Washington State Insurance Practice Exam

Which of the following is typically covered by property insurance?

1. Medical expenses for injuries

2. Loss of business income

3. Damage to personal belongings

4. Liability for accidents on business property

The correct answer is: Damage to personal belongings

Property insurance is specifically designed to cover physical assets and personal property from risks such as damage, theft, or destruction due to various hazards, including fire, vandalism, or natural disasters. This focus makes damage to personal belongings the core coverage offered under property insurance policies. In contrast, medical expenses for injuries typically fall under liability insurance or health insurance, which handles costs related to medical treatment. Loss of business income is usually covered by business interruption insurance, a specialized type of coverage that compensates for lost income due to business disruptions, but not directly by property insurance. Liability for accidents on business property is addressed through liability insurance, which protects against claims made by third parties for injuries or damages that occur on the premises, rather than covering the physical property itself. Thus, the choice that aligns with the primary purpose of property insurance—protection of personal belongings—is clearly the most fitting answer.