Part A Liability and Supplementary Payments

The Part A insuring agreement

Part A - Liability promises that the insurer will pay damages for bodily injury (BI) or property damage (PD) for which any insured becomes legally responsible because of an auto accident, when liability arises out of the ownership, maintenance, or use of a covered auto. The insurer also has the right and duty to defend any suit asking for those damages, even if the suit is groundless, false, or fraudulent.

The duty to defend is itself valuable: defense attorney fees, court costs, and investigation are paid in addition to the policy limit. Once the insurer pays the limit in settlement or judgment, its duty to defend ends.

Split limits versus combined single limit

Most personal auto policies use split limits written as three numbers: BI each person / BI each accident / PD each accident. A 100/300/50 policy provides:

• Up to $100,000 for bodily injury to any one person.
• Up to $300,000 total bodily injury for all persons in one accident.
• Up to $50,000 for property damage per accident.

A Combined Single Limit (CSL) instead provides one pooled amount (for example $300,000) available for BI and PD combined per accident, giving more flexibility when one severe injury exceeds a per-person split limit.

Worked split-limit example

An insured with 100/300/50 causes an accident injuring three people - claims of $120,000, $90,000, and $70,000 - plus $60,000 in damage to another car.

• Person 1: claim $120,000, but the per-person cap is $100,000 -> insurer pays $100,000.
• Person 2: $90,000, under the per-person cap -> insurer pays $90,000.
• Person 3: $70,000, under the per-person cap -> insurer pays $70,000.
• BI subtotal = $100,000 + $90,000 + $70,000 = $260,000, which is under the $300,000 per-accident cap, so all three BI amounts are paid.
• Property damage: $60,000 claim but the per-accident PD cap is $50,000 -> insurer pays $50,000.

Insurer total = $310,000. The insured personally owes the uncovered excess: $20,000 (Person 1) + $10,000 (the car) = $30,000.

Supplementary Payments

Supplementary Payments under Part A are paid on top of the limit of liability for a covered claim. The standard list:

• Up to $250 for the cost of a bail bond required because of an accident.
• Premiums on appeal bonds and bonds to release attachments in a defended suit.
• Interest accruing after a judgment (post-judgment interest) until the insurer pays its limit.
• Up to $200 per day for loss of earnings when the insured attends hearings or trial at the insurer's request.
• Other reasonable expenses the insured incurs at the insurer's request.

Memorize the two dollar figures: $250 bail bond and $200/day lost earnings. These are common fill-in-the-number questions.

Major Part A exclusions

Part A does not cover:

• Intentional injury caused by an insured (no coverage for deliberate harm).
• Liability assumed under a contract beyond what would exist without it.
• Vehicles used as a public or livery conveyance (taxi/rideshare for hire without endorsement) - share-the-expense car pools are an exception and remain covered.
• Property owned, rented, or in the care/custody of the insured (damage to property you are transporting).
• Use of a vehicle the insured owns or has available for regular use but did NOT insure under this policy (the owned-vehicle exclusion - prevents covering a second owned car for free).
• Bodily injury to an employee in the course of employment (workers compensation exposure), except a domestic employee not entitled to comp.

The owned-but-not-insured exclusion is the single most tested Part A trap: the policy will follow the insured into a borrowed car, but not into another car the insured owns and chose not to schedule.

Single Limit vs. Split Limits

A CSL gives the most flexibility because a single large bodily-injury claim can use the whole limit. Under split limits, the per-person cap can leave a badly injured single claimant under-compensated even though the per-accident pool is large — a classic exam contrast.

Supplementary Payments

In addition to the limit, Part A pays supplementary payments: defense costs, premiums on appeal/release-of-attachment bonds, up to $250 per day for lost earnings to attend trial at the insurer's request, post-judgment interest, and bail bonds up to $250 arising from a covered accident. These are paid on top of the liability limit — a frequent "in addition to the limit" question.

Out-of-State and Other-Insurance Provisions

The PAP includes an out-of-state coverage provision: when an accident occurs in a state requiring higher liability limits or a compulsory no-fault/financial-responsibility law, the policy automatically provides at least the minimum that state requires. The other-insurance clause makes the policy excess when the insured drives a non-owned auto (the owner's policy is primary). Both provisions are tested in cross-border and borrowed-car fact patterns.

Worked Split-Limit Example

With 100/300/50 limits, a covered at-fault accident injures three people ($120,000, $90,000, $60,000) and causes $40,000 property damage. Per-person BI is capped at $100,000, so the first claimant's $120,000 is paid only to $100,000; the others ($90k, $60k) are within both caps but the $300,000 per-accident BI limit governs the total. Property damage of $40,000 is within the $50,000 PD limit. The per-person cap leaving the worst-injured claimant short is the standard split-limit lesson.