What does the term "physical damage" typically refer to in an auto insurance policy?

The term "physical damage" in an auto insurance policy primarily refers to damage incurred to the insured vehicle itself. This encompasses various types of damage, including collision damage from accidents, comprehensive damage due to events like theft, vandalism, or natural disasters, as well as damage from falling objects or fire. The terminology is crucial in determining what damages are covered under the policy, which typically includes repair costs or the replacement value of the vehicle after such incidents.

In contrast, the other options focus on aspects not associated directly with the vehicle's condition. For example, injuries caused to drivers, legal costs, and medical expenses involve liabilities and personal injury matters that are outside the scope of what "physical damage" denotes in the context of an auto insurance policy. Understanding this distinction is essential for policyholders to effectively navigate their coverage options and understand the protections afforded by their insurance.