Sometimes we have to make a liability claim against our own liability policy. This happens most often in inter-family claims where, perhaps, hubby was driving, screws up, causes a wreck, and wife is injured. Well, that’s what you have liability insurance for, so there’s no need to be shy. Make the claim!
But there is a little surprise lurking in that process for people who have opted to pay extra for medical payments coverage, or “med pay” as we call it in the business.
Let’s say your overall claim was worth $6000. Cool. Let’s also say that you have $2000 in Med Pay. That means your policy will pay out your $2000 in Med Pay, and your liability policy will then cover the remaining $4000. In other words, the liability policy gets a credit for Med Pay! But you’ve paid extra for that! Is that fair?
Well, it depends on your perspective. It’s allowed, so we’re stuck with it, so fair doesn’t really matter. But from the POV of the insurance companies, the claim is “worth” $6000, so why should they pay more? From our POV, though, they should pay the $6000 because that’s what the liability policy is on the hook for, and they should pay the $2000 because you’ve paid for it.
The current rule for the credit stands as of this writing. However, it is worth noting that if the liability policy pays out its limits, then it does not get a credit for Med Pay, in which case you’d get the limits PLUS the Med Pay. So there’s that.
This stuff is wacky, and you probably don’t have time to figure it all out, which is precisely why you should call me. If you have an injury claim call me at 919-929-2992.