What does "third-party property damage" insurance cover?

Third-party property damage insurance specifically addresses the financial responsibility of the insured for any damage that their vehicle causes to someone else’s property. This includes situations like damaging another person's car, fence, or building in an accident. The purpose of this coverage is to ensure that if the insured is at fault in an accident, the costs incurred from damages to third parties can be covered, thereby protecting the insured from potentially high out-of-pocket expenses resulting from such incidents.

This coverage does not extend to the insured's own vehicle or compensate for personal injuries they may suffer in an accident, nor does it cover legal fees associated with disputes arising from the accident. Each of those scenarios falls outside the bounds of what third-party property damage insurance is designed to cover. Thus, option C accurately reflects the nature of this specific type of insurance coverage.