Texas Property and Casualty License Practice Exam

What does property damage in a personal auto policy cover?

1. Injury to the driver of the insured vehicle

2. Income loss due to the vehicle being unusable

3. Physical injury to, destruction of, or loss of use of tangible property

4. Medical expenses incurred by the insured

The correct answer is: Physical injury to, destruction of, or loss of use of tangible property

Property damage in a personal auto policy is specifically designed to cover physical injury to, destruction of, or loss of use of tangible property. This includes damage caused to another person's vehicle or property in the event that the insured vehicle is involved in an accident. The focus of this coverage is on tangible items, emphasizing repair or replacement of physical entities rather than other types of losses. For example, if you are responsible for an accident that damages someone else's car, property damage liability would help cover the costs incurred to fix or replace that car. In contrast, the other options relate to different aspects of auto coverage. Injury to the driver pertains to bodily injury coverage, which is focused on medical expenses and lost wages due to bodily harm. Income loss due to the vehicle being unusable generally falls under loss of use claims, which are not covered by standard property damage liability. Lastly, medical expenses incurred by the insured also fall under bodily injury coverage rather than property damage. This distinction is crucial for understanding the different components of auto insurance policies.