3.7.1 Direct Actions

• Jurisdiction: Arizona

Automobile and homeowner policies provide for medical payments coverage. This is a no fault type coverage where the obligation to pay and/or reimburse expenses is not dependent upon fault.

Standard automobile policies provide medical payments coverage. The insuring agreement for this coverage provides that the insurance company will pay reasonable expenses incurred for necessary medical and funeral services because of "bodily injury" which is caused by an accident and which had been sustained by an "insured." Typically the insured is defined as a family member (person related to the insured by blood, marriage or adoption who is also a resident of the insured's household) while occupying an insured vehicle or as a pedestrian when struck by a motor vehicle designed for use mainly on public roads. All other persons would be covered for medical payments benefits while occupying the insured vehicle only. Automobile medical payments coverage typically has an associated panoply of exclusions. These exclusions include bodily injury which is sustained while occupying motorized vehicles with fewer than four wheels, occupying a vehicle being used as a public livery conveyance or any bodily injury which occurs during the course of employment if worker's compensation benefits are required or available for the injury.

The standard homeowners policy provides that the insurance company will pay the necessary medical expenses that are incurred or medically ascertained within three years from the date of an accident causing "bodily injury." This type of coverage typically does not apply to the named insured or regular residents of the household except "residence employees." The medical payments coverage applies to a person who was on the insured location with the permission of the insured or a person of the insured location if the bodily injury arises out of a condition on the insured location or the ways immediately adjoining the insured location, is caused by the activities of an insured, is caused by a resident employee or is caused by an animal owned by or in the care of an insured. Typical exclusions for this type of coverage involve intentional acts, business pursuits, injuries arising out of the rendering or failure to render professional services or arising out of the use of motorized land conveyances.

Commercial general liability policies also provide medical payments coverage. Within this type of policy, the insurance company agrees to pay medical expenses for bodily injury caused by an accident on the premises the insured owns or rents, on the ways next to the premises the insured owns or rents, or because of the insured's operations provided that the accident giving rise to the injury takes place in the coverage territory and during the policy term and the expenses are incurred and reported to the insurance...