6.3 Part B Medical Payments

The Medical Payments Insuring Agreement

Part B, Medical Payments, is a first-party, no-fault coverage. The insurer agrees to pay reasonable expenses incurred for necessary medical and funeral services because of bodily injury caused by an accident and sustained by an insured. Fault is irrelevant: the coverage responds whether the insured caused the crash, was an innocent passenger, or was a pedestrian struck by a car. Because it pays the insured's own people rather than third parties, Part B is conceptually the opposite of Part A.

Limits are written per person on the Declarations, commonly $1,000, $2,000, $5,000, or $10,000. Note the limit applies to each insured injured, not to the accident as a whole, so a $5,000 limit can pay $5,000 to each of several covered passengers in the same crash.

Who Is Covered Under Part B

Part B defines "insured" in two groups:

1. "You" and any family member while occupying any auto, or while a pedestrian struck by a motor vehicle (or a trailer of any kind).
2. Any other person while occupying your covered auto with permission.

Notice the asymmetry that parallels Part A: the named insured and family members are protected in any auto and even as pedestrians, while outside passengers are covered only inside the covered auto.

The word "occupying" is defined broadly to mean in, upon, getting in, on, out, or off the vehicle, which captures injuries while loading, exiting, or standing on a running board.

The 3-Year Incurral Window

Covered expenses must be incurred within 3 years from the date of the accident. An expense billed in year four for an injury from the original crash is outside the coverage. This time limit is a frequent exam distractor against "1 year" and "5 years."

Coordination With Other Coverages

Med Pay frequently overlaps other coverages, and the exam tests the priority:

• In no-fault states, mandatory Personal Injury Protection (PIP) may be primary, with Med Pay excess or unavailable.
• Med Pay typically pays regardless of the insured's health insurance, although the insurer may have subrogation or coordination rights depending on state law.
• After a serious injury, the insured may also recover under Part A (if another insured is liable) or Part C (uninsured/underinsured motorist). Med Pay can pay quickly, then the insurer coordinates to prevent double recovery.

Trap: Med Pay is not liability coverage and does not pay the other driver. It pays the insured and the insured's passengers, period.

Worked Coordination Example

An insured with $5,000 per person Med Pay is injured as a passenger in a friend's car struck by an at-fault driver. The insured incurs $8,000 in medical bills.

• The insured is a "you" insured occupying any auto, so Part B applies. It pays the first $5,000 (the per-person limit).
• The remaining $3,000, plus pain and suffering, is pursued against the at-fault driver's liability insurer (a third-party claim) or, if that driver is uninsured, under the insured's Part C.
• The insured does not collect twice for the same $5,000; the Med Pay insurer may seek reimbursement from the liability recovery where state law permits.

Key Part B Exclusions

Part B will not pay for bodily injury sustained:

• While occupying a vehicle with fewer than four wheels (such as a motorcycle).
• While occupying your covered auto when it is used as a public or livery conveyance (the share-the-expense car pool exception applies).
• While occupying a vehicle used in the business of an insured, other than a private passenger auto, pickup, van, or trailer.
• During the course of employment if workers compensation benefits are required or available.
• While occupying a vehicle, located for use as a residence or premises.
• Arising from war, nuclear hazard, or racing on a track.

Med Pay Versus Liability BI: A Comparison

Students routinely confuse Part A bodily injury and Part B Med Pay. The distinction is who is paid and whether fault matters.

Med Pay therefore acts as quick, no-questions-asked first-aid money for the insured's household and passengers, while Part A handles the larger and slower process of compensating outsiders the insured has injured.

Why Insureds Buy Med Pay Even With Health Insurance

Med Pay remains valuable even for an insured with strong health coverage. It pays deductibles and copays the health plan imposes, covers passengers who may have weaker health insurance, pays funeral expenses that health insurance excludes, and settles quickly without waiting for a liability determination. In states where Med Pay coordinates with health insurance, the agent should explain the order of payment so the insured is not surprised by subrogation. For modest premium, Med Pay closes gaps that a liability-only buyer would otherwise carry personally.