Future Business Leaders of America (FBLA) Personal Finance Practice Test

What type of insurance would cover theft or damage to a home?

1. Health Insurance

2. Auto Insurance

3. Homeowners Insurance

4. Life Insurance

The correct answer is: Homeowners Insurance

Homeowners insurance is specifically designed to provide coverage for theft or damage to a home. This type of insurance policy typically protects not only the physical structure of the house but also the personal belongings within it. In the event of incidents like burglary, fire, vandalism, or certain natural disasters, homeowners insurance can assist policyholders in covering repair costs, replacements, and other related expenses, ensuring financial security against such unforeseen events. In contrast, health insurance focuses on covering medical expenses and health care services, while auto insurance pertains to vehicles and covers damages related to car accidents or theft of a vehicle. Life insurance is intended to provide financial support to beneficiaries after the policyholder's death and does not relate to property protection. Thus, homeowners insurance is the appropriate choice for coverage related to theft or damage to a home.