stepping on a banana peelCoverage F: Medical Payments in Home Insurance

In a home insurance policy, you can usually select coverage between $1,000 and $5,000 for Coverage F: Medical Payments Coverage. At Young Alfred, we recommend you select $5,000. 

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, but could be used to cover their deductible if they have a high deductible. 

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. 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.

As Medical Payments Coverage is a small line item on your insurance policy, it usually isn't going to save you much money from going to $5,000 to $1,000. This is why we recommend you select the $5,000 coverage level for Medical Payments. 

At your service,
Young Alfred