6.3 Part B Medical Payments

Part B - Medical Payments Coverage

Part B is a first-party, no-fault-style coverage that pays reasonable and necessary medical and funeral expenses incurred because of bodily injury caused by an auto accident. Crucially, fault is irrelevant - MedPay pays the insured's medical bills regardless of who caused the crash. This contrasts sharply with Part A, which only responds when an insured is legally liable to a third party.

MedPay limits are written per person (commonly $1,000 to $10,000) and apply to each insured injured in the accident. There is no per-accident aggregate; if four insureds are hurt, each can collect up to the per-person limit.

Who Is Covered and the Time Limit

Part B covers two groups:

1. The named insured and family members while occupying any auto, or as pedestrians struck by a motor vehicle (or trailer designed for road use); and
2. Any other person while occupying your covered auto.

A critical numeric trap: covered expenses must be incurred within 3 years from the date of the accident. Treatment costs arising after the three-year window are not payable. The 3-year clock is among the most commonly tested PAP numbers.

Note the asymmetry between the two groups - the named insured and family enjoy broad portability (any auto, even as pedestrians), while guests are covered only inside your covered auto.

Part B Exclusions

Medical Payments will not pay for bodily injury sustained:

• While occupying a vehicle with fewer than four wheels (motorcycles, mopeds);
• While the covered auto is used to carry persons or property for a fee (excluding share-the-expense car pools);
• While occupying a vehicle (other than your covered auto) furnished or available for the regular use of the named insured or family;
• During war, nuclear, or radioactive events;
• While the vehicle is being used as a residence or premises;
• During participation in racing or any speed contest.

The "residence or premises" exclusion targets parked motor homes used for living; the four-wheel rule is why motorcycle injuries are excluded from a standard PAP MedPay.

Coordination and Worked Example

MedPay can stack with other coverages: an injured insured may collect Part B MedPay and still recover from the at-fault party's Part A liability, and MedPay may even pay before health insurance depending on coordination clauses and state law. This makes MedPay a low-limit, high-value supplement to health coverage.

Worked example: An insured with $5,000 MedPay is a passenger in a friend's car when it is rear-ended. The insured incurs $4,200 in ER and follow-up bills within the first year. Because Part B follows the person into any auto and ignores fault, the insured's own PAP MedPay pays the full $4,200 (under the $5,000 limit), and the insured may also pursue the at-fault driver's liability insurer for the same bills plus pain and suffering - MedPay does not bar the third-party claim.

MedPay vs. PIP and No-Fault States

The exam draws a sharp line between MedPay and Personal Injury Protection (PIP). MedPay is a narrow coverage paying only reasonable medical and funeral expenses. PIP, required in no-fault states, is broader: it pays medical expenses plus a portion of lost wages, essential-services/replacement costs (housekeeping, childcare), and a death benefit, all on a first-party no-fault basis.

In a no-fault state, the insured's own PIP pays first regardless of fault, and the right to sue the at-fault driver is restricted unless injuries cross a statutory verbal threshold (serious injury, disfigurement, death) or a monetary threshold (medical bills exceeding a set dollar amount). In a tort (at-fault) state, MedPay is optional and the injured party retains full rights to sue. Watch for questions that test whether MedPay or PIP applies, and whether the no-fault threshold permits a lawsuit.

Subrogation Under Part B

After paying a MedPay claim, the insurer may have a right of subrogation or reimbursement - it can recover what it paid from the at-fault third party (or from the insured's recovery against that party) so the insured is not paid twice for the same medical bills. Many policies and state laws coordinate this through a reimbursement clause rather than direct subrogation.

The practical exam point: MedPay's quick, fault-blind payment gets the insured's bills covered immediately, but if the insured later wins a liability judgment against the at-fault driver that includes those same medical costs, the MedPay insurer may claw back its payment. This prevents a double recovery while still giving the insured the cash-flow benefit of fast first-party payment.

Part B Medical Payments Scope

PAP Part B — Medical Payments pays reasonable and necessary medical and funeral expenses, regardless of fault, for bodily injury caused by an auto accident, incurred within a stated period (commonly 3 years) from the accident. It covers:

• 'You' and family members while occupying any auto or as pedestrians struck by a motor vehicle;
• Other persons while occupying your covered auto.

It is a per-person limit (e.g., $5,000 each) and applies on a first-party, no-fault-style basis distinct from liability. Trap: Part B follows the insured person even in someone else's car and even as a pedestrian, but follows others only while they are in the named insured's covered auto.

Part B Exclusions and Coordination

Part B excludes injury: while occupying a vehicle used as a public or livery conveyance; during use without reasonable belief of permission; while occupying a vehicle (other than a covered auto) furnished for the insured's regular use; arising from business of repairing/servicing autos; from war, nuclear, or racing; and to a person injured at work where workers compensation applies.

Coordination matters on the exam: Part B is often excess over, or coordinated with, health insurance and may overlap with Part A (a passenger in the insured's car could collect Med Pay and sue under another driver's liability). Worked example: the named insured, riding as a passenger in a friend's car, is injured in a crash. The insured's own Part B Med Pay still responds because it follows the person, supplementing the friend's coverage. Trap: Part B does not require the insured to be in their own car.