6.3 Part B Medical Payments
Key Takeaways
- Part B Med Pay is first-party, no-fault coverage for reasonable medical and funeral expenses incurred within three years of the accident.
- The limit applies per covered person, not per accident; common limits are $1,000-$10,000.
- You and resident family members are covered in any auto or as pedestrians; other occupants are covered only in your covered auto.
- Med Pay excludes lost wages, pain and suffering, and property - PIP in no-fault states adds wage and essential-services benefits.
Part B - Medical Payments Coverage
Part B (Medical Payments, or "Med Pay") is first-party coverage that pays reasonable and necessary medical and funeral expenses for covered persons injured in an auto accident — regardless of fault. There is no need to prove liability, which makes Med Pay a fast-paying coverage for treatment after a crash.
Med Pay is written as a per-person limit (common amounts: $1,000, $2,000, $5,000, or $10,000). The limit applies to each covered person in the accident, not to the accident as a whole. Expenses must be incurred within three years of the accident date.
Two Categories of Covered Person
| Category | Definition | Vehicles covered |
|---|---|---|
| You and family members | Named insured + resident relatives | While occupying ANY auto, or as a pedestrian struck by any motor vehicle |
| Other occupants | Any other person | Only while occupying "your covered auto" |
Note the asymmetry: you and family members are covered very broadly — even when riding in someone else's car or struck while walking — whereas guests and other passengers are covered only while in your insured vehicle. "Occupying" means in, upon, getting in, on, out, or off the vehicle.
How Med Pay Interacts
Med Pay overlaps with health insurance and other auto coverages, so coordination rules matter:
- Med Pay pays regardless of fault and may pay even when the insured is the at-fault driver.
- In a no-fault state, PIP (Personal Injury Protection) frequently replaces or supplements Med Pay; PIP can also cover lost wages and essential services, which Med Pay does not.
- Amounts an insured recovers under Part B that are also recovered under Part C (UM) or from a liable third party are subject to anti-stacking / non-duplication provisions — the insured cannot collect the same medical bill twice.
- Med Pay does not cover lost wages, pain and suffering, or property — only medical and funeral expense.
Key Exclusions
Part B does not pay when a covered person is injured:
- While occupying a vehicle with fewer than four wheels (motorcycle).
- While the auto is used as a public livery (taxi) — share-the-expense carpools remain covered.
- While occupying a vehicle used in the business of an insured (with exceptions for private passenger autos, pickups, and vans).
- During war, nuclear events, or while using a vehicle without reasonable belief of entitlement.
Worked example. A policy has $5,000 Med Pay per person. The insured and two passengers are hurt; bills are $4,200, $6,500, and $3,000. Because the limit applies per person, the insurer pays $4,200 + $5,000 (capped) + $3,000 = $12,200 total, even though each person shares the same $5,000 limit.
How Med Pay Recovers and Coordinates
Like Part A, Part B contains an other-insurance condition. For an owned auto, the policy is primary; for a non-owned auto an insured occupies, Part B is excess over the owner's Med Pay. When two policies on the same priority level apply, they share pro-rata.
Many insurers also assert subrogation on Med Pay: if the insured later collects from the at-fault party for the same medical bills, the Med Pay insurer may seek reimbursement so the insured is not paid twice for one expense. This dovetails with the non-duplication language that prevents collecting the identical medical loss under both Part B and Part C. Because Med Pay pays quickly and without fault, it often funds treatment before liability is settled, then recovers through subrogation.
Practical Positioning
Producers position Med Pay as a gap-filler for health-insurance deductibles, copays, and the medical costs of passengers who may have no health plan. Because the limit is modest and per-person, it is inexpensive relative to liability.
| Feature | Med Pay (Part B) | PIP (no-fault) |
|---|---|---|
| Fault required | No | No |
| Medical/funeral | Yes | Yes |
| Lost wages | No | Yes |
| Essential services | No | Yes |
| Typically mandatory | No (optional) | Yes in no-fault states |
In a tort state, Med Pay is the primary first-party medical benefit. In a no-fault state, PIP is mandated and Med Pay may be unavailable or written as a small add-on, because PIP already pays medical, wage, and essential-services benefits subject to the state's threshold rules.
Under Part B Medical Payments, which statement about a guest passenger riding in your covered auto is correct?
Part B Medical Payments differs from PIP in a no-fault state primarily because Med Pay does NOT cover which of the following?
Med Pay Coordination and the PIP Contrast
Part B Medical Payments pays reasonable and necessary medical (and funeral) expenses for covered persons injured in an auto accident, regardless of fault, usually within three years of the accident. Covered persons are the named insured and family members while occupying any auto or as pedestrians struck by a vehicle, plus any other person while occupying the covered auto. Med Pay is excess over other applicable coverage and is secondary in some coordination schemes.
In a no-fault (PIP) state, statutory Personal Injury Protection replaces or supplements Med Pay and may add wage loss and essential-services benefits that Med Pay does not — but Louisiana is a tort state, so Louisiana drivers rely on Part B Med Pay, not PIP.
Part B Exclusions and the Workers-Comp Boundary
Part B Medical Payments excludes injury sustained while the covered auto is used as a public or livery conveyance (ride-share/taxi), while occupying a vehicle with fewer than four wheels, during business use of certain vehicles, while the auto is used without reasonable belief of permission, and injuries covered by workers compensation. Med Pay is also excluded for injury sustained while occupying a vehicle furnished for regular use that is not the covered auto. The exam tests these boundaries — an Uber driver injured while carrying a fare is excluded under the standard PAP without a ride-share endorsement.