Under what circumstances might liability coverage apply in personal auto insurance?

Liability coverage in personal auto insurance is designed to protect the policyholder in situations where they are responsible for causing harm or damage to another person or property. This coverage applies in various contexts, most notably when the driver causes physical damage to a third party. This means if an insured driver is involved in an accident that results in bodily injury to someone else or damage to another person's vehicle or property, liability coverage will typically respond to cover the costs associated with those damages.

This kind of coverage is essential for drivers because it helps to mitigate the financial impact of legal claims and medical expenses resulting from accidents for which they are found liable. It is a fundamental aspect of auto insurance policies, emphasized by its necessity in many states as a requirement for lawful vehicle operation.

In contrast to the other answer choices, liability coverage does not exclusively depend on the driver being under the influence, driving borrowed vehicles, or being involved in weather-related accidents. While these scenarios can be relevant in specific claims or discussions, they do not represent the primary triggers for liability coverage activation. Thus, the focus remains on the actual occurrence of causing harm or damage to third parties, which underscores the importance and applicability of liability coverage in personal auto insurance.