Understanding Your Auto Insurance: 4 Things You Need To Know About Medical Coverage

When most people think about auto insurance, they think about replacing their car or paying for damage caused to another motorists car. However, the largest part of an insurance policy has nothing to do with physical damage, it has to do with personal injury and medical bills. The average for a disabling injury hovers around $60,000 for each person. If someone dies, it could cost $1 million or more. For this reason, your medical coverage is a very important part of your insurance policy. Following are four things you need to know about medical coverage. 

There Are Two Types of Medical Coverage

There are two different types of auto insurance medical coverage: Med Pay and PIP, or personal injury protection. Med Pay is a basic insurance policy that will cover medical expenses incurred as a result of an accident. There usually isn't any deductible, but the benefits are limited. PIP coverage offers more coverage than Med Pay, making it the most popular form of medical coverage. PIP also covers lost wages and death benefits, whereas Med Pay does not. 

The Type of Coverage You Need Depends on Where You Live

The type of medical coverage you need will depend primarily on where you live. The majority of states require PIP coverage. However, a couple of states require Med Pay coverage, including Maine and New Hampshire. Although you will have to check the specific laws in your state, you will likely need PIP coverage if you live in a no-fault state. If you live in a tort state, you may be required to have one or the other. You may also choose to have both. 

The Minimum Requirements Vary by State

The minimum medical coverage required by states varied widely. For example, Florida requires $10,000 per person, whereas New York requires $50,000 per person plus coverage for funeral costs and lost income. You will always have to purchase the minimum amount of insurance for your state. However, you should keep in mind that the medical bills could end up being much higher than your insurance will cover. 

You Can Still Be Sued for Costs not Covered

If your insurance does not cover all of the costs associated with an accident, you can be held liable for the costs. For this reason, you may want to seriously think about purchasing more than the bare minimum. 

Insurance requirements vary from state to state. To see what laws apply to you, talk to your local insurance broker, like Affordable Insurance.