Which type of insurance covers damage caused to another person's vehicle in an accident?

Property damage liability coverage is the type of insurance that specifically addresses damage caused to another person's vehicle in the event of an accident for which the insured is at fault. This coverage is crucial because it fulfills the legal obligation of the driver to compensate others for damages resulting from their actions. If the insured driver causes an accident that results in damage to another person's car, property damage liability coverage helps to pay for repairs or total replacement of the damaged vehicle, ensuring that the injured party is compensated without requiring them to bear the financial burden themselves.

This type of coverage is typically mandated by law in many states, which helps protect all road users and promotes personal responsibility in operating vehicles. The limits of this coverage can vary based on the individual's insurance policy, but it fundamentally serves to cover the costs associated with an accident that harms others' properties.

Understanding that property damage liability is distinct from other coverages is key; personal injury protection relates to medical expenses, uninsured motorist coverage deals with incidents involving uninsured drivers, and collision coverage only applies to damages to the insured’s own vehicle regardless of fault.