Texas All Lines Adjuster Practice Test

What is the primary function of an auto policy?

1. To provide health insurance for vehicle operators

2. To protect the policyholder while operating a vehicle

3. To cover vehicle maintenance costs

4. To indemnify passengers in a vehicle accident

The correct answer is: To protect the policyholder while operating a vehicle

The primary function of an auto policy is to protect the policyholder while operating a vehicle. This type of insurance generally includes several types of coverage that address various risks associated with driving. For instance, liability coverage protects the policyholder against claims for bodily injury or property damage they may cause to others while driving. Additionally, personal injury protection or medical payments can cover the medical expenses for the policyholder and passengers injured in an accident. While health insurance may cover medical expenses, it isn't the primary purpose of an auto policy. Similarly, an auto policy does not typically cover vehicle maintenance costs, as those are considered the owner's responsibility rather than an insurance matter. Indemnifying passengers in an accident may happen, but the primary focus remains on the policyholder’s protection and liability, reaffirming that the main role of an auto policy is to safeguard the interests of those operating the vehicle.