What is Medical Payments Coverage on My Home Insurance Policy?
Coverage F: Medical Payments
In a home insurance policy, you can usually select coverage between $5,000 and $25,000 for Medical Payments Coverage. At Young Alfred, we recommend you actually select the lower option and save some money. Here's why:
Medical Payments covers medical costs that occur when a guest on your property gets injured. This does NOT cover pain and suffering if the injury is really bad, but just the hospital bills or costs needed to care for the injury when it occurs. This coverage kicks in AFTER your guest's health insurance. Since it's 2018, your guest is required to have health insurance anyway!
Example 1: Imagine your friend Amanda comes over for your summer BBQ party and slips on a banana peel, breaking her leg. She ends up in the ER getting a cast and crutches. She obviously has a big hospital bill, but, like most responsible Americans, Amanda has health insurance. Even if she has a high deductible plan, they usually have a deductible of $5k on the year, so the rest will be paid by her health insurance company. So even if she does ask you to reimburse her for her deductible. Your $5,000 in medical payments coverage will be more than enough.
Example 2: Let's say you and Amanda are not friendly. The injury costs $50k, and Amanda turns hostile, deciding to open a lawsuit against you. In this scenario, your Coverage F does not cover the lawsuit. However, your Coverage E: Personal Liability will kick in. Usually, your liability coverage in a home insurance policy is either $100,000, $300,000, or $500,000. (above $500,000 and you need an umbrella policy - usually only $300-$500 a year for an additional $1,500,000 in coverage). So in this example, your Medical Payments coverage does not even matter.
While more Medical Payments coverage doesn't necessarily help you more, it does cost more. This is why we recommend you select the lowest coverage level for Medical Payments and use the money you will be saving here to beef up your Liability Coverage or even add-on some Water Backup.
At your service,