Texas Property and Casualty License Practice Exam

Which type of insurance coverage is most commonly associated with casualty coverage?

1. Property protection

2. Personal liability

3. Liability (3rd party)

4. Health insurance

The correct answer is: Liability (3rd party)

Casualty coverage primarily focuses on protecting individuals and businesses from liability claims resulting from injury to others or damage to their property. This type of insurance is designed to cover third-party claims, which is why liability coverage (often referred to as third-party liability) is the most commonly associated type with casualty coverage. For instance, if a person is found legally responsible for injuring another person or damaging someone else's property, liability coverage would provide financial protection against the claims made by the affected parties. This can include legal fees, settlements, and judgments. While property protection is important, it falls under property insurance and not directly under casualty. Personal liability is a part of casualty coverage but is more specific and does not capture all the nuances of third-party claims. Health insurance, on the other hand, deals with medical expenses and is not related to liability or casualty issues. Thus, liability (third party) is indeed the most fitting answer when discussing the key aspects of casualty coverage in insurance.