6.2 Part A Liability and Supplementary Payments
Key Takeaways
- Part A pays third-party bodily injury and property damage the insured is legally liable for, plus a duty to defend.
- Split limits read per-person BI / per-accident BI / per-accident PD (e.g., 100/300/50); CSL is one combined number.
- Supplementary payments — defense, $250 bail, $200/day lost earnings, post-judgment interest — are paid in addition to the limit.
- Permissive users of your covered auto are insureds; public/livery (ride-share) use is excluded.
- Intentional acts, owned/transported property, and workers'-comp-covered employee injuries are excluded.
Part A — Liability Coverage
Part A is the heart of the PAP. It pays damages for bodily injury (BI) and property damage (PD) for which an insured becomes legally responsible because of an auto accident. It is third-party coverage: it protects others harmed by the insured, not the insured's own injuries or vehicle. Part A also provides the insurer's duty to defend the insured, with defense costs paid in addition to the limit of liability.
Insureds Under Part A
Part A insureds are broader than the policy's core definitions:
- You and any family member, for any auto or trailer.
- Any person using your covered auto with permission.
- Any person or organization legally responsible for acts of a covered person while using a covered auto (vicarious liability) — e.g., your employer when you drive a covered auto on the job.
- For a non-owned auto, any person or organization liable for your or a family member's use, but only if they do not own or hire the auto.
Split Limits vs. Combined Single Limit
Liability limits are written two ways:
- Split limits appear as three numbers, e.g. 100/300/50, meaning $100,000 BI per person / $300,000 BI per accident / $50,000 PD per accident.
- Combined Single Limit (CSL) is one number, e.g. $300,000, available for any combination of BI and PD.
Worked split-limit example: Limits 100/300/50. The insured injures three people ($90,000, $120,000, $80,000) and causes $60,000 PD.
- Person 1: $90,000 (under $100k per-person cap) → pays $90,000.
- Person 2: capped at $100,000 (the $120k claim hits the per-person limit).
- Person 3: capped at $80k claim but per-person limit is $100k → pays $80,000.
- BI subtotal = $270,000, under the $300,000 per-accident cap → all paid.
- PD = $60,000 but the PD limit is $50,000 → insurer pays $50,000.
Total insurer payment = $90,000 + $100,000 + $80,000 + $50,000 = $320,000.
Supplementary Payments
Paid in addition to the limit of liability, and only when the insurer defends:
| Supplementary Payment | Limit / Note |
|---|---|
| Cost of defense (attorney fees) | No dollar limit |
| Up to $250 for bail bonds | Arising from an accident |
| Premiums on appeal/release-of-attachment bonds | Insurer not obligated to apply for bond beyond limit |
| Loss of earnings to attend trial/hearings at insurer request | Up to $200/day |
| Other reasonable expenses at insurer request | As incurred |
| Post-judgment interest | On the entire judgment until paid |
Exam point: supplementary payments do not erode the limit of liability.
Key Part A Exclusions
- Intentional injury or damage caused on purpose by an insured.
- Property owned by or being transported by an insured.
- Damage to property rented to, used by, or in the care of the insured (with a $0 exception for a residence/private garage damaged by a covered auto).
- Bodily injury to an employee of the insured covered (or required to be covered) under workers' compensation.
- Use of a vehicle as a public or livery conveyance (the ride-share/Uber trap — personal PAP excludes for-hire passenger transport).
- Using a vehicle without a reasonable belief of being entitled to do so.
- Vehicles with fewer than four wheels or designed for off-road use.
- Liability arising from the auto business (selling, repairing, parking) unless the insured is the named insured/family member.
What Part A Pays
Part A pays damages for bodily injury and property damage for which an insured becomes legally responsible because of an auto accident, and it provides the duty to defend (defense costs are paid in addition to the limit and end when the limit is exhausted by settlement or judgment). The limit can be written as a combined single limit (CSL) or as split limits (per person / per accident BI; per accident PD).
Supplementary Payments Under Part A
In addition to the limit, Part A pays several supplementary payments:
| Supplementary Payment | Detail |
|---|---|
| Defense costs | Paid in addition to the limit |
| Bail bonds | Up to a stated amount (e.g., $250) after an accident |
| Appeal bonds / bonds to release attachments | Premiums paid |
| Loss of earnings | Up to a daily amount to attend trial at the insurer's request |
| Other reasonable expenses | At the insurer's request |
| Post-judgment interest | On the entire judgment until paid |
The Major Part A Exclusions
Part A excludes: intentional injury or damage; damage to property owned, used, or in the insured's care/custody/control (other than a rented residence/garage); bodily injury to an employee (workers' comp belongs there); use as a public or livery conveyance (with a share-the-expense carpool exception and modern ride-share endorsements); business use of certain vehicles; using a vehicle without a reasonable belief of permission; and a vehicle (other than your covered auto) furnished or available for regular use.
Out-of-State and Financial-Responsibility Provisions
Part A includes an out-of-state coverage provision that automatically raises the policy's limits to meet a higher financial-responsibility or compulsory-insurance requirement when the insured drives in another state - the policy "reads up" to satisfy the visited state's minimum. The exam frequently pairs this with the other insurance rule (the PAP is excess over any other applicable liability coverage for a vehicle the insured does not own).
With split limits of 100/300/50, an insured injures two people for $150,000 and $90,000 and causes $70,000 in property damage. How much does Part A pay in total?
Which of the following is paid IN ADDITION to the Part A limit of liability?