Part A Liability and Supplementary Payments

Part A - Liability Coverage

Part A is the core of the PAP. The insurer agrees to pay damages for bodily injury (BI) or property damage (PD) for which an insured becomes legally responsible because of an auto accident. Two duties flow from this insuring agreement:

1. The duty to pay damages the insured is legally liable for, up to the limit.
2. The duty to defend the insured in any suit seeking those damages, even if the suit is groundless, false, or fraudulent. The insurer may settle any claim it considers appropriate.

The duty to defend ends when the insurer has paid the full limit of liability through settlement or judgment. This is why limits matter beyond just the payout: high limits also buy a longer defense.

Who is an insured under Part A

The definition of 'insured' for liability is broad:

• You (the named insured) and any family member for the ownership, maintenance, or use of any auto or trailer - including a borrowed car.
• Any person using your covered auto with your permission (permissive use).
• Any person or organization legally responsible for the acts of a covered person while using a covered auto (for example, an employer when the insured runs an errand for work in a personal car).
• Any person or organization legally responsible for the named insured's or family member's use of any auto - but only for that person's covered use, not their other vehicles.

Split limits vs. combined single limit

Liability limits are written two ways:

• Split limits appear as three numbers, e.g. 100/300/50 (in thousands). The first number is the per-person BI maximum; the second is the per-accident BI maximum across all injured people; the third is the per-accident PD maximum.
• Combined single limit (CSL) is one number, e.g. $300,000, that applies to all BI and PD combined per accident.

Worked example (split limits 100/300/50): An insured at fault injures three people - claims of $150,000, $80,000, and $60,000 - and causes $40,000 of property damage. The first claimant is capped at the per-person limit of $100,000 (not $150,000). The other two are paid in full ($80,000 + $60,000 = $140,000). Total BI = $100,000 + $140,000 = $240,000, which is under the $300,000 per-accident cap, so all is paid. Property damage of $40,000 is under the $50,000 PD cap, so it is paid in full. Total Part A payout = $280,000, and the insured personally owes the remaining $50,000 to the first claimant.

Supplementary payments

Supplementary payments are paid in addition to the limit of liability - they do not erode it. The PAP lists:

• All defense costs the insurer incurs (attorney fees, investigation).
• Up to $250 for the cost of bail bonds required because of an accident.
• Premiums on appeal bonds and bonds to release attachments in a suit the insurer defends.
• Interest accruing after a judgment is entered (post-judgment interest).
• Up to $200 per day for loss of earnings when the insurer asks the insured to attend hearings or trial.
• Other reasonable expenses incurred at the insurer's request.

A classic exam point: a $250,000 judgment on a $100,000 limit means the insurer pays $100,000 of damages PLUS defense costs and post-judgment interest on top - the supplementary payments are not subtracted from the $100,000.

Key Part A exclusions

• Intentional injury caused by an insured.
• Property owned by or transported by the insured, and property rented to or in the care of the insured (with a limited exception for some rented residences/garages).
• Using a vehicle as a public or livery conveyance (taxi/rideshare for hire) - shared-expense carpools are not excluded.
• Vehicles used in the business of selling, repairing, servicing, storing, or parking autos (auto-business exclusion), with exceptions for the named insured's covered autos.
• Racing or speed contests on a track.
• Using a vehicle without a reasonable belief of being entitled to do so (e.g., an unauthorized driver).
• Liability assumed under a contract (with narrow exceptions).

Part A Liability — Single Limit vs. Split Limit Mechanics

Part A pays for bodily injury and property damage the insured becomes legally liable for from auto use. Written as split limits (e.g., 100/300/50), the per-person cap applies to each injured claimant, the per-accident BI cap pools all bodily injury, and the PD per-accident cap pays for damaged property. Written as a combined single limit (CSL), one number covers all BI and PD in the accident with no internal sublimits — better protection when a single claimant's injuries exceed a per-person split. A stem with two badly injured claimants and a low per-person split is designed to show the split-limit shortfall.

Who Is an Insured for Liability

Part A insures: (1) you and any family member for any auto; (2) any person using your covered auto with permission; (3) any person or organization legally responsible for acts of a covered person while using your covered auto; and (4) for any auto other than your covered auto, you or a family member, plus any person or organization but only for the named insured's or family member's use — protecting, for example, an employer only vicariously, not for the employer's own non-auto liability.

Supplementary Payments — Paid in Addition to the Limit

Part A pays the following above the liability limit: all defense costs, up to $250 bail bonds arising from a covered accident, premiums on appeal and attachment bonds, post-judgment interest, up to $200 per day for the insured's lost earnings to attend trial at the insurer's request, and other reasonable expenses the insured incurs at the insurer's request. Because these are extra-contractual, they do not erode the limit — a tested point when computing how much remains for claimants.

Key Part A Exclusions

Liability does not cover: intentional injury; property owned or being transported by an insured; property rented to, used by, or in the insured's care (with a small exception for a residence/garage rented to others); bodily injury to an employee during employment (workers comp territory); vehicles used as a public/livery conveyance (carve-out for share-the-expense carpools); using a vehicle without reasonable belief of permission; and business use of vehicles other than private passenger autos, pickups, or vans.

The owned-but-not-insured-vehicle exclusion stops an insured from buying one policy and driving a fleet uninsured.