Medical Payments, or MedPay, coverage is the most under-utilized type of insurance coverage for individuals who are representing themselves on car accident claims in North Carolina. This type of coverage is not required in North Carolina, and because it is optional, many people do not know to ask for it when shopping for insurance. Further, most people do not know what Medical Payments coverage actually is and therefore avoid it. However, the reality is that Medical Payments coverage is extremely helpful to accident victims who are financially strained after a motor vehicle accident.
Medical Payments coverage reimburses the insured for the reasonable and necessary medical and funeral expenses related to an automobile accident. Medical Payments coverage, which is often referred to as “MedPay” coverage, is an insurance coverage that pays for those medical expenses up to the policy’s stated limits. Interestingly, MedPay coverage is available to a covered individual regardless of whether or not they caused the collision. Therefore, MedPay is considered to provide no-fault insurance coverage.
In determining what reasonable and necessary medical expenses the car insurance company may reimburse, it is important to understand what is meant by “reasonable” and “necessary.” A “reasonable” medical expense is one that is consistent with what is typically charged by a majority of similar medical providers within a given geographical area. A “necessary” medical expense is required and expected medical treatment rendered by an appropriately licensed medical provider who is practicing within their approved scope of medicine.
Most North Carolina policies limit coverage to those expenses incurred for services rendered within three (3) years from the date of the accident. While three years is a lengthy period of time, many individuals are completely unaware that they have this kind of insurance coverage and forego seeking compensation from MedPay.
It is important to note that you are entitled to this coverage regardless of whether or not you have billed your medical expenses to a health insurance company. Therefore, you may receive compensation for MedPay even though your health insurance has paid your entire medical bill. It is also worth mentioning that your health insurance company may be entitled to a subrogation or lien interest in your MedPay recovery, a topic which will be discussed at length in our Medical Lien section.
Who is covered under MedPay?
Typically MedPay provides coverage to the following individuals:
You (as the named insured)
Your spouse (living in the same household)
Any family member living in your residence
Any other person occupying your vehicle at the time of the collision
How much Medical Payments coverage is available?
The available amount of MedPay or MedPay limits is dependent upon the applicable coverage that you selected when you purchased car insurance. MedPay coverage is sold to North Carolinians in amounts ranging from $250 to $1 million. The most common amounts range between $500 and $5,000.
Many individuals, including lawyers, consider the MedPay process to be simple. In essence, the process of collecting on your MedPay claim involves opening a claim, presenting the crash report, and transmitting a copy of your medical bills and records to the insurance company. However, obtaining compensation from this coverage can be an extremely time-consuming and tedious process that involves calling and tracking down payments from the car insurance company to medical providers for services that have already been billed and paid for by your health insurance company. This logistical nightmare may have been designed to be difficult as a mechanism for discouraging large MedPay claims from successfully receiving complete compensation.
For many smaller MedPay policies, the process is clean and simple. However, if you are experiencing difficulties involving your MedPay, visit our pages on Requesting MedPay Reimbursement and Advanced Strategies.
Will filing a Medical Payments claim raise my premium?
Since Medical Payments is a no-fault insurance coverage, it is considered contractual in nature and as such should not cause your premium to increase. However, the specific nature of your contractual relationship is governed by the terms of your insurance policy with your insurance company or the insurance company providing coverage. It may be advisable to review the exact nature of the applicable insurance policy to determine the terms and nature of the contractual relationship.
When will MedPay NOT apply?
There are numerous exclusions associated with North Carolina MedPay insurance policies that prohibit this type of coverage or exclude it from applying. I have taken the liberty of listing some of the most common North Carolina Medical Payments exclusions that provide no coverage to any person for bodily injury:
Received while occupying a taxi or while transporting people or goods for money
Received while occupying a motorhome or recreational vehicle
Received while occupying any vehicle during the course of employment, if workers’ compensation coverage is required or voluntarily given
Received while occupying a vehicle without permission
Received as a result or consequence of a war, civil war, insurrection, rebellion or revolution
Received while using, operating or occupying any motorized vehicle having less than four wheels
Medical Payments and multiple policies
If you determine that there is more than one available MedPay policy providing coverage, you may be able to collect from each policy. However, your ability to collect from each available policy is limited by the fact that you are only permitted to collect up to the exact amount of your reasonable and necessary medical expenses incurred as a result of the motor vehicle accident. This means that you cannot submit that same bill to two different insurance companies, or “double dip” on MedPay coverage.
Hypothetical #1: You are injured in a car accident and incur reasonable and necessary medical treatment totaling $3,750. You assert a bodily injury claim for negligence against the at-fault driver and his insurance company (Allstate). You have MedPay coverage through your own insurance company (Geico), which is limited to $1,000 of coverage. Your adult daughter, who owns her own car and has her own insurance policy (Nationwide), lives with you. Her Nationwide MedPay coverage is limited to $2,500. How much MedPay can you collect?
Answer #1: You should be able to collect a total of $3,500 in MedPay coverage, given that your Geico policy of $1,000 is stacked upon your daughter’s Nationwide policy of $2,500.
Hypothetical #2: You are injured in a car accident and incur reasonable and necessary medical treatment totaling $1,750. You assert a bodily injury claim for negligence against the at-fault driver and his insurance company (Allstate). You have MedPay coverage through your own insurance company (Geico), which is limited to $1,000 of coverage. Your adult son, who owns his own car and has his own insurance policy (Nationwide), lives with you. His Nationwide MedPay coverage is limited to $2,500. How much MedPay can you collect?
Answer #2: As the golden rule of MedPay states, “You are only permitted to collect up to the exact amount of your reasonable and necessary medical expenses incurred as a result of the motor vehicle accident.” In this situation, you would only be able to collect $1,750 in MedPay, even though your Geico policy of $1,000 is stacked upon your son’s Nationwide policy of $2,500. Since MedPay coverage will not permit you to submit the same bill twice, your MedPay recovery is limited to $1,750 or the amount of related medical expenses incurred.
The insurance company providing MedPay coverage is obligated to pay those reasonable and necessary medical expenses incurred as a result of a motor vehicle accident within three (3) years of the date of the accident.
Notice of accident requirements
In North Carolina, there exists a requirement that the insured notify the insurance company of an accident within a reasonable period of time after the accident. The notification should cover when, where and how the incident occurred.
The perceived or intended purpose of this requirement is to permit the insurance company the necessary time to investigate the incident and prepare their defenses.
At least one North Carolina court has held that a failure to provide notice to the insurance company for eight (8) months after the accident, without any reason for the delay, could not be considered “as soon as practical.” It is important to note that a reasonable delay in providing notice of the accident to your insurance company should not materially prejudice them.