Hawaii Insurance License Practice Exam

Which of the following is NOT a type of property coverage?

1. Comprehensive Coverage

2. Liability Coverage

3. Underinsured Motorist Coverage

4. Workers' Compensation Coverage

The correct answer is: Workers' Compensation Coverage

Workers' Compensation Coverage is considered a type of liability insurance rather than property coverage. It's designed to provide benefits to employees who suffer work-related injuries or illnesses, covering medical expenses and lost wages. This coverage is fundamentally different from property coverage, which protects against loss or damage to tangible assets such as homes, vehicles, and personal belongings. Comprehensive Coverage, on the other hand, is a type of property insurance that protects against various risks such as theft, vandalism, and natural disasters for vehicles or other property. Liability Coverage safeguards the insured against claims for damages they may cause to another party’s property or person. Underinsured Motorist Coverage provides protection in case the insured is involved in an accident with a driver whose insurance is insufficient to cover the damages, which pertains to the financial responsibility for damage rather than the direct protection of physical property itself. Understanding the nuances of these different types of coverage helps clarify why Workers' Compensation does not fit into the category of property coverage.