Texas Personal Lines UM/UIM and PIP Practice Questions

UM/UIM and PIP can both matter after an auto crash, but they do different jobs. UM/UIM addresses an at-fault motorist who has no insurance or insufficient limits. PIP is first-party no-fault protection for specified medical expenses and, where applicable, income loss or essential services. Texas law requires insurers to offer these coverages for covered auto liability policies; the insured may reject coverage only through the prescribed process. These newly written scenarios are not Pearson items.

Question 1: The at-fault driver has no insurance

A Texas insured is injured in a crash caused by another driver. The other driver has no auto liability policy. The insured has UM bodily injury coverage and is legally entitled to damages. Which statement best describes the coverage analysis?

The key phrase is ‘legally entitled to recover.’ UM does not transform every accident into an automatic fixed payment. Liability, causation, damages, insured status, and coverage conditions remain relevant. PIP may help with eligible benefits while the liability or UM question is unresolved, but each coverage follows its own terms and coordination rules.

Question 2: Underinsured driver and prior payment

An insured sustains $75,000 in covered bodily injury damages caused by a negligent driver who has $30,000 in applicable liability coverage. The insured carries UIM with a $50,000 limit. Assume liability is established and the full $30,000 is paid or recoverable under the other driver’s policy. Ignore other adjustments. What is the maximum additional UIM amount indicated by the statutory reduction concept?

Underinsured status and payment require more than comparing two numbers. Check the policy definition, liability limits available for the accident, the claimant’s damages, amounts actually paid or recoverable, and UIM limit. The simplified arithmetic in this question isolates the reduction. Real claims may involve multiple claimants, settlements, consent requirements, or other insurance terms.

Question 3: A hit-and-run with no vehicle contact

A driver swerves to avoid an unknown vehicle that cuts across a lane. The insured’s car strikes a barrier, but there is no physical contact between the cars and no reliable identification of the other vehicle or driver. The insured claims UM benefits for the resulting bodily injury. The applicable Texas statute requires actual physical contact when the owner or operator causing injury is unknown. What is the best answer on these facts?

The word ‘unknown’ matters. The statutory contact requirement addresses a claim against an unidentified owner or operator. A known driver with no insurance presents a different proof question. Keep PIP and collision separate: either might respond under its terms even if this UM condition is not met.

Question 4: PIP and fault

A passenger riding in the named insured’s car is injured in an accident caused by the insured. The passenger has medical expenses. The auto policy includes PIP, and the passenger qualifies under the policy and statute. Must the passenger prove another driver was at fault to use PIP?

PIP is designed to provide a defined set of benefits without first resolving fault. The statute describes reasonable expenses arising from an accident, with types including necessary medical services and certain lost-income or essential-service expenses. The policy may set a limit and claim procedures. PIP is not unlimited health insurance and does not pay every economic loss.

Question 5: PIP rejection on the application

A Texas insurer issues an auto liability policy. The file contains a signed written rejection of PIP from the named insured, and the rejection satisfies the statute and applicable rules. The insured’s adult household member later asks why the policy has no PIP. What is the best explanation?

Texas law’s offer requirement protects the opportunity to select PIP; it does not force every policyholder to retain it after a valid rejection. Keep the signed rejection and effective date. For a real dispute, verify the form, policy issue date, named insured authority, and current statute. Rejection and reinstatement are not retroactive by assumption.

Question 6: UM property damage deductible

An uninsured motorist causes $4,000 in covered damage to the insured auto. The insured has UM property damage coverage. Assume the statutory $250 deductible applies and no other adjustment is stated. What is the simplified maximum before policy limits?

Do not confuse a deductible with a coverage limit. For the exam arithmetic, subtract the applicable deductible from the covered loss, then compare the result with the limit. A policy may also address property valuation, ownership, and coordination with collision coverage. If collision is used instead, its deductible and subrogation treatment may differ.

Question 7: Medical expenses after a crash

An insured incurs reasonable medical expenses after a motor-vehicle accident. The other driver disputes fault, but PIP has not been rejected and the insured fits the policy’s eligible-person definition. Which response is most accurate?

The statutory definition includes specified expenses and timing conditions. Preserve itemized bills and accident records and follow the insurer’s process. A person may also have health coverage or a liability claim; coordination and reimbursement issues can arise. Do not assume that PIP’s no-fault nature means it pays all treatment at any cost.

Compare coverages with a claim map

Build a claim map with one row for each injured person or damaged item. Put the potentially responsible driver and insurance status next to the loss. PIP can pay eligible benefits without fault proof; UM/UIM addresses legally recoverable damages from an uninsured or underinsured motorist; collision can repair the insured auto after impact; health insurance can pay medical costs under its own terms. One event may involve several policies.

Texas Insurance Code Chapter 1952 contains UM/UIM and PIP provisions. Section 1952.101 requires UM/UIM to be provided in an auto liability policy or supplemental to it; §1952.152 does the same for PIP. The statutes also address rejection, limits, definitions, and benefit rules. Always read the exact current text and policy; these questions simplify facts to isolate one rule.

TDI consumer guidance summarizes coverages and reminds consumers to ask whether exclusions or limitations apply, especially when driving borrowed vehicles. Pearson’s current outline provides exam scope. A study answer should not promise actual claim payment without the policy, endorsements, loss facts, and current law.