Personal Injury Protection ("PIP") and Medical Payments ("MedPay") are types of insurance coverage offered by automobile insurers regardless of who is at fault in an automobile accident.
While PIP and MedPay have similarities, there are crucial differences to know when selecting which type is right for you.
PIP
Automatic $2,500 coverage limit unless the insured rejects the coverage in writing.
Covers the insured(s), the family members living in the insured's household, any driver with permission to drive the insured vehicle, and all passengers in the insured vehicle at the time of an accident.
Used for reasonable accident-related medical expenses within three years of the accident.
Covers 80% of lost wages sustained as a result of an automobile accident. If the injured person is retired or unemployed, PIP covers essential services, like child care, lawn care, or necessary household maintenance usually performed by the injured person.
MedPay
Must ask for this coverage; it's not automatic.
While this coverage is also for reasonable accident-related medical expenses, the specific type of expenses it covers varies from policy to policy.
Does not pay lost wages.
Does not pay for essential services.
Though there are differences, there is perhaps no bigger difference than the subrogation rights under each policy.
Specifically, in Texas, when you recover funds from a third-party (e.g., an at-fault driver), certain subrogation rights attach to those funds. For example, if your health insurer paid for any medical treatment you received as a result of you being in a car wreck, your health insurer likely has a subrogation right or interest in the money you recover from the third-party's automobile insurer.
However, when you make a first-party claim (i.e., a claim on your own auto policy), whether your health insurer has a subrogation right or interest in the settlement funds depends on the type of coverage that was used to fund your payment. If you received money from a MedPay policy, your health insurer likely has a subrogation right or interest in those funds; however, if you received money from a PIP policy, your health insurer has no right to those funds.
In short, you will never have to repay any amount of funds you or a medical provider received from your PIP policy, while you may have to repay funds received from a MedPay policy. Consider these key differences in choosing the automobile insurance policy that's right for you.
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