What is the purpose of Personal Auto Policy liability coverage?

The purpose of Personal Auto Policy liability coverage is to cover damages to others caused by the insured. This means that if you, as the driver of the insured vehicle, are responsible for an accident that results in bodily injury or property damage to another person, this coverage will help pay for those costs. It is a crucial component of auto insurance because it protects the insured from financial loss due to legal claims or judgments arising from accidents for which they are at fault.

Liability coverage typically includes two main types: bodily injury liability, which covers injuries suffered by others in an accident you're responsible for, and property damage liability, which covers damage you cause to someone else's property. This ensures that anyone harmed or whose property is damaged due to your actions while driving is compensated.

In contrast, the other options refer to different aspects of auto insurance or coverage types that do not relate directly to the liability coverage afforded by a Personal Auto Policy. Collision damages are specific to your own vehicle's damages after an accident, wage loss coverage pertains to compensation for lost wages resulting from an accident, and coverage for personal property generally addresses items within the vehicle or is separate from the vehicle itself.