Idaho Property and Casualty Practice Exam 2026 - Free Practice Questions and Study Guide

Question: 1 / 400

What is the primary purpose of liability insurance?

To protect against loss of personal property

To cover legal costs and damages for injury to others

Liability insurance is fundamentally designed to cover legal costs and damages that may arise from injuries or damages caused to others in incidents where the insured is found to be at fault. This type of insurance acts as a financial safety net, ensuring that if an insured party is sued for negligence or liable for causing harm, the liability insurance policy will help cover the associated costs. This includes legal defense fees, court costs, and any awarded damages to the injured party.

Understanding the primary function of liability insurance is vital, as it serves to protect the insured's personal assets from being depleted due to large claims. The other options focus on different types of coverage: protecting personal property, paying for damage to one's own vehicle, or providing health care reimbursement, which fall outside the specific scope and intent of liability insurance.

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To pay for damage to your own vehicle

To provide health coverage for medical expenses

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