6.3 Part B Medical Payments

The no-fault nature of Part B

Part B - Medical Payments pays reasonable expenses for necessary medical and funeral services because of bodily injury caused by an auto accident. The defining exam point is that Part B pays regardless of fault. Unlike Part A, the injured insured does not have to prove anyone was negligent; this is a first-party benefit that responds quickly to the insured's own medical bills.

Two time-and-scope rules control payment:

• Expenses must be incurred within three years of the date of the accident.
• The limit is stated per person (for example $5,000 each person), not per accident, so each injured insured has a separate limit.

Who is an insured under Part B

Part B defines two insured groups:

1. You (the named insured) and any family member while:
   • occupying any motor vehicle (not just the covered auto), or
   • as a pedestrian when struck by a motor vehicle designed for use on public roads.
2. Any other person while occupying your covered auto.

The defined term occupying means in, upon, getting in, on, out of, or off a vehicle. So a passenger getting out of the covered auto who is then hurt is still "occupying" it. A family member walking to the store and struck by a car is covered as a pedestrian, even though no covered auto is involved, which surprises many candidates.

Per-person limit worked example

Assume Medical Payments limit of $5,000 each person. The insured and two passengers are hurt in one accident:

Total Part B paid = $9,500. Because the limit is per person, there is no single per-accident cap reducing the passengers' separate recoveries. Contrast this with a per-accident liability limit under Part A, which is shared across all claimants. A question that applies a single $5,000 cap to the whole accident is using a trap answer.

Coordination, excess status, and exclusions

Medical Payments often coordinates with other coverage. It may be written as excess over a non-owned vehicle's own Medical Payments coverage, and in states with Personal Injury Protection (PIP) or health insurance, claims may be offset to avoid double recovery for the same expense.

Principal Part B exclusions:

• Injury while the vehicle is used as a public or livery conveyance (taxi/ride-for-hire), with a share-the-expense carpool exception.
• Injury while occupying a vehicle with fewer than four wheels (motorcycles).
• Injury during the course of employment if workers' compensation is available.
• Injury while occupying a vehicle used in the auto business or for business use of a non-owned vehicle.
• Injury from war, nuclear hazard, or while the auto is located for use as a residence or premises.

Medical Payments versus liability bodily injury

Students confuse Part B with the bodily-injury portion of Part A. The distinction is the direction of payment and the role of fault:

Because Part B pays the insured's own people quickly and without a liability finding, it functions like a small first-party medical benefit that smooths the gap before a liability case resolves. It does not pay lost wages or pain and suffering, only reasonable medical and funeral expense.

Why Medical Payments is so cheap and so useful

Part B typically costs only a few dollars per term because limits are modest ($1,000 to $10,000 per person) and the insurer's exposure is bounded by the per-person cap and the three-year filing window. Its value on the exam is illustrative of first-party thinking: it protects the named insured's household and guests no matter who caused the crash.

A frequent trap pairs Part B with a motorcycle loss: a family member injured while riding a two-wheeled motorcycle is excluded because the vehicle has fewer than four wheels, even though the same person would be covered as a pedestrian or while occupying the covered auto. Read the vehicle type before applying the pedestrian rule, because the four-wheel requirement governs occupant claims.

The three-year window and reasonable-expense limit

Two built-in limits keep Part B narrow. First, only expenses incurred within three years of the accident date qualify; a chronic injury that generates bills in year four falls outside Part B even if the medical limit is not yet exhausted. Second, the insurer pays only reasonable charges for necessary services, so the insurer can dispute an inflated or unnecessary bill and pay the customary amount instead.

Funeral expense is included within the same per-person limit, not in addition to it. So if the per-person limit is $5,000 and a fatally injured insured incurs $4,200 in medical care plus $3,000 in funeral costs, the insurer still pays only $5,000 total for that person, because medical and funeral expense share the one per-person limit. Treating funeral expense as a separate add-on limit is a frequent miscalculation.