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Insurance · Auto Insurance

What does the liability portion of an auto insurance policy cover?

Reviewed by Jordan Morley, Editorial Lead at 247SimpleTests. Written by the 247SimpleTests Editorial Team from the official source material cited on every question.

Correct answer

Bodily injury and property damage the insured causes to others in an accident for which the insured is legally responsible

  1. A Theft of the vehicle
  2. B Damage to the insured's own vehicle
  3. C Only the insured's medical bills
  4. D Bodily injury and property damage the insured causes to others in an accident for which the insured is legally responsible

Why this is the answer

The liability portion of an auto policy covers bodily injury and property damage that the insured causes to others (third parties) in an accident for which the insured is at fault — for example, injuries to people in another car or damage to their vehicle or property. It pays damages up to the policy limits and provides legal defense. It does not cover the insured's own vehicle damage (that is collision/comprehensive) or the insured's own injuries (that may be covered by medical payments or personal injury protection). Most states require minimum auto liability coverage. Understanding what auto liability covers — harm to others — is core casualty content.
Source: P&C Exam, Auto Liability

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About this topic: Auto Insurance

Auto insurance questions cover the personal auto policy: liability, medical payments, uninsured and underinsured motorist, collision and comprehensive coverages, who is an insured, exclusions and the state's financial-responsibility requirements. This is one of 16 Casualty Insurance questions on auto insurance, each with a full explanation on a single study page.

New to this exam? Our Insurance exam guide explains the format, scoring, and how to prepare.

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