6.3 Part B Medical Payments
Key Takeaways
- Part B Medical Payments is first-party, no-fault coverage that pays reasonable medical and funeral expenses for the insured and passengers injured in an auto accident.
- Covered expenses must be incurred within 3 years of the accident; the limit applies per person, not per accident.
- Two insured categories apply: 'you' and family members are covered as occupants of any auto and as pedestrians struck by a motor vehicle; other occupants are covered only while in your covered auto.
- Med Pay pays regardless of fault and can stack with health insurance, but the policy retains a right of reimbursement when the insured recovers from a liable party.
- Key exclusions include injury while the vehicle is used as a public livery, injury during business use of vehicles with fewer than four wheels, and war or nuclear hazard.
The Purpose of Medical Payments
Part B — Medical Payments is a first-party, no-fault coverage. It pays reasonable expenses incurred for necessary medical and funeral services because of bodily injury caused by an auto accident, without regard to who was at fault. Because fault is irrelevant, Med Pay typically pays faster than a liability claim and avoids the delay of proving negligence.
The coverage is per person — the stated limit (commonly $1,000 to $10,000) applies to each insured, not per accident. Covered services include hospital, surgical, dental, X-ray, ambulance, nursing, prosthetic, and funeral expenses. Critically, the expense must be incurred within three years of the date of the accident, even if it is not billed or paid until later.
Med Pay is small and inexpensive precisely because it is supplemental: it patches the gap before fault is determined and before health insurance or a liability settlement arrives. It is a frequent up-sell because the premium is low relative to the goodwill of paying a passenger's bills quickly.
Who Is Insured Under Part B
Part B uses two insured categories, mirroring Part A but tailored to occupants and pedestrians.
| Insured | Covered as occupant | Covered as pedestrian |
|---|---|---|
| Named insured ("you") and family members | In any auto | When struck by a motor vehicle |
| Any other person | Only while occupying your covered auto | Not covered |
So if the named insured is a passenger in a friend's car, or is struck while walking, Med Pay still responds. A guest passenger in the named insured's own car is covered, but that same guest is not covered by this policy while riding in someone else's vehicle.
How Med Pay Coordinates and Subrogates
Med Pay pays regardless of fault and may stack with the injured person's own health insurance — it is not strictly excess by its own terms, though many insurers coordinate to prevent double recovery. The PAP grants the insurer a right of reimbursement (subrogation): if an insured collects Med Pay and later recovers the same medical costs from a liable third party (or that party's liability insurer), the Med Pay insurer is entitled to be repaid to the extent of its payment, preventing a windfall.
Worked Example
A passenger in the named insured's car incurs $6,000 in hospital bills. The policy Med Pay limit is $5,000 per person. Med Pay pays $5,000; the passenger must seek the remaining $1,000 from the at-fault driver's liability coverage or other resources. If the passenger later wins $6,000 in BI damages from the at-fault driver, the Med Pay insurer is reimbursed its $5,000.
Part B Exclusions
Medical Payments does NOT apply to bodily injury:
- Sustained while occupying a vehicle with fewer than four wheels (motorcycles, ATVs).
- Sustained while a vehicle is used as a public or livery conveyance (taxi, ride-share for hire); ordinary share-the-expense carpools are excepted.
- Sustained while occupying a vehicle used in the auto business or business use of pickups/vans not owned by the insured.
- Occurring during war, nuclear hazard, or radiation.
- Sustained while the insured is occupying a vehicle (other than a covered auto) owned by or furnished/available for the regular use of the named insured or a family member — the "owned but not insured" or regular-use trap.
Trap: The regular-use exclusion blocks Med Pay when an insured is hurt in a car they own or regularly use but did not list on this policy — you cannot insure one car and claim Med Pay for injuries in an unlisted second car you regularly drive.
Med Pay vs. PIP and No-Fault States
Do not confuse Part B Medical Payments with Personal Injury Protection (PIP). Med Pay is a comparatively narrow coverage paying only medical and funeral expenses. PIP, used in true no-fault states, is broader — it can also pay lost wages, essential-services (replacement-services) costs, and survivor benefits, and it limits the right to sue for minor injuries.
In no-fault states the PAP is typically endorsed with a PIP form that may replace or sit alongside Med Pay. On the national exam, remember the contrast: Med Pay = medical/funeral only; PIP = medical plus income, services, and death benefits with tort limitations.
Other-Insurance and Limit Application
Like Part A, Med Pay contains an other-insurance clause. For the insured's own covered auto it is primary; while occupying a non-owned auto, this policy's Med Pay is excess over any other applicable medical payments coverage. The per-person limit is the most the insurer will pay for any one person in any one accident regardless of the number of policies, vehicles, claims, or insureds involved.
Worked Example
Three occupants of the insured's car are injured, each incurring $4,000 in bills. With a $5,000 per-person limit, Med Pay pays $4,000 to each — there is no per-accident cap, so the total paid is $12,000 across the three people, each within their own per-person limit.
Med Pay vs. Liability BI — The Fault Distinction
The defining Part B feature is that it pays without regard to fault. Compare it directly to Part A bodily-injury liability, which pays a third party only when the insured is legally responsible. Med Pay instead pays reasonable medical expenses for covered persons hurt in or around the insured auto within three years of the accident, up to the per-person limit, no lawsuit or liability finding required.
A clarifying exam pattern: a guest passenger is injured in a single-car accident the insured caused. Part B pays the passenger's medical bills immediately regardless of who was at fault; Part A would also respond, but only after liability is established. Because Med Pay is fast and fault-free, it functions as a first layer of medical protection that the slower liability process backstops.
The named insured is a pedestrian struck by a car while crossing the street. The named insured carries $5,000 Part B Medical Payments and was clearly not at fault. How does Med Pay respond?
Which feature distinguishes Part B Medical Payments from Part A Liability Coverage?