6.3 Part B Medical Payments
Key Takeaways
- Part B pays reasonable medical and funeral expenses from an auto accident regardless of fault (first-party, no-fault), for expenses incurred within three years.
- Limits apply per person, per accident (commonly $1,000-$10,000), and do not stack across multiple injured occupants.
- You and family members are covered as occupants of any auto and as pedestrians; other persons are covered only while occupying your covered auto.
- Med Pay is generally excess over other auto medical coverage on non-owned vehicles and may carry subrogation rights against duplicated liability recoveries.
- Exclusions include fewer-than-four-wheel vehicles, livery use, regular-use non-covered autos, vehicles used as residences, racing, war/nuclear, and workers-compensation-eligible injuries.
Part B - Medical Payments Coverage
Part B pays reasonable and necessary medical and funeral expenses incurred because of bodily injury caused by an auto accident, and it pays regardless of fault. It is a first-party coverage - it pays the insured and certain occupants without anyone having to be proven negligent. Expenses must be incurred within three years of the accident.
Because Part B is no-fault, it provides fast, small-dollar medical reimbursement that supplements the insured's health plan and avoids waiting for a liability determination. Typical written limits are modest - $1,000 to $10,000 per person, applied per person, per accident (not a single shared limit).
Who Is an Insured Under Part B
The Part B definition of "insured" splits into two groups:
- You or any family member while occupying (in, upon, getting in/out of) any auto, or when struck as a pedestrian by any motor vehicle designed for use on public roads (this pedestrian coverage follows the person, not the car).
- Any other person while occupying your covered auto - guest passengers in your insured vehicle are covered, but only while in your covered auto, not when they are pedestrians or in other vehicles.
This person-vs.-vehicle distinction is a classic exam item: a family member is covered as a pedestrian or in any auto; a non-family passenger is covered only inside your covered auto.
Coordination With Other Coverage and Subrogation
Med Pay can overlap with health insurance, Part C, and the at-fault driver's Part A liability. Standard rules:
- Med Pay is generally excess over other auto medical coverage on a vehicle the insured does not own.
- If the insured collects under both Med Pay and a liability settlement, the insurer may have subrogation/reimbursement rights for amounts duplicated, depending on state law.
- Med Pay does not require the insured to prove fault, which is why it pays quickly.
Worked example. An insured passenger incurs $7,500 in medical bills. The PAP carries $5,000 Med Pay per person. Part B pays its $5,000 limit; the remaining $2,500 must be pursued through health insurance or the at-fault party's liability coverage. Med Pay does not stack across multiple injured persons - each injured insured has a separate $5,000 limit.
Med Pay vs. PIP (No-Fault States)
Med Pay is easy to confuse with Personal Injury Protection (PIP), the broader first-party benefit required in no-fault states. Both pay regardless of fault, but they differ in scope:
| Feature | Part B Med Pay | PIP (No-Fault) |
|---|---|---|
| Medical/funeral expense | Yes | Yes |
| Lost wages | No | Yes (usually a percentage, capped) |
| Essential-services / replacement-services | No | Yes |
| Survivor / death benefits | Funeral only | Yes |
| Right to sue the at-fault party | Unrestricted | Limited by a verbal or monetary threshold |
In add-on and traditional-fault states the PAP offers Med Pay; in no-fault states the PIP endorsement replaces or supplements it. Exam questions often hinge on the fact that only PIP pays lost wages and replacement services - Med Pay is strictly medical and funeral. The no-fault "threshold" (verbal injury description or a dollar amount of medical bills) is what an injured person must exceed before retaining the right to sue in tort.
Part B Exclusions (Traps)
| Excluded Situation | Note |
|---|---|
| Injury while occupying a vehicle with fewer than four wheels | e.g., motorcycle |
| Injury while the covered auto is used to carry persons/property for a fee | car pools excepted |
| Injury while occupying a vehicle (other than your covered auto) furnished for regular use | named insured & family |
| Injury while occupying a vehicle used as a residence or premises | parked living quarters |
| Injury arising out of war, nuclear hazard, or racing | speed-contest exclusion |
| Injury while using a vehicle without a reasonable belief of entitlement | mirrors Part A |
Note that Part B is not workers compensation: injuries that should be covered by workers compensation are excluded to avoid duplication.
A non-family guest passenger riding in the insured's covered auto is injured. The same evening, the named insured is struck as a pedestrian by a passing car. Which medical-payments outcome is correct under Part B?
An insured carries $5,000 Med Pay per person. Two insured occupants are hurt, incurring $4,000 and $6,200 in medical bills. What does Part B pay in total?