What is Medical Payments Coverage in Georgia Auto Insurance Law?

If you or your passenger are injured in a motor vehicle collision, most medical providers will be unwilling to just wait for settlement of a liability claim before they are paid. While some may agree to provide treatment on a lien against the liability claim, it gets a lot trickier when surgery or other highly expensive treatment is needed. Even if the injured person has health insurance, high deductibles may be involved and some health insurance policies exclude coverage for motor vehicle accident injuries.

One means of paying medical expenses for injuries in car wrecks is medical payments coverage in an auto insurance policy. Though it is not compulsory for automobile insurance coverage in Georgia, it is specifically regulated by statute where it is provided. O.C.G.A. §33-34-2(1) provides as follows:

“Medical payments coverage” includes any coverage in which the insurer agrees to reimburse the insured and others for reasonable and necessary medical expenses and funeral expenses incurred as a result of bodily injury or death caused by a motor vehicle accident, without regard to the insured's liability for the accident. Coverage shall be available to the named insured, resident spouse, and any resident relative while occupying the covered motor vehicle, and to any other person legally occupying a covered motor vehicle.

This is different from “no fault” coverage that is required under the laws of some states, and was part of Georgia law for a long time.

Although by statute this coverage (sometimes referred to as “med pay”) is only required to cover named insureds and resident relatives while in the covered vehicle, policies will sometimes extend the coverage to those individuals in any vehicle or as a pedestrian. Claims against an insurer for bad-faith failure to pay medical payments benefits are subject to O.C.G.A. §33-4-6.

Because it is a first-party coverage, insureds seeking medical payment benefits must generally comply with policy terms or else risk a coverage defense arising from non-compliance. These terms may include submission of a medical authorization to allow the insurer to obtain medical records and bills, as well as submitting to an insurer's request for an examination under oath or recorded statement.

Under O.C.G.A. §33-7-11(i), insurers are authorized to include “non-duplication of coverage”provisions in uninsured motorist policies for benefits paid under medical payments coverage or the workers’ compensation law. Insurers have argued that such provisions entitle them to an offset or reduction of uninsured motorist coverage to the extent of these other payments.

In Mabry v. State Farm, 334 Ga.App. 785, 780 S.E.2d 533 (2015, however, the Court of Appeals ruled that such non-duplication provisions did not prevent an insured from seeking the full amount of coverage where the damages arose from other categories of damages to which the medical payments or workers’ compensation benefits did not apply, such as pain and suffering and future medical expenses. This was true even though the medical payments and workers’compensation benefits substantially exceeded the amount of uninsured motorist coverage. Thus, contrary to the position often taken by insurers, O.C.G.A. §33-7-11(i) does not allow an absolute offset for any such benefits paid, but merely precludes recovery for those benefits without affecting the availability of uninsured motorist coverage for other damages.

Medical payments coverage may also be involved in non-automobile insurance contexts. Many business insurance and homeowners' policies contain this coverage, although it often excludes injuries to employees of the business and residents of the household.

Ken Shigley is a past chair of the Tort & Insurance Practice Section of the State Bar of Georgia and the Georgia Insurance Law Institute. He worked a decade in a law firm that represented numerous insurance companies in both defense of injury and death cases and in insurance coverage litigation. He is also a past president of the State Bar of Georgia with a long list of professional honors and distinctions.