North Carolina Adjuster Practice Exam

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What does Coverage L in a Personal Liability Supplement provide?

  1. Property damage coverage

  2. Coverage for personal injury

  3. Medical payments to others

  4. Protection against legal judgments

The correct answer is: Protection against legal judgments

Coverage L in a Personal Liability Supplement primarily provides protection against legal judgments that may arise from claims or lawsuits for bodily injury or property damage that insured individuals may unintentionally cause to others. This coverage is designed to safeguard the insured by covering the costs associated with legal defense, settlements, and judgments, up to the policy limits. It’s essential in personal insurance policies, as it helps to mitigate financial risks that can occur from various incidents that lead to legal action. If an insured party is found responsible for damages or injuries to a third party, Coverage L acts to cover those liabilities, thus protecting the personal assets of the insured.

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