State Farm Auto Insurance Practice Test

What does Property Damage Liability Coverage protect against?

1. Injury to the insured

2. Damage to the insured's vehicle

3. Damage to others' property

4. Medical costs for the driver

The correct answer is: Damage to others' property

Property Damage Liability Coverage is designed to protect the insured from financial responsibility for damage they may cause to another person's property while operating their vehicle. This coverage is essential because it helps pay for repairs or replacements of the other person's property, such as their car, fence, or building, when the insured is at fault in an accident. This ensures that the insured can comply with legal obligations and avoid significant out-of-pocket expenses that could arise from such incidents. The other options describe different types of insurance coverage or aspects not covered by Property Damage Liability. For instance, injury to the insured and medical costs for the driver relate to bodily injury coverage, which specifically addresses medical expenses arising from injuries sustained in an accident, not property damage. Similarly, damage to the insured's vehicle falls under comprehensive or collision coverage, focusing on protecting the insured's own property rather than liabilities to others. Thus, the correct answer accurately reflects the primary purpose of Property Damage Liability Coverage.