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Can You Use Health Insurance in a Car Accident?

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A commonly asked insurance question is whether health insurance can replace your car insurance in the event of a car accident. While the answer is “yes”, the explanation is not as straightforward. There are times when you can, and cannot, use your health insurance to replace your car insurance. 

Do I Use Health Insurance or PIP in a Car Accident?

It is not so obvious which insurance prevails when it comes to your own injuries. Do you use personal injury protection insurance (PIP), a form of car insurance, or your health insurance? PIP is meant to cover any injuries, lost wages, and rehabilitation costs associated with a car accident. It is mandatory in 12 states, and optional in the rest. Side by side, PIP and health insurance do roughly the same thing, there are however, key differences. 

If you are from one of the 12 states that require PIP (or the three that require MedPay), you are expected to use those limits before turning to your health insurance. PIP/MedPay limits generally start at $10,000 but can go over $100,000, while in the state of Michigan, PIP is unlimited. Unlike other types of car insurance, you do not need to prove the other driver was at-fault, and usually see swift reimbursement as soon as you file your claim. PIP and MedPay don’t come with an out-of-pocket deductible that health plans usually have. Going through your PIP or MedPay can help you avoid that payment. Once you exhaust your PIP or MedPay limits, you may tap into your health insurance.

There are a few exceptions. The most notable is in the state of New Jersey, where drivers have the option of selecting their health insurance to be the primary provider for medical expenses. In states like Michigan, where the unlimited PIP can get expensive, you can coordinate with your health provider to reduce the premium. If you choose to coordinate, your MI health insurer would take care of your hospital and doctor bills, while PIP would cover lost wages and rehabilitation costs. If you are insured with Medicaid or Medicare however, you will not be able to coordinate with your car insurance.

Can You Use Health Insurance If You Do Not Have PIP or MedPay?

If you do not have PIP or MedPay coverage, you may use your health insurance to pay for any medical bills resulting from a car accident. This will ultimately be your best course of action. You do have the option of filing a claim against the other driver’s insurance, but that can take a while to sort out as it is determined who was at-fault in the accident, and how much each driver should be compensated. The process can take months, all while you are dealing with growing medical bills. We spoke to Jared Staver, a personal injury lawyer from Chicago, who recommends you send all medical bills to your health insurance as they come. You will not want to get in debt, which may hurt your credit. Ultimately, you may need to file a claim against the driver regardless. Since it was technically a car accident, your health insurance company may want to recoup your cost of treatment from the other driver’s insurance company through a process called subrogation.

Should You Get PIP or MedPay if You Have Health Insurance?

Despite their similarities, there are actually many benefits to having one of these two coverages (or both) in addition to health insurance even if you do not live in a state that requires PIP. For one, PIP and MedPay provide coverage for passengers injured in your vehicle. If you find yourself in the car often with non-immediate family, it may be a huge benefit to have PIP or MedPay cover their injuries in the event of an accident. 

According to Allstate, they can also help pay for the deductible on your health policy. If you anticipate having to use your health insurance, as your limits run low, you can use the last bit to pay the deductible. PIP and MedPay will also cover expenses associated with a funeral. While it is a somber thought, funerals are expensive -- something that can add more stress to an already upsetting situation. PIP and MedPay will cover those costs. 

Next, PIP, but not MedPay, covers lost wages due to injury. For example, if you broke your leg and work in construction, you may not be able to work. PIP will pay you the wages you would have otherwise earned up to a certain limit per your policy. Standard health insurance policies do not have this provision. You would have to buy a separate Disability Insurance policy in order to recover lost earnings.  

Lastly, there is extra comfort in knowing you have a second source of coverage to pay for a potentially expensive injury. Medical bills can pile up, and having an extra $50,000 worth of PIP or MedPay coverage can make a difference. You also have a back-up in the event your health insurance company denies your claim. There are many terms, and nuances associated with a health policy. Some provision may give your company grounds to deny a car accident claim. It depends on your policy. At least with PIP, you wouldn't have to worry about that.

PIP/ MedPayHealth Insurance
Covers passengers, even if not on policy Does not cover passengers not included in policy
Covers lost wages and rehab costs (PIP only) Won't cover lost wages due to injury
Covers funeral costs Won't usually cover funeral costs
Back-up if health insurance claim is denied Health insurer can possibly deny claim

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