Which statement is true regarding personal liability coverage in a homeowners policy?

Personal liability coverage in a homeowners policy is designed to protect the policyholder from financial loss when they are held legally responsible for bodily injury or property damage to others. The key aspect that makes the selected statement accurate is its focus on the scope of coverage, which extends beyond the physical premises of the insured's home.

This means that personal liability coverage is not limited to incidents that occur at the insured's residence. It also applies to events that happen while engaging in activities away from home, such as an accident that occurs while visiting a park, attending a social gathering, or even while traveling. This broader coverage is crucial for providing comprehensive protection to homeowners, ensuring that they are covered for various risks associated with their personal activities.

The other options do not accurately capture the essence of personal liability coverage. One option incorrectly suggests that the coverage only applies to damages incurred at home, which restricts its applicability. Another option mentions that it is a separate policy from physical damage coverage, which is misleading because personal liability is typically included within the homeowners policy itself as a part of the overall protection it provides. Lastly, mentioning coverage limited to the owner's property misrepresents the purpose of personal liability, which is fundamentally about protecting against liability to others rather than damage to the insured's