Mississippi Property & Casualty Practice Exam

What is covered under a personal liability policy?

1. Only property damage

2. Only bodily injury

3. Bodily injury and property damage

4. Natural disasters

The correct answer is: Bodily injury and property damage

A personal liability policy provides coverage for both bodily injury and property damage that the insured may be legally responsible for due to their actions or negligence. This type of insurance protects individuals and families from claims resulting from injuries to others or damage to their property, leading to legal expenses and compensation costs. For instance, if someone is injured on your property or if you accidentally damage someone else's property, the personal liability coverage would help pay for medical expenses or repair costs. This comprehensive approach is essential, as it acknowledges that liability can arise from various situations, making it crucial to cover both types of potential claims. Options that limit coverage to just one type, such as only property damage or only bodily injury, do not provide the complete protection that a personal liability policy is designed for. Additionally, coverage for natural disasters is generally addressed under different types of policies, such as homeowners insurance or specialized disaster coverage, rather than a standard personal liability policy.