International Baccalaureate (IB) Practice Exam

If you are at fault in a two-car accident and your insurance covers the other driver's medical expenses, what type of insurance coverage is this?

1. Uninsured motorist protection

2. Liability

3. Collision

4. Comprehensive

The correct answer is: Liability

The correct answer is liability insurance. This type of insurance is designed to protect the insured driver against claims made by other parties for damages or injuries sustained in an accident where the insured is at fault. In the scenario presented, since the insurance covers the other driver’s medical expenses due to the insured's fault in the accident, it clearly falls within the realm of liability coverage. Liability insurance includes two main components: bodily injury liability, which covers medical expenses for the other driver and passengers, and property damage liability, which covers damage to the other driver's vehicle or property. It is mandatory in many places because it ensures that injured parties can receive compensation for their medical bills and related expenses after an accident caused by the insured. In contrast, uninsured motorist protection is meant to cover the policyholder in the event they are in an accident with a driver who does not have insurance. Collision coverage deals with the policyholder's own vehicle damage, regardless of fault, while comprehensive coverage protects against non-collision related incidents (such as theft, vandalism, or natural disasters). Therefore, understanding the specific roles of these different types of insurance clarifies why liability is the appropriate answer in this case.