PIP vs MEDPAY: Make the Right Choice for You
In obtaining auto insurance, the consumer has the option to purchase coverage over and above liability and collision. There are two options that cover your medical bills if you’re in an accident, even if the accident is your fault. These coverages are called Personal Injury Protection (PIP) and Medical Payments Coverage (MedPay).
PIP and MEDPAY usually come in increments of $2,500.00 and are relatively inexpensive ways to protect yourself in the event of a crash. In addition to medical bills, PIP also covers a portion of your lost wages up to the limit of your coverage. For instance, if you are in an accident and seek medical treatment for injuries, your own carrier will pay you or your healthcare provider up to the limit of your coverage ($2,500.00, $5,000.00, etc…) whether it is PIP or MEDPAY. However, there is one important distinction between PIP and MEDPAY. Your auto carrier has no rights of subrogation for PIP payments made, but it does for MEDPAY payments made.
For example, if you are in an accident and make a claim against another driver for your injuries, PIP and MEDPAY will pay you for your medical bills up to the limit of your coverage. But, if you recover from the other driver’s insurance company, your insurance company will seek reimbursement from the settlement of any MEDPAY benefits that were paid to you. If you have PIP instead of MEDPAY, your insurance carrier will NOT be entitled to seek reimbursement from the settlement. In short, PIP is a much better coverage because it provides broader coverage (medical and some lost wages) than MEDPAY, and because PIP payments made to you or on your behalf are not subject to subrogation.
