6.3 Part B Medical Payments

Purpose and Trigger of Part B

Part B - Medical Payments Coverage pays reasonable and necessary medical and funeral expenses incurred because of bodily injury caused by an auto accident. The defining feature for the exam is that Part B is no-fault in operation: it pays regardless of who caused the accident. The insurer does not investigate negligence before paying medical bills.

Part B is first-party coverage (it protects the insured and certain passengers) in contrast to Part A, which is third-party liability. It functions as a fast, small-dollar benefit so injured occupants get care without waiting for a liability determination.

The Three-Year Expense Window

Covered expenses must be incurred within 3 years from the date of the accident. A bill for treatment that begins more than three years after the crash is not payable, even if causally related. This three-year limit is a frequently tested numeric.

Covered expenses include hospital, medical, surgical, X-ray, dental, prosthetic, ambulance, professional nursing, and funeral services. Note that Part B pays only medical-type costs — it does not pay lost wages, pain and suffering, or general damages. Those non-economic damages are recovered, if at all, through Part A against an at-fault party or through Part C UM/UIM. Confusing Med Pay with a broad bodily-injury benefit is a classic distractor on the exam.

Who Is Covered and Limits

Part B limits are written per person, per accident (e.g., $5,000 each person). Unlike Part A, there is no per-accident aggregate — each injured insured has access to the full per-person limit.

Two classes of insured are covered under Part B:

So a resident family member injured as a pedestrian by a car is covered under Part B; a friend injured as a pedestrian is not (the friend is covered only while occupying your covered auto).

Worked example: The named insured carries $10,000 Part B per person. He and a passenger are both hurt; the insured incurs $14,000 in bills and the passenger $6,000. Part B pays $10,000 for the insured (capped) and $6,000 for the passenger - $16,000 total - because each person draws on a separate per-person limit. The insured's remaining $4,000 might be sought from a liable party or his health plan.

Because there is no per-accident cap, a crowded vehicle can generate a large aggregate Med Pay payout — five injured insureds each drawing a $10,000 limit can cost the insurer up to $50,000 in a single accident. This makes Med Pay limits relatively inexpensive yet broad, and it explains why insurers exclude high-occupancy livery exposures (discussed next).

Exclusions and Coordination

Part B contains exclusions that prevent it from acting as broad health insurance. Medical Payments will not pay for injury:

• While occupying a vehicle with fewer than four wheels (e.g., a motorcycle).
• While the auto is used as a public or livery conveyance (ride-share gap, like Part A).
• Sustained while occupying a vehicle (other than your covered auto) furnished or available for regular use by an insured.
• Arising out of business use of a vehicle with fewer than four wheels, or while the vehicle is used in the auto business.
• During war, nuclear, or racing/speed-contest activity.
• Subject to workers compensation - WC is primary.

Coordination with Other Coverages

Part B may overlap with health insurance, Part A liability paid by an at-fault driver, and UM/UIM. The PAP contains an 'Other Insurance' condition: when more than one auto policy applies, Part B pays its share, and coverage on a non-owned auto is excess over other collectible auto medical payments. A common trap: Part B does not subtract what health insurance pays; it pays its own limit, but the insured cannot collect the same expense twice from coordinated sources where subrogation/anti-stacking rules apply by state.

Because Med Pay pays quickly and without regard to fault, it often functions as the first source of payment after an accident, with the insurer later subrogating against an at-fault driver's liability insurer where state law allows. Remember the hierarchy tested on the exam: Med Pay is primary for occupants of the covered auto, excess for an insured occupying a non-owned auto, and always secondary to workers compensation when the injury is work-related.

Med Pay vs. Liability vs. PIP

Part B (Medical Payments) is first-party, no-fault, and limited to the insured and occupants of the covered auto plus the named insured/family while occupying or struck by any auto as pedestrians. It pays regardless of fault, in contrast to Part A liability, which pays third parties only when the insured is legally responsible. In no-fault states, Personal Injury Protection (PIP) replaces or supplements Med Pay and adds lost wages and essential-services benefits that Med Pay does not provide.

Coordination and Subrogation

Med Pay is often excess over health insurance or coordinates with PIP; many states let the auto insurer subrogate or offset Med Pay against a liability recovery to prevent the insured collecting twice for the same medical bill. The limit is per person, typically $1,000-$10,000, and applies separately to each injured insured.

Who Is Covered — Quick Table

The three-year expense window means Med Pay covers reasonable medical/funeral expenses incurred within 3 years of the accident, a frequently tested number.