Property and Casualty Insurance Practice Exam

Supplementary Payments can cover which of the following?

1. Homeowner's insurance claims

2. Personal injury legal fees

3. Cost of bail bonds required due to an accident

4. General damages for lost wages

The correct answer is: Cost of bail bonds required due to an accident

Supplementary Payments are additional benefits provided by certain types of insurance policies, specifically liability policies, that enhance the coverage offered beyond the basic limits of liability. These payments are not included in the limit of liability; rather, they cover specific costs incurred when handling a claim. In the context of your question, the coverage for costs associated with bail bonds required due to an accident is relevant. When an insured person is involved in an auto accident, they may face legal charges that lead to the need for bail. Insurance policies that include Supplementary Payments often cover the cost of bail bonds, which helps ensure the insured can secure their release until their court appearance. The other options reflect areas that are typically covered under standard limits of various policies but do not fall under Supplementary Payments. Homeowner's insurance claims are generally covered directly by the homeowner's policy and are not related to supplementary benefits. Personal injury legal fees could pertain to various litigation that might not be covered as supplementary expenses, and general damages for lost wages typically must be sought through a different insurance mechanism such as workers' compensation or specific personal injury claims, rather than through the supplementary provisions of a liability policy.