Washington State Insurance Practice Exam

In general terms, what does auto insurance protect against?

1. Loss of income due to accidents

2. Financial loss resulting from accidents or theft involving a vehicle

3. Liability for workplace injuries

4. Property damage unrelated to vehicles

The correct answer is: Financial loss resulting from accidents or theft involving a vehicle

Auto insurance is primarily designed to provide financial protection against losses that arise from accidents or theft involving a vehicle. This coverage can encompass various aspects, such as damage to your own car, damage to other vehicles, medical expenses resulting from an accident, and liability for injuries sustained by others. It aims to mitigate the substantial costs that can result from these incidents, ensuring that the insured is not overwhelmed by unexpected out-of-pocket expenses. The focus of auto insurance is specifically on incidents that involve vehicles, which makes this choice the most accurate. Other types of protections, such as loss of income due to accidents, workplace liability, or property damage unrelated to vehicles, fall outside the scope of what auto insurance is designed to cover. Therefore, the correct answer encapsulates the core purpose of auto insurance, which is to safeguard against financial losses linked to vehicle-related events.