GEICO Licensing Practice Test 2025 – Complete Exam Prep

Casualty insurance primarily protects against losses that result from the actions of the policyholder that affect another individual or their property. This type of insurance covers legal liabilities for injuries to persons or damage to their property, which is essential in protecting individuals and businesses against claims that they may face due to accidents or negligence related to their actions. For instance, if a person accidentally injures someone during a sports activity or causes an accident while driving, casualty insurance would help to cover the legal costs and any damages awarded to the injured party.

While options related to property damage, personal belongings, or natural disasters might seem relevant in certain contexts, they do not accurately capture the core function of casualty insurance. Casualty coverage is more focused on liability rather than merely insuring personal property or belongings. Understanding this fundamental aspect of casualty insurance is crucial for anyone working in the insurance field or studying for licensing, as it defines the responsibilities and protections afforded to policyholders in various situations.