State Farm Auto Insurance Practice Test

Which type of liability insurance covers medical expenses and lost wages for others injured in an accident?

1. Property Damage Liability Coverage

2. Comprehensive Coverage

3. Bodily Injury Liability Coverage

4. Collision Insurance

The correct answer is: Bodily Injury Liability Coverage

Bodily Injury Liability Coverage is specifically designed to cover medical expenses and lost wages for individuals injured in an accident for which the policyholder is found at fault. This type of coverage is crucial because it helps protect the policyholder from financial repercussions arising from injuries caused to others in an auto accident. When an accident occurs and someone is injured, the costs associated with their medical treatment and any lost income due to their inability to work can be significant. Bodily Injury Liability Coverage ensures that the injured parties receive compensation for these expenses, alleviating some of the financial burdens on the at-fault driver. This coverage does not apply to the policyholder's own injuries or damages to their own vehicle, which is the distinction that sets it apart from other types of insurance. For instance, Property Damage Liability Coverage focuses solely on damages to another party's property, Comprehensive Coverage addresses non-collision-related incidents such as theft or weather damage, and Collision Insurance covers damages to the policyholder's own vehicle resulting from a collision, regardless of fault. Thus, Bodily Injury Liability Coverage is essential for protection against damages related to injuries sustained by others in an accident.