Some clients believe that
Health Insurance is not necessary since their
Auto Insurance provides medical payment coverage. They argue that Auto Insurance is going to protect them from health service bills, so why pay another premium to cover the same thing? There are two main points that clients should be aware of, the first of which may seem obvious to some:
1) You have to be injured in an auto accident to have an Auto Insurance Policy cover any medical expenses. If you’re appendix bursts, you fall off a ladder, you’re bitten by a dog, you cut yourself while cooking dinner, you run over your foot with the lawnmower, you’re injured during a pickup game of football…you get the idea. None of these things are related to your or anyone else’s Auto Insurance. You need Health Insurance to help with the medical expenses incurred as a result of these injuries.
2) Let’s say you are injured in an auto accident. What will your or the other party’s Auto Insurance Policy cover? First, it is important to understand that Auto Insurance Policies are divided into different coverage sections. Certain things need to occur to trigger these coverage sections. In Illinois, for example, your Auto Insurance Policy includes “Medical Payments Coverage per Person”. This is considered a “no-fault” coverage meaning no one needs to be legally liable for the coverage to kick into play. If you or your passengers are hurt, the Medical Payments Coverage applies. Sounds great, doesn’t it? Well, not so fast. Medical Payments coverage was designed to keep small claims from turning into large claims. The idea is if the insurance carrier appears to be compassionate and willing to compensate you or your passengers for an ambulance ride and some band-aids, you will be less inclined to file a lawsuit or pursue larger damages. Therefore, most people have small limits for this coverage such as $5,000 or $10,000. Such a small limit works okay for minor accidents (which is what the coverage is designed for), but what happens if there is a head injury or ongoing treatment is needed for several months? In an accident where the Medical Payments Coverage is not sufficient to cover all of the medical expenses, then another coverage may kick in. That coverage is Bodily Injury Liability. Bodily Injury Liability is different than Medical Payments because it requires someone to be legally liable before it will pay anything. Also, if you are the at-fault party, you cannot collect under your own Bodily Injury Liability. Since legal liability is not always clear, it can take days to months to even years for companies to argue with each other and decide who was responsible for the accident. This leaves you on the hook for all of the medical bills until a decision is reached amongst the insurance carriers involved in the claim. If you have the unfortunate luck of being hit by someone with a non-standard company, chances are better than not that you’re going to be involved in a long battle to get any money for your bills.
In simple terms, Auto Insurance works in conjunction with Health Insurance; it does not replace it. Don’t put your health or your financial well-being in jeopardy to save a few bucks. Remember, you may not want the guy who lives down the street’s fly-by-night Auto Insurance carrier to decide how much to give you for your spleen.
Michael J. Lloyd
Brockhaus, Stuber, Fox & Lloyd, Inc. Insurance Agents
http://bsflinsurance.com/