again.
I just did a pro forma quote with Progressive and the maximum coverage was $25,000. I must be taking crazy pills. My bad.
Understand that choosing an HDHP is very much a "red pill" approach. Most would rather pay higher premiums for a $20 copay per visit. They will think you weird for choosing an HSA.

Marylander1
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Location: Baltimore & DC

Re: Med-Pay “P.I.P” Coverage In Auto Insurance

Post by Marylander1 » Thu Jan 16, 2020 11:26 pm

GlacierRunner wrote:
Thu Jan 16, 2020 9:50 am
I carry $5,000 MedPay. ... $1,000 seems standard here.
I think if you go to an American emergency room and get a tissue to blow your nose, the cost is about $1,000.

Marylander1

GlacierRunner
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Re: Med-Pay “P.I.P” Coverage In Auto Insurance

Post by GlacierRunner » Thu Jan 16, 2020 11:40 pm

Marylander1 wrote:
Thu Jan 16, 2020 11:26 pm
GlacierRunner wrote:
Thu Jan 16, 2020 9:50 am
I carry $5,000 MedPay. ... $1,000 seems standard here.
I think if you go to an American emergency room and get a tissue to blow your nose, the cost is about $1,000.

Marylander1
I agree. I always assumed that the school district $5k requirement might have something to do with district risk management deductibles. I have also been surprised at the number of people who backed out of carpooling for day camp/sports/clubs due to not having the $5k requirement. That's why I think $1k is standard issue.

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