What is the purpose of liability coverage in a personal auto insurance policy?

Liability coverage in a personal auto insurance policy serves the specific purpose of covering damages to other parties when the insured is found to be at fault in an accident. This includes bodily injury and property damage that may result from an incident for which the insured is responsible. Essentially, if the insured causes an accident that injures someone else or damages their property, the liability coverage will pay for those costs, helping protect the insured from financial loss and legal ramifications associated with the claim.

This coverage is vital not only for the financial security of the insured but also for adhering to legal obligations, as many jurisdictions require drivers to carry a minimum amount of liability insurance. In contrast, the other options provided focus on coverage that pertains to the insured vehicle or the insured individual themselves, which does not align with the primary function of liability coverage.