Alabama Property and Casualty Practice Exam

Which type of insurance generally covers losses from theft or vandalism?

1. Auto insurance

2. Property insurance

3. Liability insurance

4. Health insurance

The correct answer is: Property insurance

Property insurance is specifically designed to protect against losses associated with damage to or theft of physical property. This type of insurance typically includes coverage for a variety of risks such as fire, vandalism, and theft. When a policyholder experiences a loss due to vandalism, such as graffiti on a building, or if personal possessions are stolen, property insurance would provide financial compensation to cover the cost of repairs or replacement. Auto insurance primarily covers damages to vehicles and liabilities related to accidents on the road but does not extend to personal property theft or vandalism outside that context. Liability insurance protects individuals or businesses from claims involving bodily injury or property damage to others but does not address theft or vandalism of the insured's own property. Health insurance provides coverage for medical expenses and does not include property-related incidents. Therefore, property insurance is the most appropriate choice for coverage against losses specifically due to theft or vandalism.