Medical Payments (Med Pay) Coverage In Auto Policy’s

Dallas insurance lawyers need to understand how medical payments (Med Pay) coverage works in auto insurance policies.
Med Pay is an optional coverage in an auto policy. Unlike personal injury protection (PIP) or uninsured motorist (UM), it is not a required coverage.
Under this coverage, the insurance company agrees to pay “reasonable expenses incurred for necessary medical and funeral services because of bodily injury caused by accident and sustained by a covered person.” This insurance agreement uses the term “caused by accident” as opposed to the more specific phrase “auto accident” used in the liability insurance agreement. Essentially this means that any injury that occurs that is related to the use of the auto is going to be covered.
This coverage defines “covered person” as the named insured or any family member while occupying or being struck by a motor vehicle. Also, any other person occupying the named insured’s covered auto is entitled to Med Pay coverage. The coverage for those persons other than family members, however, is limited to occupancy in a covered auto.
The Waco Court of Appeals and the Texas Supreme Court have made clear that Med Pay coverage is generally broader than PIP. Along with this distinction between Med Pay and PIP, Texas courts have ruled that Med Pay benefits can be “stacked.” This makes more total coverage available under an auto policy. Thus, an insured can receive Med Pay benefits as if the benefits were being paid on two separate policies when a single policy covers two automobiles and the premium charged on the policy has been paid separately on each automobile.
A tip for the consumer to know is that Med Pay may be subrogated against, whereas PIP may not. The result of this subrogation right is that Med Pay is cheaper to purchase.
Another distinction spelled out in a San Antonio Court of Appeals opinion is that Med Pay coverage does not apply when worker’s compensation benefits are available for the injured person.
Another exclusion is that Med Pay does not extend coverage where the insured person is occupying another vehicle.
The United States Fifth Circuit has held that Med Pay coverage is subject to government liens. This means that government claims for reimbursement made against Med Pay may be enforced against the insurance company for the reasonable value of the medical care. This applies even if the insured person does not desire to use the Med Pay benefits.
The last point covered here is that Med Pay is subject to offset calculations. The policy language allowing this is generally, “Any amounts otherwise payable for expenses under this coverage shall be reduced by any amounts paid or payable for the same expenses under any Auto Liability or Uninsured/Underinsured Motorists Coverage provided by this policy.” This offset is limited if the damages exceed the coverage provided by the uninsured/underinsured coverages.