6.3 Part B Medical Payments

Part B: Medical Payments Coverage

Part B pays reasonable and necessary medical and funeral expenses incurred because of bodily injury caused by an auto accident and sustained by a covered person. Unlike Part A, Part B is first-party coverage and pays without regard to fault - the insured does not have to be legally liable, and the other driver's negligence is irrelevant. Expenses must be incurred and services rendered within three years of the date of the accident.

Who is a covered person under Part B

The definition of "covered person" differs from Part A:

• You or any family member while occupying (in, upon, getting in or out of) any auto or trailer, or as a pedestrian when struck by a motor vehicle designed for use on public roads.
• Any other person while occupying your covered auto.

Note the asymmetry: you and family members are covered as pedestrians and in any auto, but a non-family passenger is covered only while occupying your covered auto - not as a pedestrian and not in someone else's car.

Limit and how it applies

The Part B limit is stated as a single amount per person, per accident - commonly $1,000, $2,000, $5,000, or $10,000. The limit is the maximum the insurer pays for each covered person, so a single accident injuring four occupants of a covered auto can produce four separate payments up to the limit.

Worked example: a $5,000 med pay limit, four occupants with bills of $3,200, $6,500, $1,800, and $9,000. The insurer pays $3,200 + $5,000 (capped) + $1,800 + $5,000 (capped) = $15,000 total, because the limit applies separately to each person.

Key Part B exclusions

Medical Payments excludes bodily injury sustained:

• While occupying a vehicle with fewer than four wheels (motorcycles).
• While the covered auto is used as a public or livery conveyance (taxi).
• While occupying a vehicle (other than your covered auto) used in the auto business.
• During the course of employment if workers compensation benefits are required or available (occupational injury overlap).
• While occupying a vehicle used without a reasonable belief of entitlement to use it.
• While the vehicle is located for use as a residence or premises.
• Due to war, nuclear, or radioactive hazards.
• While occupying a vehicle (other than your covered auto) furnished or available for your regular use (the company-car/regular-use exclusion).

Coordination with other coverages

Med Pay frequently overlaps with health insurance, Part A liability, and Part C UM/UIM. The PAP contains an "Other Insurance" condition: for a vehicle you do not own, Part B is excess over any other applicable auto medical payments insurance. Med Pay can also coordinate with a liability recovery - if the insured collects damages from an at-fault party that include medical expenses already paid under Part B, the insurer is generally entitled to be reimbursed (no double recovery). Some states modify or prohibit this med-pay subrogation by statute, which is a state-law point worth confirming locally.

Med Pay vs. PIP - a common confusion

Medical Payments is a smaller, fault-neutral coverage limited to medical and funeral costs. Personal Injury Protection (PIP) is the broader no-fault coverage required in no-fault states; PIP can also pay lost wages, essential services, and survivor benefits in addition to medical expenses. On the exam, if a question mentions lost wages or no-fault statutory benefits, the answer is PIP, not Part B Med Pay. Med Pay is optional in most states and is purely a medical/funeral expense reimbursement.

Med Pay vs. PIP and the Wisconsin Angle

Part B Medical Payments pays reasonable medical and funeral expenses for covered persons injured in a covered auto accident, regardless of fault, within a stated time (commonly three years) after the accident, up to a modest per-person limit such as $5,000. It is not liability coverage; it is first-party no-fault-style protection for the insured's own people.

Because Wisconsin is a tort (at-fault) state, PIP is not mandatory; med-pay is the optional first-party medical coverage drivers buy. A covered person under Part B includes the named insured and family members while occupying any auto, and other persons while occupying the named insured's covered auto.

Why insureds buy Med Pay even with health insurance

Med Pay remains popular because it pays quickly, has no deductible or copay, and reimburses passengers who may have no health coverage of their own. It also covers expenses many health plans exclude or limit - ambulance transport, dental work from the crash, and funeral costs - and it can satisfy a hospital lien promptly so the insured is not chased for bills while a liability claim drags on. Because it pays regardless of fault, an insured injured in a single-car accident with no liable third party still recovers under Part B even though Part A and Part C would pay nothing.

Worked coordination example

Suppose an insured passenger incurs $8,000 in medical bills after a crash caused by another driver. The insured's own $5,000 Med Pay pays first without waiting for a liability determination. Later the at-fault driver's Part A liability settlement includes the full $8,000 of medical expenses. Under the PAP's reimbursement/non-duplication language, the Med Pay insurer is generally entitled to recover its $5,000 from that settlement, leaving the insured made whole but not paid twice. Where state law bars med-pay subrogation, the insured may keep both - so always confirm the local rule before answering a coordination question.