What coverage applies to damage incurred while using a vehicle not owned by the insured?

The correct coverage in this scenario is nonowned auto coverage. This type of coverage is specifically designed to protect the insured when they are driving a vehicle that they do not own. It typically comes into play when the insured uses vehicles from car rental services, borrowed vehicles from friends or family, or even company cars. Nonowned auto coverage is crucial because it fills the gap for liability, offering protection against potential risks while operating someone else's vehicle.

This coverage is essential for individuals who frequently use vehicles that are not registered in their name, ensuring they have liability protection in case of accidents or damages that occur while using these vehicles.

While liability coverage generally applies to the insured's own vehicle and offers protection against claims made by third parties for injuries or damages, comprehensive coverage refers to damage to an insured's own vehicle from non-collision-related incidents, and physical damage coverage pertains to covering the vehicle itself against specific risks. In contrast, nonowned auto coverage is specifically tailored for situations where an insured is driving a vehicle they do not own, making it the correct answer.