Insurance Broker Certification Practice Exam

What type of insurance covers the loss of physical property or its income-producing abilities?

1. Health insurance

2. Property insurance

3. Casualty insurance

4. Life insurance

The correct answer is: Property insurance

Property insurance specifically addresses the coverage of physical property and the income it generates. This type of insurance protects against risks such as damage or loss to tangible assets, including buildings, equipment, inventory, and personal belongings. Additionally, it can provide coverage for loss of income resulting from the inability to use the insured property due to a covered loss. In contrast, health insurance focuses on medical expenses and healthcare services rather than property. Casualty insurance pertains to liability and could cover losses related to accidents or injuries to other parties, but it does not directly insure physical property itself. Life insurance, meanwhile, covers the financial impact associated with the death of an individual, offering payouts to beneficiaries upon the insured’s passing, rather than addressing property loss or income generation directly.