6.3 Part B Medical Payments

Purpose of Part B

Part B - Medical Payments (often called Med Pay) is first-party coverage that pays reasonable and necessary medical and funeral expenses caused by an auto accident, regardless of who was at fault. Because fault is irrelevant, Med Pay pays quickly - it does not wait for liability to be determined and carries no deductible.

Expenses must be incurred within three years of the date of the accident to be covered. Med Pay is excess over, and coordinates with, the covered person's health insurance in many states, preventing double recovery for the same bill.

Med Pay is valuable precisely because it sidesteps the fault question. After a two-car crash where liability is disputed for months, an injured insured can have surgery, physical therapy, and prescriptions paid immediately from Part B rather than waiting for litigation to resolve. When the at-fault party's liability insurer later pays, the insured's company may seek reimbursement through subrogation so the insured is not paid twice for the same medical bill.

Who Is a Covered Person

Part B defines a covered person more narrowly than Part A:

• You or any family member while occupying (in, on, getting in/out of) any motor vehicle, or while struck as a pedestrian by a motor vehicle designed for use on public roads.
• Any other person while occupying "your covered auto."

Notice the asymmetry: the named insured and family members are covered in any auto and even as pedestrians, while guests and passengers are covered only when in the insured's own covered auto. A passenger riding in the insured's borrowed rental who is hurt is not a Part B covered person if the rental is not a covered auto for that insured.

The word "occupying" is defined broadly to include being in, upon, getting in, on, out of, or off of a vehicle. This captures common boundary cases: a person changing a tire on the shoulder who is leaning against the car, or a passenger stepping out at a curb, both remain "occupying." The pedestrian extension is equally important - if the named insured is walking through a parking lot and is struck by a car, Part B responds even though no vehicle the insured owns was involved at all.

How the Limit Works - Per Person

Med Pay limits are stated per person, not per accident. If the limit is $10,000 per person and four people in the insured's covered auto are hurt, each has up to $10,000 available, for a potential $40,000 total.

This per-person structure is a favorite exam distinction from liability limits, which include a per-accident cap.

Med Pay vs. Personal Injury Protection (PIP)

In no-fault states, Med Pay is often replaced or supplemented by Personal Injury Protection (PIP). The key differences:

• Med Pay covers only medical and funeral expenses.
• PIP is broader, adding lost wages, essential-services (replacement-services) costs, and survivor benefits, and is mandatory in no-fault jurisdictions.

Both are first-party and do not depend on fault, but PIP's wage and services components make it the wider coverage. Candidates should not equate the two on the exam.

A further distinction: in a true no-fault state, an injured person looks first to their own PIP and may sue the at-fault driver only after crossing a statutory threshold (a dollar amount of medical bills or a verbal threshold such as permanent injury or disfigurement). Med Pay carries no such tort-suit restriction; it simply pays bills and leaves the injured person's right to sue intact. That is why Med Pay is sold mainly in traditional tort states, while PIP is the mandatory first-party coverage in no-fault jurisdictions.

Part B Exclusions

Medical Payments does not apply to bodily injury:

• While occupying a vehicle with fewer than four wheels (motorcycle exposure).
• While the vehicle is used as a public or livery conveyance (carpools remain covered).
• Sustained during the course of employment if workers' compensation benefits are available.
• While occupying a vehicle used in the auto business not owned by the insured.
• To a person using a vehicle without a reasonable belief of permission.
• While occupying a vehicle (other than the covered auto) owned by or available for regular use by the insured (the "owned-but-not-insured" trap).

The workers'-compensation exclusion is one examiners return to repeatedly. If a delivery driver is hurt in a covered auto while on the job and workers' compensation benefits are available, Part B does not pay - workers' comp is the exclusive remedy for that medical bill. Likewise, the fewer-than-four-wheels exclusion means a motorcycle, moped, or all-terrain accident is outside Med Pay, which is why riders need a separate motorcycle policy with its own medical coverage. Reading each exclusion against the fact pattern, rather than assuming Med Pay's "no-fault" nature makes it universal, is the key to scoring these questions.