Florida Insurance Licensing Practice Exam

Insurance that covers the responsibility for loss arising out of negligence that results in payment to a party other than the insured is:

1. Liability Insurance

2. Property Insurance

3. Life Insurance

4. Health Insurance

The correct answer is: Liability Insurance

Liability insurance covers the costs of any damages or losses caused by the insured's negligence to a third party. This is different from property insurance, which only covers damage to the insured's property, and life and health insurance, which cover personal medical expenses and benefits for the insured. Option A, liability insurance, is the only option that specifically mentions coverage for loss arising out of negligence and payment to a third party, making it the best choice for this type of situation.