Alabama Property and Casualty Practice Exam

Renters insurance is primarily designed to protect individuals who are renting their living space, such as an apartment or a house. This type of insurance generally covers personal property loss, which means it provides financial assistance for items like furniture, electronics, clothing, and other personal belongings in the event of theft, fire, or other covered perils.

Additionally, renters insurance typically includes liability coverage, which protects the policyholder against claims made by others for injuries or damages that occur on the rented property. This can cover legal costs and medical expenses if someone is injured in the policyholder's home.

The other options do not accurately reflect the components of a renters insurance policy. Coverage for the physical structure of the building pertains to homeowners insurance, not renters insurance, since renters do not own the property. Protection against all types of natural disasters is not standard in renters insurance; policies often exclude certain disasters like floods and earthquakes unless additional coverage is purchased. Lastly, while theft is covered, renters insurance is not limited to covering solely theft but extends to a broader range of scenarios affecting personal property and liability.