6.3 Part B Medical Payments

Part B — Medical Payments Coverage

Part B pays reasonable and necessary medical and funeral expenses incurred by an insured for bodily injury caused by an auto accident, regardless of fault. Because it ignores fault, Part B pays quickly and is often the first coverage to respond. Expenses must be incurred within three years of the accident.

Part B is a first-party coverage — it pays the insured's own people, not third parties. It is sometimes called "MedPay." In no-fault states, Personal Injury Protection (PIP) may replace or supplement MedPay, but on the national exam, treat Part B as the standard ISO MedPay coverage.

Who Is an Insured Under Part B

Part B defines "insured" in two ways:

1. You or any family member while occupying a vehicle, or as a pedestrian struck by a motor vehicle (or trailer). Notice family members are covered even in someone else's car and even when walking.
2. Any other person while occupying your covered auto — for example, a passenger or a permissive driver.

Trap: a non-family passenger is covered only while occupying your covered auto, whereas you and your family members are covered in any auto and as pedestrians.

Limits and How Part B Pays

Part B is written on a per-person basis — the limit (commonly $1,000 to $10,000) applies separately to each insured injured in the accident, not to the accident as a whole.

Worked example. A PAP has Part B limit of $5,000 per person. In one accident the named insured incurs $3,200, a family-member passenger incurs $6,500, and a non-family permissive passenger incurs $4,000.

• Named insured: $3,200 paid in full (under $5,000).
• Family-member passenger: $6,500 capped at $5,000.
• Non-family passenger (occupying the covered auto): $4,000 paid in full.
• Total Part B payout = $3,200 + $5,000 + $4,000 = $12,200, even though the per-person limit is only $5,000, because the limit applies separately to each person.

Key Part B Exclusions

Part B does not pay for bodily injury sustained:

• While occupying a vehicle with fewer than four wheels (motorcycles).
• While the covered auto is used as a public or livery conveyance (livery), except a share-the-expense car pool.
• While occupying a vehicle used in the business of an insured, other than a private passenger auto, pickup, or van.
• During war, nuclear, or radioactive events.
• While occupying a vehicle without a reasonable belief of entitlement to use it.
• While occupying a vehicle (other than your covered auto) furnished or available for regular use to you or a family member.

The "furnished for regular use" exclusion prevents using MedPay on a company car or a regularly borrowed vehicle that should carry its own coverage.

Part B vs. Other Coverages

Because Part B pays without regard to fault and overlaps with health insurance, many insureds carry modest limits; on the exam, remember it is excess or coordinated with other coverage depending on state rules, but the core ISO language pays reasonable expenses up to the per-person limit.

How Part B Medical Payments Works

Part B (Medical Payments) pays reasonable medical and funeral expenses for bodily injury caused by an auto accident, regardless of fault, incurred within three years of the accident. It is a first-party, no-fault-style coverage that pays quickly without the need to establish who caused the crash. Limits are modest and stated per person (commonly $1,000 to $10,000), and the coverage is in addition to any health insurance, although coordination and subrogation provisions may apply.

Who Is Covered and Where

Med Pay covers you and family members injured in any auto as occupants or as pedestrians struck by a vehicle, plus any other person occupying your covered auto. So a guest passenger in your car is covered, and you are covered if a car hits you while walking. It does not cover a family member injured while occupying a vehicle you own but did not insure under the policy, and it excludes injuries while the auto is used to carry persons or property for a fee, while occupying a vehicle used in the auto business, or during racing. The pedestrian-coverage point and the family-member-in-any-auto point are favorite exam items.

Med Pay vs. UM vs. Liability

Students confuse the three injury coverages. Part B (Med Pay) pays the insured's own medical bills regardless of fault. Part A (Liability) pays bodily injury the insured causes to others. Part C (UM/UIM) pays the insured's injuries when an at-fault driver has no or insufficient insurance. A clean test: if the injured person is the insured/passenger and fault is irrelevant, think Med Pay; if the injured party is a third party the insured hurt, think Liability; if the insured is hurt by an uninsured at-fault driver, think UM. Med Pay also serves as a quick gap-filler before a UM or third-party settlement is reached.