6.2 Part A Liability and Supplementary Payments

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. The insurer also has the duty to defend any suit asking for such damages, hiring and paying defense counsel — even when the suit is groundless, false, or fraudulent.

The duty to defend ends once the insurer has paid the applicable limit of liability through a settlement or judgment. This is a tested point: defense costs are paid in addition to the limit, but defense obligations cease at exhaustion of the limit.

Who Is an Insured Under Part A

The term "insured" expands beyond the named insured:

• You or any family member for the ownership, maintenance, or use of any auto or trailer (not just the covered auto).
• Any person using your covered auto with reasonable belief they are entitled to do so (permissive use).
• Any person or organization legally responsible for acts of an insured while using a covered auto (vicarious liability), such as an employer.
• For non-owned autos, any person or organization responsible for the named insured's or family member's use, but only for that use.

Note the asymmetry: family members and the named insured are covered while driving any auto, but other permissive users are only insureds while using your covered auto.

Split Limits vs. Single Limit

Part A is written with either split limits or a combined single limit (CSL).

• Split limits appear as three numbers, e.g., 100/300/50: $100,000 BI per person, $300,000 BI per accident, $50,000 PD per accident.
• CSL is one number, e.g., $300,000, available for all BI and PD combined in one accident.

Worked split-limit example. Insured carries 100/300/50 and is at fault. Three claimants suffer BI of $120,000, $90,000, and $80,000, plus $60,000 PD.

• Claimant 1: capped at the $100,000 per-person limit (not $120,000).
• Claimants 2 and 3: $90,000 + $80,000 = $170,000, both under the per-person cap.
• BI subtotal = $100,000 + $90,000 + $80,000 = $270,000, within the $300,000 per-accident cap.
• PD: $60,000 capped at $50,000.
• Insurer pays $270,000 BI + $50,000 PD = $320,000; the insured owes the uncovered $20,000 BI + $10,000 PD = $30,000.

Supplementary Payments

Part A pays the following in addition to the limit of liability — they do not erode the BI/PD limit:

Trap: the $200/day is only for attendance at the insurer's request, and bail is capped at $250 — small numbers worth memorizing.

Key Part A Exclusions

Part A does not cover, among others:

• Intentional injury or damage caused by an insured.
• Property owned by or being transported by an insured.
• Property rented to, used by, or in the care of an insured (with a limited exception for a residence or private garage).
• Liability arising from use of a vehicle as a public or livery conveyance (ride-share carrying passengers for a fee), unless a share-the-expense car pool.
• Use of a vehicle without a reasonable belief of being entitled to use it.
• Vehicles with fewer than four wheels or designed mainly for off-road use.
• Damage covered under a nuclear energy liability policy.

Single Limit vs. Split Limit Liability

Part A liability can be written two ways, and the math differs sharply:

• Split limits like 100/300/50 mean $100,000 per person for bodily injury, $300,000 per accident for bodily injury (all people combined), and $50,000 per accident for property damage. No single injured person collects more than $100,000 for BI even if the per-accident limit is unused.
• Combined single limit (CSL) like $300,000 is one pool covering BI and PD in any combination per accident.

A worked split-limit item: three people are injured for $80,000, $120,000, and $40,000 under 100/300/50. The middle claimant is capped at $100,000, so the insurer pays $80,000 + $100,000 + $40,000 = $220,000, within the $300,000 per-accident cap.

Supplementary Payments

Part A also pays supplementary payments in addition to the liability limit, so they do not erode the limit available to claimants. These include defense costs and attorney fees the insurer incurs, the cost of bail bonds up to a stated amount, premiums on appeal bonds and bonds to release attachments, post-judgment interest, reasonable expenses the insured incurs at the insurer's request (including lost earnings up to a daily cap), and other reasonable expenses.

Because defense is provided outside the limit, a policy with a $50,000 limit may fund far more than $50,000 of total insurer outlay once defense is added - a commonly tested distinction.

Liability Exclusions That Surprise Insureds

Part A excludes intentional injury, liability assumed under contract (with exceptions), damage to property the insured owns or is using, use of a vehicle without a reasonable belief of permission, and - importantly - vehicles used to carry persons or property for a fee (taxi/livery), which is why traditional PAPs exclude ridesharing without a special endorsement. The PAP also excludes liability arising from using a vehicle in the auto business (repair shop, parking) and from racing. Recognizing these gaps explains why commercial auto, garage, and rideshare endorsements exist.