Utah Financial Literacy State Practice Test

Automobile insurance is specifically designed to provide financial protection against losses resulting from vehicle accidents. This type of insurance covers various risks, including damage to the insured vehicle, liability for injury or damage to other parties, as well as coverage for medical expenses for the driver and passengers. By purchasing automobile insurance, vehicle owners can mitigate the financial impact of accidents, such as repair costs, medical costs, and potential legal fees associated with liability claims.

In contrast, life insurance offers financial support to beneficiaries after the policyholder's death, and health insurance covers medical expenses related to healthcare, but does not address vehicle-related incidents. Renters insurance protects personal property within a rental unit and liability that may arise from accidents occurring in that dwelling, which does not pertain to vehicle accidents. Thus, automobile insurance is the correct choice, as it directly addresses the financial risks associated with operating a vehicle.