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What Is first dollar coverage?

First Dollar Coverage is an insurance policy in which the insured does not have copays or out-of-pocket expenses required before coverage begins. Instead, the insurer begins payment from the very moment an insurable event occurs, so there is no financial pressure placed on the insured. Monthly premiums are typically higher for this type of plan because the insurer assumes greater risk by paying for expenses right up front, and there is generally a lower cap on the amount allowed for the policy limit. First dollar coverage is available for car insurance, homeowner’s insurance, health insurance, and various other types of insurance policies.


Learn more about first dollar coverage

When do I need to be aware of first dollar coverage?

One example of when first dollar coverage would be beneficial is if you are in a car accident and don’t have any savings to use for your medical expense copays. If you don’t have access to an HSA or other type of health insurance investment account, first dollar coverage could cover those initial costs while you figure out how to pay for any expenses that extend beyond your policy limit.

What is important to know about first dollar coverage?

First dollar coverage is something everyone should be aware of when considering an insurance policy. Whether you’re looking at homeowner’s insurance, car insurance or health insurance, this may be your best option:

  • First dollar coverage doesn’t require a copay, so the first time you step into the doctor’s office, file a claim for a home repair, or take your car to the shop after an accident, the costs are covered.
  • You typically receive coverage up to the full amount of your first dollar coverage policy.
  • Many individuals will be more inclined to receive medical care after an accident with first dollar coverage because there’s no pressure to pay for care.
  • First dollar coverage is often most prevalent in the health care industry than in home or car ownership due to the higher premiums.