3.3 Part B — Medical Payments Coverage

What MedPay Pays

Part B — Medical Payments Coverage (MedPay) pays reasonable and necessary medical and funeral expenses incurred because of bodily injury caused by an auto accident, sustained by an insured. It is first-party (it pays the insured's own people) and operates regardless of fault, which makes it different from Part A. The expense must be incurred within 3 years of the date of the accident; treatment that begins later, or bills that run past three years, fall outside coverage.

Covered expenses include:

• Hospital, surgical, and physician services
• Ambulance and emergency transport
• X-rays, dental, prosthetic devices, and necessary nursing
• Funeral services — which share the per-person limit, with no separate sublimit

Who Is an 'Insured' for Part B

'Occupying' is defined broadly as in, upon, getting in, on, out of, or off a vehicle — so a person hurt while loading the trunk or stepping out of the car is occupying it. Note the asymmetry: you and your family members are covered in any car and as pedestrians, but guests and other passengers are covered only inside your covered auto.

Typical Limits

Per-person limits are commonly $1,000, $2,500, $5,000, or $10,000. There is no per-accident aggregate — each injured insured can collect up to the full per-person limit, so a four-passenger crash can pay four full limits.

Coordination with Other Coverages

MedPay rarely pays alone; the exam expects you to order the layers:

1. Workers' compensation — primary; MedPay excludes course-of-employment injuries.
2. Personal Injury Protection (PIP) — primary in no-fault states; MedPay sits excess over PIP.
3. Health insurance — coordination depends on the health contract's own coordination-of-benefits language.
4. At-fault driver's liability — MedPay can pay first and then the insurer may subrogate in some states, but it does not subrogate against an insured under the same PAP.

Key Exclusions

• Injury while occupying a vehicle with fewer than four wheels (motorcycles, mopeds, ATVs).
• Public or livery conveyance use.
• Injury in the course of employment when workers' compensation is available.
• Injury while occupying an owned vehicle not insured under this policy (the insure-all-your-autos rule).
• Vehicle used as a residence or premises.
• War, nuclear hazard, or racing/speed contests.
• Occupying a vehicle without a reasonable belief of entitlement (e.g., a stolen car).

Exam trap: MedPay follows the person, not just the car. A named insured injured as a pedestrian in a parking lot, or riding in a friend's vehicle, is still covered — but never on a motorcycle.

Worked Example: Stacked First-Party Layers

Consider a family of four in a no-fault state with $5,000 MedPay and $10,000 PIP. All four are hurt in a covered crash. PIP responds first because state no-fault law makes it primary; suppose PIP pays each occupant's first $10,000 of medical bills. MedPay then sits excess, paying covered medical bills above the PIP benefit up to its $5,000 per-person limit for each insured, with no per-accident aggregate — so MedPay could pay as much as $20,000 across the four occupants.

If one occupant were instead hurt while delivering pizza for pay, MedPay would deny that person under the public-or-livery-conveyance exclusion even though the others remain covered. And if the same occupant had been injured riding a motorcycle, the fewer-than-four-wheels exclusion would bar MedPay entirely.

Why MedPay Still Sells in No-Fault States

Students often ask why anyone buys MedPay where PIP is mandatory. The answer is gap-filling: MedPay can cover the PIP deductible, co-pays, and expenses that exhaust the PIP limit, and it follows the family into states or vehicles where PIP would not apply. It is also valuable for the pedestrian and any-auto grant — a named insured struck while walking, or hurt riding in an uninsured friend's car, taps their own MedPay. Because it pays quickly and regardless of fault, MedPay reduces the pressure to sue and is frequently subrogated against the at-fault driver later (outside the same policy).

On the exam, treat MedPay as a small, fast, first-party supplement layered on top of PIP, workers' compensation, and health coverage — never as the primary payer when those other layers apply.

The Three-Year Window and the Occupying Test

Two defined limits trip up candidates. First, expenses must be incurred within three years of the accident date; a chronic condition that requires surgery four years later falls outside Part B even if clearly accident-related. Second, 'occupying' is defined as in, upon, getting in, on, out of, or off the vehicle, so coverage extends to someone hurt while loading the trunk, stepping onto the running board, or climbing out at the curb.

A person walking ten feet away from the car after fully exiting is no longer occupying it — though a named insured or family member struck there would still be covered under the separate pedestrian grant. Work through who is covered where: you and your family members are covered in any auto and as pedestrians, while a guest is covered only inside your covered auto. A neighbor injured riding in your car is covered; that same neighbor injured as a pedestrian elsewhere is not your MedPay's concern.

Keeping the person class and the location test straight resolves most Part B questions before the limit or coordination rules ever come into play.