Automobile Insurance – Medical Payments Coverage

Medical Payments Coverage in an automobile policy is also known as Med-Pay coverage.  Med-Pay is an optional 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 insuring agreement uses the term “caused by accident” as opposed to the more specific phrase “auto accident” used in liability in the liability insuring agreement.  This coverage defines “covered person” as the named insured or any family member while occupying or being struck by a motor vehicle.  Also, any 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.

According to the 1973, Waco Court of Appeals opinion, Dhane v. Trinity Univers. Ins. Co., med pay coverage is generally broader than PIP coverage.

Unlike any other provision in the Texas Auto Policy, Texas courts have ruled that med pay benefits can be “stacked.”  These courts include the Austin Court of Appeals in the 1969, opinion styled, Harlow v. Southern Farm Bureau Cas. Ins. Co. and the Houston Court of Appeals in the 1961, opinion styled, Southwestern Fire & Cas. Co. v. Atkins.  In other words, an insured may 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.  Stacking is only allowed with med pay benefits according to the 1978, Texas Supreme Court opinion styled, Holyfield v. Members Mut. Ins. Co.

One other important feature of med pay is that it is cheaper than Personal Injury Protection benefits.  This is because med pay is subject to subrogation rights of the insurer whereas Personal Injury Protection benefits are not subject to subrogation.