Study guide
5.3 Part B: Medical Payments Coverage
Property & Casualty Insurance Exam
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1 Introduction
0.1 About the Property & Casualty Exam 0.2 How to Use This Course
2 Chapter 1: Insurance Fundamentals
1.1 Risk and Risk Management 1.2 Types of Risk 1.3 Principles of Insurance 1.4 The Insurance Contract 1.5 Policy Structure and Components
3 Chapter 2: Property Insurance Concepts
2.1 Property Coverage Basics 2.2 Perils, Hazards, and Exclusions 2.3 Valuation Methods 2.4 Coinsurance and Insurance to Value 2.5 Deductibles and Policy Limits
4 Chapter 3: Dwelling Policies
3.1 Dwelling Policy Overview 3.2 Dwelling Policy Forms (DP-1, DP-2, DP-3) 3.3 Dwelling Property Coverages 3.4 Dwelling Exclusions and Conditions
5 Chapter 4: Homeowners Policies
4.1 Homeowners Policy Overview 4.2 Homeowners Policy Forms (HO-2 through HO-8) 4.3 Section I: Property Coverages 4.4 Section II: Liability Coverages 4.5 Homeowners Exclusions 4.6 Homeowners Conditions 4.7 Common Homeowners Endorsements
6 Chapter 5: Personal Auto Policy
5.1 Personal Auto Policy Overview 5.2 Part A: Liability Coverage 5.3 Part B: Medical Payments Coverage 5.4 Part C: Uninsured/Underinsured Motorists 5.5 Part D: Physical Damage Coverage 5.6 PAP Exclusions 5.7 No-Fault Insurance and PIP
7 Chapter 6: Liability Insurance Concepts
6.1 Liability Insurance Basics 6.2 Negligence and Tort Law 6.3 Types of Legal Liability 6.4 Personal Umbrella Policies
8 Chapter 7: Commercial Property Insurance
7.1 Commercial Package Policy (CPP) 7.2 Building and Personal Property Coverage Form 7.3 Causes of Loss Forms 7.4 Business Income Coverage 7.5 Businessowners Policy (BOP)
9 Chapter 8: Commercial General Liability
8.1 CGL Policy Overview 8.2 Coverage A: Bodily Injury and Property Damage 8.3 Coverage B: Personal and Advertising Injury 8.4 Coverage C: Medical Payments 8.5 CGL Exclusions 8.6 CGL Limits and Conditions
10 Chapter 9: Commercial Auto Insurance
9.1 Business Auto Policy Overview 9.2 Covered Auto Designation Symbols 9.3 BAP Liability Coverage 9.4 BAP Physical Damage Coverage 9.5 Garage and Truckers Coverage Forms
11 Chapter 10: Workers Compensation
10.1 Workers Compensation Overview 10.2 Part One: Workers Compensation Insurance 10.3 Part Two: Employers Liability 10.4 Workers Compensation Exclusions 10.5 Other States and USL&H Coverage
12 Chapter 11: Other Commercial Lines
11.1 Inland Marine Insurance 11.2 Ocean Marine Insurance 11.3 Commercial Crime Insurance 11.4 Surety Bonds 11.5 National Flood Insurance Program 11.6 Professional Liability Insurance 11.7 Commercial Umbrella and Excess Liability 11.8 Boatowners and Personal Watercraft Insurance 11.9 Farm and Ranch Insurance 11.10 Mobile Home and Manufactured Housing Insurance 11.11 Title Insurance
13 Chapter 12: Insurance Regulations and Ethics
12.1 Producer Licensing 12.2 Producer Authority and Responsibilities 12.3 Unfair Trade Practices 12.4 Claims Settlement Practices 12.5 State Insurance Department 12.6 Penalties and Disciplinary Actions
5.3 Part B: Medical Payments Coverage
Key Takeaways Explain This Topic AI
Part B is first-party, no-fault coverage that pays reasonable and necessary medical and funeral expenses incurred within three years of the accident
Limits apply per person, not per accident, and run roughly $1,000 to $25,000 — low compared with Part A liability limits
The named insured and family members are covered while occupying any auto and as pedestrians struck by a motor vehicle; other occupants are covered only in the covered auto
Part B pays promptly without a fault determination, which is its key advantage over Part A
Part B excludes injuries while occupying a vehicle with fewer than four wheels, during business use of a non-covered vehicle, while using a vehicle as a residence, and during racing
Last updated: June 2026
What Medical Payments Coverage Is
Part B — Medical Payments (often called MedPay ) is first-party, no-fault coverage. It pays reasonable expenses for necessary medical and funeral services because of bodily injury caused by an auto accident — regardless of who was at fault. The expenses must be incurred within three years of the date of the accident, a tested detail.
- Feature Detail
- Coverage type First-party (pays the insured's own people)
- Fault None required — pays regardless of fault
- Speed Prompt; no wait for liability determination
- Limit basis Per person (not per accident)
- Expense window Must be incurred within 3 years of the accident
- What Part B Pays For
Covered services include doctor and hospital bills, surgery, X-rays and diagnostic tests, ambulance, professional nursing, prosthetic devices, dental treatment for accidental injury, and funeral expenses . It does not pay lost wages or pain and suffering — those are recovered through Part A from an at-fault party, or through PIP in no-fault states.
Who Is Covered
Part B distinguishes two groups:
"You" and family members are covered while occupying any auto (yours or a non-owned auto) and when struck as a pedestrian by a motor vehicle.
Any other person is covered only while occupying your covered auto .
- Person Your covered auto Non-owned auto As a pedestrian
- Named insured Yes Yes Yes
- Resident family member Yes Yes Yes
- Other occupant / guest Yes No No
Tested point: the named insured walking across a parking lot and struck by a car is covered under Part B. A casual passenger struck as a pedestrian in a separate incident is not — outside occupants get coverage only inside your auto.
How Limits Apply
Limits are per person . With a $5,000 Part B limit, every injured covered person has his own $5,000.
- Person Medical bills Part B pays
- You $8,000 $5,000 (capped)
- Passenger 1 $3,000 $3,000
- Passenger 2 $6,000 $5,000 (capped)
- Passenger 3 $2,000 $2,000
- Total $19,000 $15,000
There is no per-accident cap, so the insurer can pay far more than the stated limit in a multi-occupant crash.
Part B vs. Part A
- Feature Part B (Medical) Part A (Liability)
- Party First-party Third-party
- Pays whom You and your occupants Injured others
- Fault None required Insured must be liable
- Payment speed Immediate After liability is settled
- Lost wages / pain & suffering No Yes
- Typical limits $1,000 – $25,000 $25,000 – $500,000+
- Coordination and Subrogation
Part B is usually excess over any auto policy on a non-owned vehicle the insured is occupying, but primary when the insured is in his own covered auto. After paying, the insurer typically has a right of subrogation or reimbursement against an at-fault party so the insured does not collect twice for the same expense. In practice the payment order in a fault state is: (1) Part B / MedPay, (2) the insured's health insurance, (3) the at-fault driver's Part A liability.
Part B Exclusions
Part B does not cover bodily injury sustained:
- Exclusion Example
- Occupying a vehicle with fewer than four wheels Motorcycle injury
- Occupying a vehicle used as a residence Living in a converted van
- During business use of a vehicle the insured does not own Driving an employer's truck for work
- While the vehicle is used as a public or livery conveyance Operating as a taxi (carpool exception)
- During racing or speed contests Track-day crash
Occupying a vehicle owned by the named insured but not insured under the policy A second car left off the policy
Why Buy MedPay in a No-Fault World
In pure tort states, Part B is valuable because it pays the insured's and passengers' medical bills immediately, before any fault fight. In no-fault states, PIP already provides broader benefits, so MedPay is often sold as a smaller excess layer or to fill PIP gaps (for example, covering the PIP deductible or co-payments). Candidates should not confuse the two: MedPay never pays lost wages or essential services, while PIP does. The exam frequently pairs a MedPay fact pattern with a distractor that describes a PIP benefit such as lost income — recognizing that lost wages belong to PIP, not Part B, is the key.
MedPay and Health Insurance Coordination
MedPay generally pays without regard to other health coverage , but the insured's health plan may contain its own coordination-of-benefits or reimbursement language. A common real-world sequence in a fault state is: MedPay pays the immediate bills, the insured's health insurance covers amounts beyond the MedPay limit, and the at-fault driver's Part A liability ultimately reimburses through subrogation. Because MedPay pays fast and asks no fault questions, it is especially useful for deductibles and co-pays the health plan will not cover and for passengers who have no health insurance of their own.
Putting the Limit in Context
- Limit Realistic coverage Comment
- $1,000 A single minor ER visit Often inadequate
- $5,000 Diagnostics + short treatment Common middle choice
- $10,000 A moderate injury workup Recommended floor
- $25,000 Serious injury cushion Strong protection, low added premium
Because MedPay is per-person and relatively inexpensive, raising the limit from $1,000 to $10,000 usually adds only a modest premium while sharply improving protection for everyone in the vehicle. A producer who recommends only the lowest limit may leave passengers exposed — an E&O concern as well as an exam talking point.
Worked Pedestrian Scenario
The named insured is jogging and is struck by a passing car; medical bills total $7,000 and the Part B limit is $10,000. Because the named insured is covered as a pedestrian struck by a motor vehicle , MedPay pays the full $7,000 with no fault inquiry. If a friend of the insured had been struck in a separate incident while not occupying the insured's auto, that friend would receive nothing under this policy, since outside persons are covered only while occupying the covered auto.
Exam tip: Part B is sometimes called "MedPay." Remember its three anchors — first-party, no-fault, per-person — and the three-year expense window.