6.2 Part A Liability and Supplementary Payments

Part A — Liability Coverage is the heart of the PAP and the coverage Nevada law requires at minimum limits of 25/50/20. The insuring agreement states the insurer will pay damages for bodily injury (BI) or property damage (PD) for which any insured becomes legally responsible because of an auto accident. "Legally responsible" means liability must be established — Part A is a third-party coverage that responds when the insured negligently injures someone else or damages their property.

The insurer also has a separate duty to defend the insured against any covered suit, even one that is groundless or fraudulent. The insurer's right to defend or settle ends when it has paid the applicable limit of liability.

Split Limits vs. Combined Single Limit

Liability limits are written two ways.

• Split limits — shown as three numbers such as 100/300/50 (in thousands). The first number is the most paid per person for BI; the second is the most per accident for BI; the third is the most per accident for PD.
• Combined Single Limit (CSL) — one number, such as $300,000, that applies to all BI and PD in a single accident with no internal sublimits.

Worked Split-Limit Example — 100/300/50

An insured carries 100/300/50 limits and is at fault in an accident on Interstate 15 that injures three people and damages a parked vehicle.

• Driver A: $130,000 in injuries — the policy pays $100,000 (capped by the per-person limit; the extra $30,000 is the insured's personal exposure).
• Driver B: $90,000 in injuries — paid in full, $90,000.
• Driver C: $40,000 in injuries — paid in full, $40,000.
• Total BI paid by the insurer = $100,000 + $90,000 + $40,000 = $230,000, which is under the $300,000 per-accident BI cap, so no further reduction.
• Property damage to the parked car: $60,000 — the policy pays $50,000 (the PD per-accident cap), leaving $10,000 uninsured.

Trap: The per-person limit is applied first, then the per-accident BI limit caps the total of all injury claims. PD is always separate and never borrows from the BI limits.

Worked Split-Limit Example — Nevada 25/50/20

A Reno driver carries only the Nevada minimum 25/50/20 and rear-ends a car carrying two occupants.

• Occupant 1: $18,000 in medical specials and general damages — paid in full ($18,000).
• Occupant 2: $35,000 in damages — capped at $25,000 per person.
• Total BI = $18,000 + $25,000 = $43,000 (under the $50,000 per-accident cap).
• Damage to the other vehicle: $28,000 — Part A pays $20,000 PD; the insured owes the remaining $8,000 out of pocket unless other coverage exists.

This scenario is why producers recommend limits above the state floor — minimum limits exhaust quickly in moderate collisions.

Who Is an Insured Under Part A

Part A defines "insured" broadly:

• You and family members while using any auto.
• Any person using your covered auto with permission.
• Any person or organization vicariously liable for the conduct of a covered person (e.g., an employer when an employee drives the insured's covered auto on an errand).

Supplementary Payments — Paid in Addition to the Limit

The most-tested feature of Part A is that certain costs are paid on top of the liability limit, not within it.

Worked example. An insured with a $100,000 per-person limit is sued. The insurer defends, spends $18,000 in attorney fees, and the jury awards the claimant $100,000 in bodily injury damages. The insurer pays $118,000 total — the full limit to the claimant plus $18,000 defense as supplementary payments. Defense does not erode the limit.

Major Part A Exclusions

Part A does not cover:

• Intentional injury or damage caused at the insured's direction.
• Property owned, transported, rented to, or in the care of the insured.
• Bodily injury to an employee in the course of employment (workers compensation handles it), except a domestic employee not covered by WC.
• Using a vehicle as a public or livery conveyance — carrying persons or property for a fee (ride-share and delivery need endorsements).
• A vehicle used in the auto business (repair, servicing, parking) by someone other than the named insured or family.
• Vehicles with fewer than four wheels or designed mainly for off-road use.
• Operating in a prearranged or organized racing or speed contest on a track.

Out-of-State Coverage

The out-of-state coverage provision automatically increases the insured's limits to satisfy a higher compulsory or financial-responsibility minimum in another state where the accident occurs. If the insured carries Nevada's $25,000 BI per person but is in a state requiring $30,000, the limit is read up to $30,000 for that accident. The provision never reduces limits below what the insured purchased.