Texas Property and Casualty License Practice Exam

What does property damage include?

1. Medical expenses due to injury

2. Damages including loss of use

3. Compensation for emotional distress

4. Legal fees incurred during recovery

The correct answer is: Damages including loss of use

Property damage encompasses the physical harm or loss to tangible property. This can include not only the cost to repair or replace damaged property but also the loss of use that results from the property being damaged. For instance, if a car is involved in an accident and cannot be used while it is being repaired, the loss of the car's use until it’s back on the road is considered a part of property damage. This is significant as it goes beyond just the physical restoration of property and acknowledges the impact on the owner’s ability to utilize their property during the period it is out of commission. Other options, such as medical expenses due to injury, do not fall under property damage since they pertain to bodily injury claims. Compensation for emotional distress also relates to personal injury laws rather than property loss. Legal fees incurred during recovery, while potentially relevant in a broader context of financial loss, are not classified as property damage itself. Each of these alternatives addresses different aspects that relate to liability and claims in insurance but do not specifically pertain to damage to property.