Illinois Casualty Insurance State Practice Exam

What does Collision Coverage primarily protect?

1. Covers damage to third-party vehicles

2. Covers damage to the insured vehicle caused by collision or upset

3. Provides liability coverage for bodily injuries

4. Covers rental costs of replacement vehicles

The correct answer is: Covers damage to the insured vehicle caused by collision or upset

Collision Coverage is designed specifically to protect the insured's vehicle from damage resulting from a collision with another vehicle or object, or from the vehicle overturning (upsetting). This coverage means that if the insured's vehicle is involved in an accident, regardless of who is at fault, the insurance will cover the costs associated with repairing or replacing the damaged vehicle. This type of coverage is crucial for vehicle owners who want to ensure that they have financial protection for their own vehicle in case of an accident, rather than solely relying on liability coverage, which only addresses damages to third parties. By providing payment for the repair or replacement of the insured vehicle after a collision, Collision Coverage helps policyholders recover faster and maintain the value of their asset.