6.3 Part B Medical Payments

6.3 Part B Medical Payments

Part B - Medical Payments Coverage is a first-party, no-fault benefit that pays reasonable and necessary medical and funeral expenses incurred because of bodily injury caused by an auto accident. Unlike Part A, fault is irrelevant — Part B pays for the insured's and passengers' injuries regardless of who caused the crash. It functions as a quick-pay supplement to health insurance and is typically written with a low per-person limit such as $1,000, $2,000, $5,000, or $10,000.

Who and What Is Covered

Part B covers two groups:

1. The named insured and family members while occupying a motor vehicle (any auto, not just a covered auto) OR when struck as a pedestrian by a motor vehicle.
2. Any other person while occupying your covered auto — i.e., your passengers.

The per-person limit applies separately to each injured person. Expenses must be incurred and services rendered within 3 years of the accident date. Covered items include medical, surgical, X-ray, dental, ambulance, hospital, professional nursing, prosthetic, and funeral expenses.

Worked Limit Example

Med Pay limits are per person, per accident — they do not aggregate across occupants. Suppose the policy carries a $5,000 Med Pay limit and four occupants are hurt:

Total Part B payout = $14,300. Each person draws from a fresh $5,000 limit; there is no single per-accident ceiling on Med Pay the way there is for Part A BI.

Key Part B Exclusions

Medical Payments does NOT apply to bodily injury sustained:

• While occupying a vehicle with fewer than four wheels (motorcycle).
• While using a vehicle as a public or livery conveyance (ride-share for hire).
• While occupying a vehicle (other than your covered auto) furnished or available for regular use by you or a family member.
• During the course of auto-business employment.
• While the insured is using the vehicle without a reasonable belief of entitlement.
• From war, nuclear, or radioactive hazards.

The "vehicle available for regular use" exclusion mirrors Part A and prevents using the PAP to cover a company car the insured drives daily.

Coordination, Subrogation, and Stacking

Med Pay is excess over other applicable Med Pay or no-fault coverage in many states, and the insurer has a right of recovery (subrogation) against an at-fault third party to the extent it has paid. Most ISO PAP language lets the named insured stack Med Pay across multiple vehicles on the same policy only where state law permits. The exam distinguishes Med Pay (small, fault-free, fast) from Part A BI (fault-based, paid to third parties) and from PIP (broader no-fault including wage loss in no-fault states).

Med Pay vs. PIP — the No-Fault Distinction

In the dozen-plus no-fault states, mandatory Personal Injury Protection (PIP) replaces or supplements Med Pay and is broader. Knowing the difference is heavily tested:

PIP typically pays 80% of medical and a percentage of lost wages subject to a monthly maximum, while Med Pay reimburses only documented medical and funeral charges. An insured in a no-fault state may carry PIP plus optional Med Pay as a gap-filler for co-pays and deductibles. Because Med Pay is fault-neutral and fast, it pays even when the insured is 100% at fault.

Part B - Medical Payments Mechanics

Part B (Medical Payments) pays reasonable and necessary medical and funeral expenses, without regard to fault, for bodily injury to an insured caused by an auto accident, incurred within three years of the accident. It is a per-person limit (e.g., $1,000-$10,000) and applies regardless of who was at fault.

Who Is Covered and Where

Exclusions

Part B excludes injury while the insured is occupying a vehicle with fewer than four wheels (motorcycle), a vehicle used as a public or livery conveyance (rideshare-for-hire without endorsement), a vehicle used in the business of an insured (some commercial uses), while occupying a vehicle the insured owns but did not schedule, during war/nuclear, and racing.

Coordination With Health Insurance and PIP

Medical Payments is generally excess or coordinated with other valid coverage; in states with Personal Injury Protection (PIP) or no-fault, PIP may be primary and broader (covering wage loss and essential services), while Med Pay is narrower (medical/funeral only). Many insureds carry both, with the policy specifying the order.

Worked Example

An insured with $5,000 Med Pay is a passenger in a friend's car that crashes; the insured incurs $4,200 in hospital bills two months later. Because Med Pay is no-fault and applies to the insured as an occupant of any auto, the policy pays $4,200 regardless of who caused the crash, even though the at-fault driver's liability coverage might also eventually respond. If the bills had totaled $6,500, Med Pay would pay its $5,000 limit and the remainder would look to health insurance or the at-fault driver's Part A.