Question

Costs that are covered by liability insurance, aside from costs paid for any injuries or damages, are:

Option 1: Legal fees and court costs
Option 2: Property damage
Option 3: Medical expenses
Option 4: Lost income and wages

Answer 1

Liability insurance typically covers legal fees and court costs associated with lawsuits where the policyholder is deemed responsible for injuries or property damage. It does not cover the policyholder's medical expenses, property damage, or lost income.

Step-by-step explanation:

The costs that are typically covered by liability insurance, apart from payments for injuries or damage, include legal fees and court costs. Liability insurance is designed to protect the policyholder against financial loss if they are held legally responsible for injuries to others or damage to property. With liability insurance, when a covered event occurs, the insurance company may pay for things like legal defense, lawyer's fees, and other legal expenses associated with a lawsuit, in addition to any judgment or settlement that results from the suit.

It's important to understand that liability insurance does not generally cover costs like medical expenses, property damage, or lost income and wages of the policyholder themselves. These kinds of costs are covered by other types of insurance policies such as health insurance, collision or comprehensive auto insurance, and disability insurance, respectively.

Understanding your insurance coverage, deductibles, copayments, and coinsurance is crucial for effectively managing financial risks and avoiding unexpected out-of-pocket expenses.