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Liability Insurance vs Medical Payments Coverage

By Jarrod Heil

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Wait, they’re not the same thing? You’re not alone in this conundrum of thinking liability insurance and medical payments coverage the same thing. It’s actually one of the most common mix-ups in the world of home insurance.

The two coverages are similar in some ways, but they’re more different than they are alike. Let’s start off by getting some clarification of each coverage.
 
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What Is Liability Insurance Coverage?

Liability insurance is a widely used type of coverage in many different insurance policies. It usually has a six-digit or higher limit that protects policyholders from paying out of pocket for large medical bills and legal expenses due to an injury that occurs on your property or damage caused to another person’s property. Within a home insurance policy, liability falls under Coverage E.

Related Article: Home Insurance Coverage E
 
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What Is Medical Payments Coverage?

Medical payments coverage kicks in and picks up small tabs for medical bills when a minor injury occurs on your property. With limits that typically range from $1,000 to $10,000, medical payments to others coverage is often used in conjunction with a person’s health insurance. Within a home insurance policy, medical payments to others falls under Coverage F.

Related Article: Home Insurance Coverage F
 
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What Does Liability Insurance Cover?

Liability insurance covers medical bills and legal expenses that are received as a direct result of an injury that occurred on your property and which you have been found liable for, whether the result was due to negligence or something else. You may also add a liability rider to your policy to cover things such as defamation and slander. This rider is not typically included in home insurance policies and will raise your monthly premium.
 
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What Does Medical Payments to Others Cover?

Medical payments to others coverage helps pay for its namesake: medical payments to others. Any substantial medical bill introduced as a claim under Coverage F would likely be escalated to a liability claim. That’s because medical payments to others are reserved for small hospital and doctor bills, such as X-rays, ambulance rides, physical therapy, medication, deductibles and various other small medical bills usually remaining after health insurance picks up its portion.
 
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What Are the Main Differences Between Liability Insurance and Medical Payments to Others?

There are a few huge differences between liability insurance coverage and medical payments to others coverage. For liability insurance to kick in, you must be found liable for causing the injury. With medical payments coverage, it doesn’t matter who’s at fault for the injury, it will still kick in and pick up the tab.

While medical payments to others usually covers you at $1,000 per claim and goes up to about $10,000 per claim, liability coverage typically covers you at $100,000 per claim and can go all the way up to $1 million per claim or more. That’s an extremely substantial difference that can make or break the personal finances of most people.

In addition to the huge gap between amounts of coverage, liability ensures you’re covered for major medical procedures, legal expenses and settlement fees should the injury result in a lawsuit. Medical payments coverage is designed to stop a small injury from becoming a prolonged injury or lawsuit and will not cover either expense.

A medical payments claim can only be filed during a third-party injury, while a liability claim can be filed for a third-party injury and property damage claim. For many of these reasons, liability coverage is included in a home insurance policy and some insurance companies offer the consumer a choice to add or forgo medical payments to others coverage.

To learn more about each coverage, check out these articles about Liability Coverage and Medical Payments Coverage.