6.3 Part B Medical Payments
Key Takeaways
- Part B Medical Payments (Med Pay) is a first-party, no-fault coverage that pays reasonable and necessary medical and funeral expenses incurred within three years of an auto accident.
- Med Pay limits are written per person (for example $5,000 or $10,000 each person) and apply separately to each insured injured in an accident, not per accident.
- Insureds for Med Pay are the named insured and family members while occupying any auto or as pedestrians struck by a motor vehicle, plus any other person while occupying the named insured's covered auto.
- Med Pay pays regardless of fault and stacks with health insurance, but the insurer has a right of reimbursement (subrogation) to prevent the insured from collecting twice.
- Key exclusions include injury while occupying a vehicle used as a public or livery conveyance, injury during business use of certain vehicles, and injury sustained while occupying a vehicle with fewer than four wheels.
What Part B Medical Payments Covers
Part B - Medical Payments Coverage, often called Med Pay, is a first-party coverage: it pays the insured's own medical bills rather than a third party's. It is also a no-fault coverage - it pays regardless of who caused the accident.
Med Pay reimburses reasonable expenses for necessary medical and funeral services because of bodily injury caused by an auto accident. The expense must be incurred within three years of the accident date. Covered services include physician, hospital, surgical, X-ray, dental, ambulance, nursing, prosthetic, and funeral expenses.
Who Is Insured Under Part B
The definition of insured for Med Pay is two-tiered:
| Category | Covered when... |
|---|---|
| Named insured and family members | Occupying any auto (owned or non-owned), or struck as a pedestrian by any motor vehicle |
| Any other person | Only while occupying the named insured's covered auto |
"Occupying" means in, upon, getting in, on, out, or off the vehicle.
Trap: The named insured and family members carry Med Pay with them as pedestrians struck by a car, and into any vehicle they occupy. An outside passenger is covered only inside the named insured's covered auto - the same broad-versus-narrow split that governs Part A.
How the Limit Applies
Med Pay limits are written per person, such as $5,000 each person or $10,000 each person. The limit applies separately to each insured injured in the accident; it is not a per-accident cap.
Worked example: A PAP carries $5,000 Med Pay each person. The named insured and two passengers are injured in a covered auto, incurring $4,200, $6,500, and $3,000 in medical bills. Med Pay pays $4,200 + $5,000 + $3,000 = $12,200. The second passenger's bills exceed the per-person limit, so $1,500 is unpaid by Med Pay. There is no single shared cap that would reduce the other two payments.
Coordination With Other Coverage
Med Pay is designed to fill gaps and pay quickly, but it does not let the insured profit:
- Health insurance: Med Pay generally pays even if the insured also has health coverage. To prevent double recovery, the insurer reserves a right of reimbursement if the insured later recovers from a third party for the same expenses.
- Part C (Uninsured Motorists): When an uninsured at-fault driver causes injury, Med Pay can pay first and the insurer may offset amounts later collected under Part C so the insured is not paid twice for the same bill.
- Other auto Med Pay: For a non-owned auto, the named insured's Med Pay is typically excess over the owner's Med Pay.
Worked example: An insured's Med Pay pays $5,000 of crash injuries. The insured later wins $25,000 from the at-fault driver's liability insurer, of which $5,000 covers the same medical bills. Under the right of reimbursement, the Med Pay insurer recovers its $5,000, so the insured nets the bills paid once, not twice.
Major Part B Exclusions
The principal Med Pay exclusions parallel several Part A exclusions:
- Injury while occupying a vehicle used as a public or livery conveyance (carrying persons or property for a fee); share-the-expense car pools are not excluded.
- Injury during the course of certain business use of a vehicle that is not a private passenger auto, pickup, or van.
- Injury while occupying a vehicle (other than the covered auto) furnished for the named insured's regular use.
- Injury sustained while occupying a vehicle with fewer than four wheels (motorcycles, mopeds).
- Injury occurring during racing or while the vehicle is used in any organized speed contest.
- Injury covered by a nuclear energy liability or a workers' compensation law.
Trap: A workers' compensation injury is excluded under Med Pay because the work-injury system is the proper payer. Watch for fact patterns where the insured was injured while working - the answer routes to workers' comp, not Med Pay.
Why Med Pay Is Tested
Med Pay carries a low premium (often a few percent of the auto premium) but generates many exam questions because it forces the candidate to distinguish first-party from third-party coverage and no-fault from liability. Remember the three anchors: it is first-party, it pays regardless of fault, and the limit is per person, not per accident.
Pair these anchors with the broad-versus-narrow insured rule and the three-year incurral window, and most Part B questions resolve quickly. In no-fault states, Med Pay is frequently replaced or supplemented by mandatory Personal Injury Protection (PIP), which can add wage loss and essential-services benefits not found in standard Med Pay.
A PAP provides $10,000 Med Pay each person. Three insureds are injured in one covered-auto accident with bills of $8,000, $12,000, and $4,000. How much does Part B Medical Payments pay in total?
Why does the Medical Payments insurer reserve a right of reimbursement when the insured later recovers the same medical expenses from an at-fault driver?
Part B Medical Payments - Who and What It Covers
Part B of the Personal Auto Policy pays reasonable and necessary medical and funeral expenses for bodily injury caused by an auto accident, on a no-fault basis and within a stated time after the accident (commonly three years).
| Insured under Part B | Covered while |
|---|---|
| You and family members | Occupants of any auto, or struck as a pedestrian |
| Any other person | Occupying your covered auto |
Part B pays regardless of who was at fault, which makes it fast first-party coverage that often pays before liability is sorted out.
Exam Trap: Part B does not cover injury sustained while the insured is occupying a vehicle used as a public/livery conveyance, while using a vehicle without a reasonable belief of permission, or during business use of certain vehicles. Because Part B is no-fault and modest (typical limits $1,000-$10,000 per person), it overlaps with health insurance; coordination-of-benefits rules decide which pays first. In no-fault states, Part B is often replaced or supplemented by Personal Injury Protection (PIP), which adds wage loss and essential-services benefits.