Texas Property and Casualty License Practice Exam

Which type of coverage pays for lost wages up to 80%?

1. Property Damage Liability

2. Uninsured Motorist Coverage

3. Texas Personal Injury Protection (PIP)

4. Comprehensive Coverage

The correct answer is: Texas Personal Injury Protection (PIP)

Personal Injury Protection (PIP) is a type of coverage designed to provide benefits for medical expenses and lost wages resulting from an automobile accident, regardless of who was at fault. In Texas, PIP coverage can indeed pay for lost wages up to 80% of your income. This feature is particularly valuable as it helps policyholders maintain financial stability while they recover from injuries sustained in an accident. Choosing PIP allows for a more comprehensive safety net, as it addresses the income loss, which is a critical concern for many individuals who may be temporarily unable to work due to their injuries. The coverage is intended to be used in conjunction with health insurance or other forms of coverage to ensure that all medical and income disruption needs are met following an incident. The other types of coverage mentioned do not specifically provide payments for lost wages. Property Damage Liability pertains to damage caused to someone else's property, while Comprehensive Coverage addresses damages to your vehicle from non-collision events. Uninsured Motorist Coverage offers protection when you are hit by a driver who lacks insurance but does not cover lost wages directly. Thus, the focus of the question on lost wages directly ties to the function and purpose of Texas Personal Injury Protection (PIP).