The insuring agreement of the auto medical payments endorsement (CA 99 03) is virtually identical to medical payments coverage under the personal auto policy. The insurer promises to pay "reasonable expenses incurred for necessary medical and funeral services" because of accidental bodily injury to an insured. Expenses for services rendered within three years from the date of the accident will be paid.

The following are "insureds" for auto medical payments:

1. The named insured and any family member while occupying any auto. They are also insureds if, as pedestrians, any auto strikes them. A family member is a person related to the named insured by blood, marriage, or adoption and residing in the named insured's household; it includes a ward or foster child. Occupying means "in, upon, getting in, on, out or off."

2. The final category of insured under this endorsement is anyone else occupying a covered auto or a temporary substitute auto. The endorsement says that a temporary substitute auto is in place of a covered auto that is out of service because of its breakdown, repair, servicing, loss, or destruction.

If the named insured is a corporation, partnership, or association, the first type of insured has no applicability. A corporation, for example, cannot sustain bodily injury, nor does it have any "family members." As mentioned earlier, this is one of the reasons that auto medical payments coverage is more popular with individual named insureds, to whom "you" and perhaps "family member" are relevant, than it is with corporations, partnerships, or associations.

The second type of insured—any person occupying a covered auto or a temporary substitute auto—has a potentially greater scope of application than the first type due to its omnibus nature. In fact, the only restrictions on coverage for the second type of insured are the exclusions noted on the form.

One of the principal exclusions eliminates coverage for injuries suffered by employees of the named insured. There is no coverage if those injuries arise out of and in the course of their employment. This exclusion does not apply to domestic servants not entitled to workers compensation benefits; for the purposes of the endorsement, a domestic employee is defined as a person engaged in household or domestic work performed principally in connection with a residence premises. However, the main point of the exclusion is that the injury must arise out of and in the course of employment. For example, if an employee has a company car and is using it on a Sunday afternoon to go to the store for personal reasons, that employee is not in the course of employment and the exclusion does not apply. The exclusion is meant to prevent the employee from receiving both medical payments and workers compensation. Therefore, if the employee is not entitled to workers compensation because he is not in the course of employment, he is entitled to medical payments, subject to any other applicable exclusion on the endorsement.

Business auto medical payments exclusions are similar to those in the medical payments coverage of the personal auto policy. However, CA 99 03 does not include three of the personal auto exclusions:

1. Bodily injury sustained by any insured while occupying any motorized vehicle having fewer than four wheels. The absence of this exclusion from the auto medical payments endorsement relates to the definition of auto found in standard commercial auto policies, which is not restricted to four-wheel vehicles.

2. Bodily injury sustained by any insured while occupying a covered auto used for a public or livery conveyance. Consequently, the auto medical payments endorsement does provide coverage, for example, for passengers in a taxi or a bus, as is quite appropriate for commercial auto insurance.

3. Bodily injury caused by nuclear reaction or radiation or radioactive contamination. However, the nuclear energy liability exclusion endorsement attached to the business auto policy, truckers policy, and garage policy does add a similar exclusion to the auto medical payments endorsement. It excludes "bodily injury resulting from the hazardous properties of nuclear material and arising out of the operation of a nuclear facility by any person or organization." The italicized terms, defined in the nuclear energy liability exclusion endorsement, limit the exclusion to more particular incidents than those within the more general scope of the personal auto exclusion.

In addition to the three omitted exclusions, another difference between the two forms is that the exclusion of business use in the personal auto medical payments section only vaguely resembles the auto business exclusion in the commercial auto medical payments endorsement. The personal auto exclusion applies to bodily injury to any insured while occupying a vehicle being used in the business of an insured, but does not apply to injury while occupying a private passenger auto, a pickup or van, or a trailer used with such a vehicle. The comparable exclusion in the commercial auto medical payments endorsement applies to bodily injury to an insured while working in a business—other than the named insured's—of selling, servicing, repairing, or parking autos.

The purpose of the exclusion is only to eliminate coverage for bodily injury to occupants of a covered auto while it is in the possession of a bailee for hire such as a parking lot or a garage. If the named insured is itself an auto business, the exclusion does not apply to persons occupying covered autos being used in the named insured's business. Thus, if an automobile dealer purchases auto medical payments coverage for the sake of customers who might test-drive or borrow dealership cars, the auto business exclusion does not apply.

Apart from the exclusions already discussed, the exclusions of CA 99 03 are stated briefly below:

1. Bodily injury sustained by an insured while occupying a vehicle located for use as premises.

2. Bodily injury sustained by the named insured or a family member while occupying or when struck by any vehicle—other than a covered auto—owned by the named insured or furnished or available for the named insured's regular use.

3. Bodily injury sustained by 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.

4. Bodily injury caused by declared or undeclared war, insurrection, warlike action, or any of their consequences.

5. Bodily injury to anyone using a vehicle without a reasonable belief of being entitled to do so.

With the December, 1993 edition of this endorsement, ISO added an exclusion dealing with the exposures of professional racing or stunting activities. That exclusion says, in part, that medical payments coverage does not apply to "bodily injury sustained by an insured while occupying any covered auto while used in any professional racing or demolition contest or stunting activity, or while practicing for such contest or activity". The exclusion goes on to say that the insurance also does not apply to any bodily injury sustained by an insured while the auto is being prepared for a racing, demolition, or stunting activity.

Regardless of the number of covered autos, insureds, premiums paid, claims made, or vehicles involved in the accident, the most that the insurer will pay for each insured injured in any one accident is the limit of insurance shown on the declarations page. Also, in order to correspond with the wording in the limit of insurance section on the business auto coverage form dealing with duplicate payments, CA 99 03 declares that "no one will be entitled to receive duplicate payments for the same elements of loss under this coverage and any liability coverage form, uninsured motorists coverage endorsement, or any underinsured motorists coverage endorsement".

Auto medical payments coverage is subject to the general conditions of the policy to which it is attached. However, the endorsement contains two amendments of general conditions:

1. The first amendment states that the general provision entitled "the transfer of rights of recovery against others to us." The insurer may not pursue subrogation for any payments made under this coverage.

2. The endorsement amends the phrase "other collectible insurance" to "other collectible auto medical payments insurance." Thus, with respect to a nonowned auto, auto medical payments coverage is excess over other collectible auto medical payments coverage only — not, for instance, over the insured's major medical insurance. Auto medical payments coverage is primary insurance with respect to bodily injury involving a covered auto. If there is other auto medical payments insurance that covers on the same basis, either excess or primary, the loss is shared through pro rata contribution, each company paying in the proportion that its limit of liability bears to the total of all applicable limits of liability.

The rating of auto medical payments coverage depends on the class of the insured vehicle. The ISO commercial lines manual outlines the appropriate rating methods.

Trucks and tractors are charged the corresponding premium shown on the state rate pages. The primary and secondary rating factors that apply to liability and physical damage base premiums, are not used in auto medical payments ratting trucks and tractors. For trailers, however, the base premium is multiplied by the primary rating factor but not the secondary.

Zone rated trucks and tractors—those regularly operated beyond 200 miles from their address of principal garaging—are charged the premium shown in the appropriate zone rating table; again, primary and secondary rating factors are not applied to this premium. Note that the only medical payments premium shown in the zone rating tables are for a $500 limit of liability. Requests for higher limits must be referred to the insurer. Zone rated trailers are rated in the same way, except that the primary rating factor is applied.

The premium shown on the state rate page in the commercial lines manual for private passenger types is used without application of rating factors.

The premium for an automobile in the public transportation class is determined by looking up the appropriate base premium in the state rate pages for public automobiles and multiplying the base premium by the auto's combined rating factor. The same rule is followed even if a public automobile is regularly operated beyond 200 miles from the address of principal garaging — so long as the automobile is a taxi, a limousine, a school bus, an urban bus, or a van used in a van pool. All other public vehicle types regularly operated beyond 200 miles are subject to regular zone rating, as described above.

Vehicles in the special types class are not rated uniformly. Thus, it is necessary to check the appropriate rule in the special types section of that CLM automobile division. Snowmobiles, for example, are charged a flat premium for a $500 limit of liability without regard to territory, and motorcycles must be referred to the company for medical payments rating. If the rule for a special type has no instructions for medical payments rating, the premium depends on how that vehicle's liability premium is developed from private passenger premiums, then the private passenger medical payments premium is charged. If, however, the insured vehicle's liability premium is developed from a truck's, tractor's, and trailer's premium, then as a matter of course, the medical payments premium for trucks, tractors, and trailers is charged.