West Virginia Property and Casualty Licensing Practice Exam

What type of losses does Coverage E address?

1. Impact damage

2. Liability claims

3. Fire damage

4. Personal property losses

The correct answer is: Liability claims

Coverage E specifically addresses liability claims in the context of insurance. This type of coverage protects individuals and businesses from financial losses arising from legal liabilities that occur due to injuries or damages caused by their actions or the actions of individuals for whom they are responsible. This might include instances where a person is injured on someone else's property, or where the insured unintentionally causes damage to someone else's property. Coverage E typically provides compensation for legal defense costs and any settlements or judgments that result from such claims, ensuring that the insured does not face financial ruin due to unforeseen liabilities. The other options relate to different types of coverage. Impact damage and fire damage pertain more to physical damages to property rather than legal liability, while personal property losses concern coverage for the loss or damage of personal belongings. Therefore, these do not fall under the scope of Coverage E, which is specifically designed to handle liability exposure.