Property and Casualty Insurance Practice Exam

When does Comprehensive coverage typically apply?

1. During a vehicle collision

2. To damages from events like theft or fire

3. For damage caused by another driver

4. For maintenance costs

The correct answer is: To damages from events like theft or fire

Comprehensive coverage is designed to protect against losses that occur due to non-collision-related incidents. This includes damages from events such as theft, vandalism, fire, natural disasters, and other unforeseen occurrences that do not involve the vehicle colliding with another object or vehicle. This coverage is essential for safeguarding the vehicle from a broad range of risks that can cause significant financial loss without direct contact or collision. The other choices do not accurately represent the function of comprehensive coverage. Collision situations, such as vehicle crashes, fall under a different category known as collision coverage. Damage caused by another driver would typically involve liability coverage rather than comprehensive coverage, as it pertains to the responsibilities of one driver to another in the event of an accident. Lastly, maintenance costs are generally out-of-pocket expenses for the vehicle’s upkeep and are not covered by any type of insurance policy, including comprehensive or collision coverage.