by Timothy A. Shollenberger, Esq.

This is the fifth in a series of articles designed to better inform you about the purchase of automobile insurance so that you can make the choices that are best for you. This article is not intended as a substitute for the advice of your insurance agent.

First Party Medical Benefits - What are they? How much do I need?

Suppose you are driving down the road and a drunk driver crosses the center line and hits your car. You are injured. You go to the emergency room and are told to follow up with your doctor, who then refers you for physical therapy and to a specialist. He also orders x-rays and an MRI. You own the car you are driving with “Gotta Have It” Insurance Company.

After the initial shock of the wreck, you wonder who is going to pay your medical bills. Is it the drunk driver's insurance, your own health insurance or your own car insurance? Which policy pays first? This all too common example can present a real problem if you do not have the proper protection on your car insurance policy.

Under the Pennsylvania Motor Vehicle Insurance Law, your own insurance company pays your medical bills, even if the other driver causes the wreck. Such benefits are often called “no fault” benefits because they are paid regardless of who is at fault for the collision.

Like so many other aspects of your car insurance policy , it is up to YOU to decide how much medical coverage to buy. You must buy at least $5000 but you can buy as much as $1.1 million.

These are some key considerations when deciding how much medical coverage to buy on your car insurance policy:

1. Do I have private medical coverage? This is important because, once your car medical coverage limit is used up, your private medical insurance takes over EVEN IF THE OTHER DRIVER CAUSES THE COLLISION. Only if you have no private medical insurance or your insurance doesn't cover the service or if your private health insurance runs out, can you require the other driver to pay your medical bills. But what if the person who causes the wreck has no car insurance or does not have enough insurance? The only sure way to protect yourself in this instance is to purchase additional medical insurance on your own car insurance policy. The next highest increments of coverage are $10,000 and $100,000. Your company must offer you at least $100,000. In other words, if you want the extra coverage, your insurance company has to sell it to you.
2. Your collision related medical bills are paid at 110% of the Medicare rate and you cannot be billed for the balance. Remember this example when figuring out how much you want to buy. Suppose Dr. X charges $50.00 for an office visit but Medicare would only pay $20 for that visit. What does the doctor receive as payment in full for the visit? 110% of the Medicare rate , $22. You cannot be billed or made to pay the $28.00 difference.
3. What kind of medical plan do you have? Car insurance medical coverage is very good coverage when compared to almost any private health plan. You do not need a referral to obtain medical care- you can choose your doctor, hospital, physical therapist or specialist without the need of a referral. There are no deductibles, no co-pays and as was noted above, the coverage stretches very far. The types of services are also very broad and can cover things as diverse as massage therapy to a home traction unit to chiropractic care to a physician prescribed fitness club membership, as well as prescription medications. The only requirements are that the treatment be collision related, reasonable and necessary. If treatment you've already had is determined to be neither reasonable nor necessary, you don't have to pay for it even if your car insurance company won't.

First party medical coverage is a crucial element of any car insurance policy. Carefully consider your needs and buy the appropriate amount of insurance for you. Cost is certainly a consideration, but remember my golden rule of coverage, buy as much coverage as you need and can reasonably afford. Under-insuring yourself can be disastrous, not only for you but for members of your family who live with you and do not have an insurance policy of their own. Remember, they are bound by the coverage choices YOU MAKE!

If you have questions about the amount of medical insurance coverage that is right for you, we would be happy to help you. You should also consult with your insurance agent regarding this very important choice.