Auto Medical Payments is an optional coverage under a commercial auto policy. Like the Medical Payments coverage that is afforded by a general liability policy, Auto Medical Payments is not based on fault. Individuals covered as insureds under Auto Medical Payments can seek reimbursement for expenses without filing a lawsuit.

Auto Medical Payments coverage may be added to a commercial auto policy by way of an endorsement.

Most insurers that provide this coverage utilize the standard ISO endorsement. This endorsement is described below.

What's Covered?

The endorsement covers "reasonable" expenses for medical services incurred by an insured for bodily injury caused by accident. If the insured dies, the insurer will pay funeral expenses. Medical expenses are covered only if they are incurred for services rendered within three years from the date of the accident. For example, if the accident occurs on March 1, 2014, all medical services related to the accident must be provided by March 1, 2017.

Who Is An Insured?

The Auto Medical Payments endorsement includes its own "who is an insured" section. Like uninsured motorist coverage, Auto Medical Payments is essentially a personal auto coverage. It includes the following as insureds:

• You are an insured while occupying a vehicle or, while a pedestrian, when struck by any auto.  Under Medical Payments coverage, you means an individual (or a sole proprietor). No other type of business entity (such as a corporation or partnership) can "occupy" a vehicle or sustain bodily injury. Occupying means in, on or off, or getting in, on or off. In other words, you are covered whether you are inside the vehicle or in the process of entering or exiting it.

You are also an insured if you are hit by a car while on foot. You are covered if hit by any auto, meaning an auto you own, hire or don't own.

• If you are an individual,any family member is an insured while occupying or, while a pedestrian, when struck by any auto. Family member means a person related to you by blood, marriage or adoption who is a resident of your household. Family member includes a ward or foster child.
• Anyone else occupying a covered auto or a temporary substitute for a covered auto. A temporary substitute auto is a vehicle that being is used temporarily in place of a covered auto that is out of service because it has broken down, is lost or destroyed, or is undergoing repair or service. Anyone else means anyone other than you or a family member.

What's Not Covered?

The Auto Medical Payments endorsement does not cover bodily injury sustained by any of the following:

• An insured while occupying a vehicle located for use as a premises. For instance, suppose that you are using a trailer you own as your living quarters until a house you are building is completed. If you are injured in the trailer, your insurer will not pay your medical expenses.
• You or any family member while occupying or struck by any vehicle owned by you or furnished or available for your regular use, if that auto is not a covered auto. For example, suppose you have a side job selling life insurance. The life insurance company provides you a vehicle to use for your sales activities. The vehicle is not a covered auto under your commercial auto policy. If you or one of your family members is injured in or by the sales vehicle, any medical expenses you or that family member incurs will not be covered.
• Any family member while occupying or struck by any vehicle (other than a covered auto) owned by or furnished or available for the regular use of any family member. This exclusion is similar to the previous one except that it applies to a vehicle owned by or furnished to a family member.
•  Your employee arising out of and in the course of employment by you. This is a key exclusion since it eliminates coverage for your employees. Expenses incurred by workers injured on the job should be covered by workers compensation insurance. Auto Medical Payments does cover bodily injury to a domestic employee of yours if he or she is not entitled to workers' compensation benefits. Domestic employee means someone engaged in household or domestic work performed principally in connection with a residence premises.
• An insured while working in a business of selling, servicing, repairing or parking autos unless that business is yours. Anyone working in an auto-related business you don't own is not covered.
• War, Racing These are outside the scope of coverage.
•  Anyone using a vehicle without a reasonable belief that he or she is entitled to do so. A person who knowingly uses a vehicle he or she isn't allowed to use is not covered.

Limits

Auto Medical Payments Coverage includes a bodily injury limit that applies to "each "insured" injured in any one accident. For example, suppose the Auto Medical Payments limit on your auto policy is $10,000. Both you and Fred, a customer of yours, are injured in a covered auto you are driving. If Fred incurs $8,000 in expenses and you incur $12,000, your insurer will pay $8,000 for Fred and $10,000 for you.

Duplicate Benefits

No one will receive duplicate payments for the same injury under Auto Medical Payments and Liability Coverage or uninsured or underinsured motorist coverage. In the previous example, suppose that you and Fred are injured in an accident when your covered auto is hit by an uninsured motorist. If you and Fred receive compensation for your injuries under UM coverage, you will not receive anything under Auto Medical Payments.

No Subrogation

The subrogation clause in the commercial auto policy does not apply. If your insurer makes a payment to an insured under Auto Medical Payments, it will not try to recover its payment by suing the party responsible for the insured's injury.

Who Needs Auto Medical Payments?

You should consider Auto Medical Payments if you are a sole proprietor or if your vehicles are often used to transport passengers who are not your employees. Because insured parties need not sue to obtain compensation, Auto Medical Payments may prevent some lawsuits.