My Health Plan Covers Me. Why Do I Still Need Auto Insurance?

What California actually requires

Every driver must be able to pay for harm they cause. For most people that means a liability policy with at least $30,000 for injury or death to one person, $60,000 per accident, and $15,000 for property damage. The DMV also accepts a $75,000 deposit, a $75,000 surety bond, or a self-insurance certificate. You must carry evidence of it while driving; a first offense without it carries a fine of $100 to $200 plus penalty assessments.

None of those options mentions health insurance, because the requirement protects the other people on the road, not you.

What a health plan does and doesn't do after a crash

• It does pay for your own treatment under your plan's terms: network, deductible, copays.
• It doesn't pay the other driver's medical bills, repair their car or yours, replace a fence you hit, or defend you if you're sued.

Those are exactly the costs liability insurance exists for, and an auto liability policy commonly includes paying for your legal defense if you're sued over a covered crash.

Where the two can work together

Medical payments coverage is an optional auto coverage that can pay medical bills for you and your passengers regardless of fault, up to a limit you choose. It can help with what a health plan leaves behind, such as a deductible, and it covers passengers who may have no health plan at all. Whether your health plan seeks repayment from an at-fault driver's insurer, and how medical payments coverage coordinates with your plan, varies by plan and by insurance company.

Uninsured motorist coverage is the other piece. California policies include it unless you sign a written agreement to delete it. If an uninsured driver injures you, your health plan pays for treatment, but uninsured motorist coverage is what stands in for the claim you would have had against that driver.

When adding medical payments makes sense

• Your health plan has a high deductible.
• You regularly carry passengers, such as children's friends or coworkers, whose coverage you don't know.
• You'd rather not wait for fault to be sorted out before bills are paid.

It is commonly one of the less expensive additions to a policy, but the price varies by insurance company. Ask us to quote it both ways so you can see the difference.