6.3 Part B Medical Payments
Key Takeaways
- Part B pays reasonable medical and funeral expenses on a no-fault, first-party basis, typically $1,000-$10,000 per person.
- The limit is per person, per accident - not an aggregate - so multiple injured occupants can each recover up to the limit.
- Expenses must be incurred within three years of the accident to be payable.
- Covered persons: you and family members in any auto or as pedestrians, plus other occupants of your covered auto.
- Major exclusions include fewer-than-four-wheel vehicles, livery use, racing, war/nuclear, and vehicles furnished for your regular use.
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, regardless of fault. It is a no-fault, first-party coverage with a relatively low per-person limit, commonly $1,000 to $10,000 per person. Because it pays without litigation, it provides fast medical reimbursement to the insured and passengers and is often the first dollars paid after a crash.
Who is covered and how the limit applies
Two classes of covered persons:
- You and family members while occupying (or as pedestrians struck by) any auto or as a pedestrian.
- Any other person while occupying your covered auto (passengers and permissive users).
The Part B limit is stated per person, per accident - it is not a per-accident aggregate. If the limit is $5,000 and four people are hurt in your covered auto, each may collect up to $5,000, for a potential total of $20,000.
Time limit and what is covered
Medical and funeral expenses must be incurred within three years of the accident date to be payable. Covered expenses include hospital, surgical, X-ray, dental, ambulance, nursing, prosthetic, and funeral services. Part B is excess over - or coordinated with - PIP and health insurance in some states; an amendatory endorsement controls. A common worked example: a passenger with $7,200 of ER, imaging, and physical-therapy bills under a $5,000 Part B limit collects $5,000 from Part B, leaving $2,200 to be sought from health insurance or the at-fault driver's liability coverage.
Part B exclusions
Medical Payments does not cover bodily injury:
- Sustained while occupying a vehicle with fewer than four wheels.
- While the covered auto is used as a public or livery conveyance (carpools excepted).
- Sustained while occupying a vehicle used in the business of an insured (with exceptions for private passenger autos, pickups, vans).
- Occurring during war, nuclear hazard, or racing on a track.
- While occupying a vehicle (other than your covered auto) that is furnished or available for your regular use.
- To a person injured while using a vehicle without a reasonable belief of being entitled to do so.
Part B compared
It helps to distinguish the three injury coverages on the exam:
| Coverage | Fault required? | Whose injuries | Typical limit |
|---|---|---|---|
| Part A Liability (BI) | Insured at fault | Third parties | 25K-300K+ |
| Part B Medical Payments | No | You, family, passengers | 1K-10K per person |
| Part C UM/UIM (BI) | Other driver at fault | You, family, passengers | Matches liability |
Trap: Part B is per-person; do not multiply the limit by the wrong class of occupant, and remember the regular-use exclusion bars coverage in a non-owned vehicle you drive every day (such as an employer's car).
Med Pay vs. PIP and subrogation
In at-fault (tort) states, the PAP offers Part B Medical Payments. In no-fault (PIP) states, an amendatory endorsement replaces or supplements Med Pay with Personal Injury Protection, which is broader - it pays medical bills plus a portion of lost wages, essential services, and death benefits, subject to state limits. After Med Pay or PIP pays, the insurer holds a subrogation/reimbursement right against the at-fault party's liability coverage so the injured insured is not paid twice for the same loss. The exam frequently contrasts the narrow medical-only scope of Med Pay with the wider wage-and-services scope of PIP.
Coordination and the 'no double recovery' rule
Because Part B pays without regard to fault, an insured can collect Med Pay quickly and later recover from a liable third party - but the insurer's reimbursement clause and many state collateral-source rules prevent keeping both for the identical expense. A worked sequence: a passenger incurs $4,000 in bills, collects $4,000 from the insured's Part B, then settles a liability claim against the at-fault driver that includes those same medical costs; the Med Pay insurer is reimbursed from the settlement up to $4,000. Candidates should remember Med Pay is excess or coordinated under the endorsement, never a windfall.
An insured carries Part B Medical Payments of $5,000. Three passengers in the insured's covered auto are injured with medical bills of $6,000, $2,500, and $4,000. How much will Part B pay in total?
Which expense would Part B Medical Payments most likely deny?
How Part B Differs From PIP and Liability
Part B Medical Payments is first-party, no-fault coverage that pays reasonable medical and funeral expenses for the named insured and family members injured in any auto (as occupant or pedestrian) and for other occupants of the covered auto, regardless of fault, for expenses incurred within three years of the accident. It is a small, per-person limit (commonly $1,000-$10,000).
Comparisons that show up on the exam:
| Feature | Part B Med Pay | PIP / No-Fault |
|---|---|---|
| Fault required | No | No |
| Covers lost wages / services | No (medical/funeral only) | Often yes |
| Mandatory | Optional in most states | Mandatory in no-fault states |
| Subrogation | Generally none against own insurer | Varies by state |
Trap — no double recovery: Part B does not pay expenses already paid by the insured's PIP or health coverage where the policy coordinates benefits; the coverages are arranged so the insured is reimbursed once, not twice. Part B also does not apply to injuries sustained while the auto is used as a public livery/taxi, or to vehicles with fewer than four wheels.