Property & Casualty Insurance Exam (National Portion)Casualty InsuranceMedium
A client's auto policy includes Medical Payments (Med Pay) coverage with a limit of $5,000. The insured is involved in an accident and incurs $3,000 in medical bills. Their passenger also incurs $2,500 in medical bills. How much would the Med Pay coverage pay in total for this incident?
- A$3,000
- B$5,500
- C$5,000
- D$2,500
Show answer & explanationAnswer & explanation
Correct answer: B. $5,500
Medical Payments coverage typically applies per person. So, the insured would receive $3,000 and the passenger would receive $2,500, totaling $5,500, as long as each amount is within the $5,000 per-person limit.
Why the other options are wrong
- A. This only covers the insured's expenses and ignores the passenger's covered expenses.
- C. This would be the case if the $5,000 limit applied per accident, which is not typical for Med Pay.
- D. This only covers the passenger's expenses and ignores the insured's covered expenses.
Medical Payments (Med Pay) Coverage
Optional auto insurance coverage that pays for reasonable and necessary medical and funeral expenses for the insured and their passengers, regardless of fault.
- No-fault coverage.
- Applies to the insured and any passengers.
- Covers medical, surgical, dental, x-ray, and funeral services.
- Limits typically apply per person, per accident.
Memory trick: Med Pay Puts People First.