What is liability coverage primarily designed to protect against?

Liability coverage is primarily designed to protect against injuries to third parties and their property. This type of coverage comes into play when the insured individual is found to be at fault in an accident that causes harm or damage to another person or their belongings. It ensures that medical expenses, repair costs, and legal fees associated with these injuries or damages are covered, up to the policy limits.

In the context of an automobile insurance policy, liability coverage typically includes two components: bodily injury liability and property damage liability. Bodily injury liability covers the medical costs for injuries sustained by others in an accident where the insured driver is at fault, while property damage liability addresses damage caused to someone else's property, such as their vehicle or other structures.

This coverage plays a crucial role in protecting the insured from financial loss stemming from legal claims and lawsuits that may arise as a consequence of their actions on the road. It does not cover personal injuries sustained by the vehicle owner, nor does it provide protection for damages to the insured’s own vehicle or the theft of that vehicle. Instead, specific coverage options would be needed to address those situations.