Illinois Casualty Insurance State Practice Exam 2025 - Free Practice Questions and Study Guide

The description of Auto Liability Coverage is best captured by the statement that it pays for all sums for which an insured business becomes legally responsible for bodily injuries and damages. This type of coverage is an essential component of auto insurance and is designed to protect the insured from financial losses resulting from legal liabilities arising from accidents that cause injury to others or damage to their property while using a vehicle.

It is important to note that liability coverage specifically focuses on the financial obligations that the insured has to third parties, which can include medical expenses, lost wages, pain and suffering, and property damage due to an accident that they caused. This coverage does not extend to injuries sustained by the insured or damages to their own vehicle; it is strictly about covering the legal liabilities towards others.

In contrast, the other options describe different types of coverage or scenarios that do not align with the typical scope of Auto Liability Coverage. For instance, paying for injuries incurred by the insured involves personal injury protection or medical payments coverage, while theft of the vehicle would be covered under comprehensive coverage. Lastly, medical expenses for the insured and passengers would again refer to different types of coverage, such as MedPay or personal injury protection, not liability coverage itself.