6.2 Part A Liability and Supplementary Payments

Part A - Liability Coverage

Part A is the heart of the auto policy. It pays sums an insured becomes legally responsible to pay for bodily injury (BI) or property damage (PD) caused by an auto accident. Coverage is the insurer's promise to (1) pay damages on the insured's behalf and (2) provide a legal defense at the insurer's expense. The duty to defend ends once the limit of liability has been exhausted by payment of judgments or settlements.

Who Is an Insured Under Part A

The definition of "insured" for liability is intentionally broad to protect the public:

• You or any family member for the ownership, maintenance, or use of any auto or trailer (even a non-owned one).
• Any person using your covered auto with reasonable belief they are entitled to do so (permissive users).
• Any person or organization legally responsible for acts of a covered person while using a covered auto (e.g., an employer).

Trap: A family member driving a borrowed (non-owned) car is still an insured under your Part A. But a non-family permissive user is only covered while using your covered auto, not any auto they borrow.

Split Limits vs. Combined Single Limit

Limits are written two ways. Split limits appear as three numbers, e.g., 25/50/25:

• $25,000 per person for BI
• $50,000 per accident for BI (all injured persons combined)
• $25,000 per accident for PD

A Combined Single Limit (CSL) is one number covering BI and PD together, e.g., $100,000 CSL.

Worked example (split limits 25/50/25): A covered driver injures three people - claims of $20,000, $30,000, and $15,000 - and damages a $40,000 vehicle. The per-person cap of $25,000 reduces only nothing here on the $20k/$15k claims, but the $30,000 claim is capped to $25,000. Total BI = $20,000 + $25,000 + $15,000 = $60,000, but the $50,000 per-accident BI cap limits payment to $50,000. The $40,000 PD claim exceeds the $25,000 PD cap, so PD pays $25,000. The insured owes the uncovered $10,000 BI and $15,000 PD personally.

Supplementary Payments

Part A also pays certain costs in addition to the limit of liability - these do not erode the limit:

Trap: The $250 bail bond and $200/day loss-of-earnings figures are favorite numeric test items. Supplementary payments are outside the policy limit, so a $50,000 judgment plus $300 of post-judgment interest can result in the insurer paying more than $50,000.

Out-of-State Coverage and Limit Compliance

Part A contains an out-of-state coverage condition. If an accident occurs in a state that requires higher liability limits than the policy carries, the PAP automatically increases the insured's limits to meet that state's minimum financial-responsibility requirement. If a state requires a compulsory insurance or no-fault law, the policy provides the minimum required coverage for that state.

This condition keeps the insured legally compliant while traveling and is the reason an out-of-state accident question often hinges on the other state's minimums, not the home-state limits shown on the dec page.

Key Part A Exclusions

The insurer will not provide Part A liability coverage for the following common situations:

• Intentional bodily injury or property damage caused by an insured.
• Damage to property owned or being transported by the insured.
• Damage to property rented to, used by, or in the care of the insured (with a limited exception for a residence or private garage).
• Bodily injury to an employee of the insured covered (or required to be covered) by workers' compensation.
• Using a vehicle as a public or livery conveyance (a share-the-expense car pool is not excluded).
• Using a vehicle in the auto business (selling, repairing, servicing, parking) - though family members are still covered while using a covered auto in that business.

Trap: The car-pool carve-out means a regular share-the-expense carpool is covered, while driving for a taxi or rideshare-for-hire is excluded.

Limit of Liability Condition

The Limit of Liability condition caps what Part A pays no matter how many claims, vehicles, or insureds are involved. The most that will be paid for any one accident is the limit shown in the declarations. Having multiple covered autos on the policy does not stack liability limits, and the presence of more than one insured does not increase the limit.

Any amount payable under Part A is reduced by amounts paid to the injured person under any applicable workers' compensation law, preventing a double recovery. These anti-stacking and reduction rules are frequent exam items because students assume more vehicles equal more coverage.

Reading a Split-Limit Liability Loss

Part A's most common calculation involves split limits written as three numbers, e.g., 100/300/50: $100,000 bodily injury per person, $300,000 bodily injury per accident, and $50,000 property damage per accident. In a wreck injuring three people for $80,000, $120,000, and $40,000 with $30,000 in vehicle damage, the insurer pays $80,000 + $100,000 (capped) + $40,000 = $220,000 in BI (within the $300,000 per-accident cap) plus $30,000 PD.

A combined single limit (CSL) of $300,000 would instead pay all bodily injury and property damage from one undivided limit, often a better answer for a high-PD or high-single-injury fact pattern.