What protection does 'fire and theft' insurance provide?

The option indicating that 'fire and theft' insurance provides coverage for damages resulting from fire or if the car is stolen, along with third-party coverage, is accurate because 'fire and theft' insurance typically expands the protections offered under basic policies.

In this context, 'fire and theft' insurance covers the cost of damages to the insured vehicle in the event of a fire or theft. This means that if the car is damaged due to a fire incident or is stolen, the policyholder would be compensated for those losses, which are significant risks associated with vehicle ownership. Additionally, this type of insurance generally includes third-party liability coverage, which protects the insured from financial loss if they are legally responsible for causing injury to someone else or damaging their property while using their vehicle.

This combination of coverage is essential for drivers, as it protects both their own vehicle and provides legal protection against claims that might arise from accidents involving other parties. Such a policy is more comprehensive than merely covering theft or fire alone, as it also addresses third-party liabilities, making it a more robust choice for vehicle protection.