How do medical payments limits apply in auto insurance?

The correct understanding of medical payments limits in auto insurance is that they apply for each separate accident. This means that after an auto accident occurs, the medical payments coverage is activated for the medical expenses of the insured and their passengers, up to the specified limit stated in the policy. This limit is reset for every new accident, providing separate coverage for each incident rather than accumulating or being averaged across a policy term or among multiple parties involved in the same accident.

This structure allows policyholders to confidently know that if they face multiple accidents, each will have its medical payments coverage amount available. Other options do not accurately reflect how these limits function under most auto insurance policies. For instance, applying a limit per policy year would mean that the coverage could be exhausted within that timeframe, which does not meet the needs for multiple incidents. Similarly, applying limits per injured party would create an administrative complexity that is not standard practice, and limiting this coverage to only property damage incidents is not congruous, as medical payments are specifically focused on medical expenses rather than property damage.