3. Medical payments vs. excess medical payments
Medical payments coverage pays for medical expenses if you or your passengers are injured in a collision, no matter who's at fault. Christopher says it's best seen as a supplement to your primary health insurance, as the coverage limits are usually low, such as $2,000 or $5,000. Rather than paying for all your potential care after an accident, he says, it's a way to offset a high deductible or the cost of co-insurance in your primary health plan. (If you have a low- or no-deductible health plan that doesn't charge co-insurance, on the other hand, medical coverage on an auto policy may not be useful.)
Christopher highlights another benefit: If you're injured in a crash, medical coverage pays out immediately, without waiting for any determination about who was at fault: "If you have an ambulance take you to the hospital and it's $100, we cut a check that day." That's as opposed to the other driver's bodily injury coverage, which may eventually pay for your medical care after a determination of fault has been made—which can take months and may end up in court. Even more impressively, he says, the coverage covers you as a passenger in other cars and as a pedestrian if you're hit by a car. (If you do recover damages from the other driver or their insurance, you may have to reimburse your insurer for the original payment.)
Excess medical payments coverage is a similar, cheaper alternative that differs in one important way: If you receive care outside of your primary health plan, such as from an out-of-network emergency room, it doesn't pay out until you've spent $2,000 out of pocket. (If your care is in-network, it works just like standard medical payments coverage.) For example, if an out-of-network ambulance takes you to the hospital and it costs $100, standard medical payments coverage will pay for it, but excess medical payments coverage won't. Another example: On a $3,000 out-of-network bill, medical payments coverage at the $5,000 limit would pay the entire bill, whereas excess medical payments coverage at the same limit would only pay for $1,000.