How Uninsured Motorist Coverage, PIP and MedPay Work After a Car Crash

More than one insurance policy can apply after a car crash. People usually think first of the at-fault driver's liability coverage, but personal injury protection (PIP), MedPay and uninsured motorist (UM) coverage can matter just as much. A car accident attorney will usually ask for the declarations page of every policy that might apply, because the coverage often decides how much of a loss can be paid.

At-fault and no-fault states

Most states require drivers to carry minimum liability insurance, which covers injuries and property damage the insured driver causes to others. State minimum limits can be low compared with the cost of a serious injury. In an at-fault state, the injured person usually makes a claim against the at-fault driver's insurer. Some states use a no-fault system, in which each driver's own PIP coverage pays medical expenses and some lost income regardless of fault. In those states, a lawsuit against the at-fault driver may be limited unless the injury meets a legal threshold.

How PIP and MedPay work

No-fault states require PIP, and a few other states do as well, and some others offer it as an option. Depending on the policy, it can pay medical bills, part of lost wages and certain household expenses. Medical payments coverage, usually called MedPay, is separate and generally smaller. It pays medical expenses for the policyholder https://pastelink.net/8nbem6wf and passengers regardless of fault, up to the limit on the policy. A car accident attorney will check whether these benefits require prompt notice or a claim form.

Uninsured and underinsured motorist coverage

Uninsured motorist (UM) coverage pays for injuries caused by a driver who has no insurance, and many states extend it to hit-and-run crashes. Underinsured motorist (UIM) coverage applies when the at-fault driver's limits are too low to cover the loss. Some states require UM coverage, while others allow it to be rejected in writing. Rules on stacking coverage from more than one vehicle or policy also vary. A relative's policy in the same household may also provide UM coverage in some states.

How a UM claim works

The UM claim goes to the injured person's own insurance company, but in that claim the insurer takes the position of the uninsured driver, which means it can contest fault and the value of the claim. Policies often require prompt notice of the claim, and a hit-and-run claim may require a timely police report. In some states, the UM insurer must be served with a copy of any lawsuit against the at-fault driver. A car crash attorney usually checks these steps early, since a missed step can put coverage at risk.

Repairs and rentals

Collision coverage pays for repairs to the policyholder's car regardless of fault, less the deductible. The insurer may then seek repayment from the at-fault driver's insurer through subrogation, which can sometimes recover the deductible as well. Rental reimbursement and gap insurance are optional coverages that can matter after a total loss.

Health insurance and liens

Medicare, Medicaid or a health plan may pay medical bills first and later seek repayment from a settlement. A motor vehicle accident attorney usually resolves these liens before funds are distributed. Coverage rules differ by state and by policy, and this is general information rather than legal advice.