Do I really need extra medical coverage through my auto insurance?


Depending on where you live, your auto insurance company may offer personal injury protection or medical payments coverage, which would cover you if you're injured in an accident. But if you already have health insurance, you may be wondering whether these types of coverage are even necessary.
PIP and MPC
PIP (personal injury protection) is a form of auto insurance coverage designed to cover medical bills after an accident. While each state differs in terms of what PIP covers and does not cover, it can provide compensation for lost wages, funeral expenses, child care and other expenses related to death, injury and loss of work, according to Allstate.
PIP coverage was designed to protect drivers in states with no-fault auto insurance laws. Because suing the other driver for damages is prohibited in no-fault states (with some exceptions), each driver's insurance covers his own repair and medical costs. In the 12 no-fault states, a minimum amount of PIP coverage is required. But it's optional, if available, in the remaining states.
MPC (medical payments coverage) is similar to PIP. It helps cover your medical bills and lost wages, regardless of who's at fault in an accident. It also covers your passengers and covers you if you're hit by a car as a pedestrian, according to Allstate.
Do I need this coverage?
When looking at the amount of PIP or MPC coverage, or whether to buy it at all, consider the following:
  • Your health insurance out-of-pocket costs and limits. If your health insurance requires a $1,500 deductible, the medical coverage you have through your auto insurance could cover it, according to Allstate.
  • Your passengers. Your personal health insurance policy won't cover those in the car with you.
  • Other costs. Health insurance won't help make up for lost wages during a lengthy hospital stay.
Uninsured motorist coverage
Another optional form of insurance coverage to consider, especially if you're thinking of limiting or opting out of PIP or MPC, is uninsured motorist (UIM) coverage. UIM coverage protects you if you're in an accident with someone who has no insurance or is a hit-and-run driver. According to a study by the Insurance Research Council, 14 percent of drivers were uninsured nationwide in 2007. In some states, this number is much higher. For example, 29 percent of drivers in New Mexico and 28 percent of drivers in Mississippi are uninsured.
While uninsured motorist coverage is required only in some states, it's still a good idea to purchase this optional coverage. Without it, you could be forced to cover the costs of an accident out of your own pocket. If your state allows you to sue for damages, there's still no guarantee you will collect any money.
Even if you already have adequate health insurance coverage, you may want to think twice before deciding against optional UIM, PIP or medical payments coverage. While it may save you a few dollars in monthly auto insurance premiums, it can be invaluable if you're ever injured in an accident that leaves you with high medical bills and without the ability to work.

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