Is it a bad idea to have health insurance cover auto insurance?

If you’ve been injured in an auto accident, you may find yourself thinking, “Is it a bad idea to have health insurance cover auto insurance?”

You’re not alone. Many drivers, while they know that they must have both auto and health insurance, don’t even know who pays first — auto insurance or health insurance — when it comes to filing medical claims after an auto accident.

While your medical payments car insurance coverage and health insurance are two separate entities, you can use both after being injured in an accident, but you should know when each one comes into play.

Before you learn more about if it is a bad idea to have health insurance cover auto insurance, enter your ZIP code today to receive free insurance quotes from companies near you.

Does health or auto insurance cover you after an auto accident?

When determining whether your health insurance or your auto insurance would cover you after an accident, you will need to turn to your coverage levels and your location to find the answer.

Now, if you have medical expenses covered by your auto policy, typically such coverage will be applied before your health insurance. This is particularly exciting because you usually do not need to pay any deductible to access this coverage.

As a quick refresher, the Insurance Information Institute explains that a deductible is a sum of money that you must pay when filing a claim.

When you consider that health insurance deductibles can be more than $1,000, this makes utilizing your medical expenses coverage seem like a great way to avoid financial heartache, but if you live in certain states, you may not have a choice in the matter. (For more information, read our “Is it a bad idea to have a high deductible on your auto insurance?“).

There are some states that govern the relationship between health and auto insurance after an accident has occurred. These are a called “no-fault states.”

If you live in such a state, each driver involved in the accident must cover their own medical payments through the medical payments or personal injury protection provided by their policies. (For more information, read our “Personal Injury Protection vs. Health Insurance“)

Check this list below to see if you live in a no-fault state:

• Florida
• Michigan
• New Jersey
• New York
• Pennsylvania
• Hawaii
• Kentucky
• Massachusetts
• Minnesota
• North Dakota
• Utah

Can you bill health insurance for auto accidents? Of course you can, but as a rule of thumb, if you have auto insurance coverage that will help with your medical expenses, then you should use it first.

It is encouraged that you communicate with your healthcare provider and insurance company so they can make sure all state procedures are being followed.

Read more: No-Fault Auto Insurance

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What similarities does health insurance share with auto insurance?

Both your health insurance and auto insurance cover your medical expenses, and they both share a few other traits as well.

Both Help Reduce Your Out-of-Pocket Medical Payments

Your health and auto insurance utilize the coverage options listed to relieve you of the financial burden of covering your medical costs if you are in an accident:

• Liability Bodily Injury
• Uninsured/Underinsured Bodily Injury Coverage
• Personal Injury Protection (PIP)
• Medical Payments

But what do these coverage options actually do? Well, if you were to cause an accident, your liability bodily injury coverage would cover the medical expenses for the injured party.

Now let’s say that you simply didn’t have enough to pay for everything. The other driver’s uninsured/underinsured bodily injury coverage would provide them with the extra medical expense coverage.

Of course, if you live in a no-fault state, PIP is usually required; this provides coverage for medical expenses, work loss for you and your passengers after an accident, regardless of fault.

Like PIP, medical payments coverage provides for the medical expenses incurred by policyholder and passengers in the insured vehicle after an accident.

Deductibles and Premiums are Used for Both Types of Insurance

Remember, a deductible is what you must pay before the rest of your coverage kicks in. For example, if you had a $500 collision deductible and suffered $1,000 in damage after hitting someone’s car, you would have to pay $500 before your insurance would pay for the rest.

Healthcare works the same way, although the deductibles are usually much higher.

You must pay premiums for your auto and health insurance as well, and just as deductibles affect car insurance rates, they affect health insurance rates too. The higher your deductible, the lower your premium. This is true for both auto and health insurance.

Read more: What is an auto insurance deductible and how does it work?

How are health insurance and auto insurance different?

Car insurance and health insurance are different in a few ways. Does Blue Cross Blue Shield cover car accidents just as your auto insurance company does? Of course, but health and car insurance are each governed and regulated differently.

This is due to the fact that driving is considered a privilege, not a right or necessity. As such, auto insurance companies are not as regulated as health insurance companies, which gives auto insurance companies more flexibility.

Each Industry Calculates Insurance Premiums Differently

While auto insurance companies use a multitude of rating factors to determine your premiums, your health insurance, according to HealthCare.gov, only uses five which include:

• Location
• Age
• Tobacco use
• Plan category
• Whether the plan covers dependents.

If you are already looking for cheaper insurance before having been in an accident, it won’t have much of an effect on the matter.

You should be aware that an auto insurance company will look at everything from your gender to your credit score to determine your rates. If you have bad credit, you could end up paying $100 more a month than someone with excellent credit.

No One “Ages Out” of an Auto Insurance Policy

If you’re about to turn 26 years old, you may be wondering, “If I finally have to buy auto insurance, is it a bad idea to have health insurance cover car insurance medical payments?”

The answer is no because if you’re still living at home and sharing a vehicle with your parents, you can remain on their policy indefinitely; however, health insurance companies will kick you off your parents’ plan when you turn 26.

When that happens, you can often find insurance through your employer or buy your own health insurance. This is highly recommended because not having health insurance can leave you with terrifyingly large medical bills, and you can even face fines.

You Cannot Be Denied Health Insurance Coverage

Under the Affordable Care Act (ACA) no person with pre-existing conditions can be charged more for or denied health insurance. The auto insurance industry does not have such a welcoming attitude.

Auto insurance companies will charge drivers they deem to be “high-risk” more for coverage than they would drivers they deem to be “safe.” They can also deny coverage completely.

If you have bad credit, a lot of speeding tickets, or accidents on your driving record, you would considered a “high-risk driver.”

If you think you may fall into this category, try to work on improving your driving skills to improve your credit score and pay attention to all traffic laws as you drive. These steps can help you improve your insurance rates.

Auto Insurance Companies Can Compete With Each Other

While health insurance companies face intense regulations, auto insurance companies can compete with each other to provide better services and, most importantly, pricing.

You can shop online for auto insurance and receive free quotes whenever you would like, but you could face come complications if you wanted a new health insurance company. If you get your health insurance through work, you could be stuck with that unless you changed jobs.

Should Health Insurance or Auto Insurance Cover Medical Expenses After an Accident: What You Need to Know

Not utilizing your medical payments coverage may keep you claim free, but when it comes to your health, it’s best that you utilize every resource you have to get the care you need. And if you live in a no-fault state you may have to use the PIP coverage first anyway.

Now that you know more about if it is a bad idea to have health insurance cover auto insurance, enter your ZIP code to receive free quotes from insurance companies in your city.

 

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