5.3 Part B: Medical Payments Coverage
Key Takeaways
- Part B is first-party, no-fault coverage that pays reasonable and necessary medical and funeral expenses incurred within three years of the accident
- Limits apply per person, not per accident, and run roughly $1,000 to $25,000 — low compared with Part A liability limits
- The named insured and family members are covered while occupying any auto and as pedestrians struck by a motor vehicle; other occupants are covered only in the covered auto
- Part B pays promptly without a fault determination, which is its key advantage over Part A
- Part B excludes injuries while occupying a vehicle with fewer than four wheels, during business use of a non-covered vehicle, while using a vehicle as a residence, and during racing
What Medical Payments Coverage Is
Part B — Medical Payments (often called MedPay) is first-party, no-fault coverage. It pays reasonable expenses for necessary medical and funeral services because of bodily injury caused by an auto accident — regardless of who was at fault. The expenses must be incurred within three years of the date of the accident, a tested detail.
| Feature | Detail |
|---|---|
| Coverage type | First-party (pays the insured's own people) |
| Fault | None required — pays regardless of fault |
| Speed | Prompt; no wait for liability determination |
| Limit basis | Per person (not per accident) |
| Expense window | Must be incurred within 3 years of the accident |
What Part B Pays For
Covered services include doctor and hospital bills, surgery, X-rays and diagnostic tests, ambulance, professional nursing, prosthetic devices, dental treatment for accidental injury, and funeral expenses. It does not pay lost wages or pain and suffering — those are recovered through Part A from an at-fault party, or through PIP in no-fault states.
Who Is Covered
Part B distinguishes two groups:
- "You" and family members are covered while occupying any auto (yours or a non-owned auto) and when struck as a pedestrian by a motor vehicle.
- Any other person is covered only while occupying your covered auto.
| Person | Your covered auto | Non-owned auto | As a pedestrian |
|---|---|---|---|
| Named insured | Yes | Yes | Yes |
| Resident family member | Yes | Yes | Yes |
| Other occupant / guest | Yes | No | No |
Tested point: the named insured walking across a parking lot and struck by a car is covered under Part B. A casual passenger struck as a pedestrian in a separate incident is not — outside occupants get coverage only inside your auto.
How Limits Apply
Limits are per person. With a $5,000 Part B limit, every injured covered person has his own $5,000.
| Person | Medical bills | Part B pays |
|---|---|---|
| You | $8,000 | $5,000 (capped) |
| Passenger 1 | $3,000 | $3,000 |
| Passenger 2 | $6,000 | $5,000 (capped) |
| Passenger 3 | $2,000 | $2,000 |
| Total | $19,000 | $15,000 |
There is no per-accident cap, so the insurer can pay far more than the stated limit in a multi-occupant crash.
Part B vs. Part A
| Feature | Part B (Medical) | Part A (Liability) |
|---|---|---|
| Party | First-party | Third-party |
| Pays whom | You and your occupants | Injured others |
| Fault | None required | Insured must be liable |
| Payment speed | Immediate | After liability is settled |
| Lost wages / pain & suffering | No | Yes |
| Typical limits | $1,000 – $25,000 | $25,000 – $500,000+ |
Coordination and Subrogation
Part B is usually excess over any auto policy on a non-owned vehicle the insured is occupying, but primary when the insured is in his own covered auto. After paying, the insurer typically has a right of subrogation or reimbursement against an at-fault party so the insured does not collect twice for the same expense. In practice the payment order in a fault state is: (1) Part B / MedPay, (2) the insured's health insurance, (3) the at-fault driver's Part A liability.
Part B Exclusions
Part B does not cover bodily injury sustained:
| Exclusion | Example |
|---|---|
| Occupying a vehicle with fewer than four wheels | Motorcycle injury |
| Occupying a vehicle used as a residence | Living in a converted van |
| During business use of a vehicle the insured does not own | Driving an employer's truck for work |
| While the vehicle is used as a public or livery conveyance | Operating as a taxi (carpool exception) |
| During racing or speed contests | Track-day crash |
| Occupying a vehicle owned by the named insured but not insured under the policy | A second car left off the policy |
Why Buy MedPay in a No-Fault World
In pure tort states, Part B is valuable because it pays the insured's and passengers' medical bills immediately, before any fault fight. In no-fault states, PIP already provides broader benefits, so MedPay is often sold as a smaller excess layer or to fill PIP gaps (for example, covering the PIP deductible or co-payments). Candidates should not confuse the two: MedPay never pays lost wages or essential services, while PIP does. The exam frequently pairs a MedPay fact pattern with a distractor that describes a PIP benefit such as lost income — recognizing that lost wages belong to PIP, not Part B, is the key.
MedPay and Health Insurance Coordination
MedPay generally pays without regard to other health coverage, but the insured's health plan may contain its own coordination-of-benefits or reimbursement language. A common real-world sequence in a fault state is: MedPay pays the immediate bills, the insured's health insurance covers amounts beyond the MedPay limit, and the at-fault driver's Part A liability ultimately reimburses through subrogation. Because MedPay pays fast and asks no fault questions, it is especially useful for deductibles and co-pays the health plan will not cover and for passengers who have no health insurance of their own.
Putting the Limit in Context
| Limit | Realistic coverage | Comment |
|---|---|---|
| $1,000 | A single minor ER visit | Often inadequate |
| $5,000 | Diagnostics + short treatment | Common middle choice |
| $10,000 | A moderate injury workup | Recommended floor |
| $25,000 | Serious injury cushion | Strong protection, low added premium |
Because MedPay is per-person and relatively inexpensive, raising the limit from $1,000 to $10,000 usually adds only a modest premium while sharply improving protection for everyone in the vehicle. A producer who recommends only the lowest limit may leave passengers exposed — an E&O concern as well as an exam talking point.
Worked Pedestrian Scenario
The named insured is jogging and is struck by a passing car; medical bills total $7,000 and the Part B limit is $10,000. Because the named insured is covered as a pedestrian struck by a motor vehicle, MedPay pays the full $7,000 with no fault inquiry. If a friend of the insured had been struck in a separate incident while not occupying the insured's auto, that friend would receive nothing under this policy, since outside persons are covered only while occupying the covered auto.
Exam tip: Part B is sometimes called "MedPay." Remember its three anchors — first-party, no-fault, per-person — and the three-year expense window.
Part B Medical Payments coverage is best described as which type of coverage?
Within how many years of the accident must medical expenses be incurred to be payable under Part B?
The named insured is walking through a parking lot and is struck by a car. Under Part B, the named insured's medical expenses are:
If a $5,000 Part B limit applies and three covered passengers are each injured, the limit applies: