Which of the following is basic liability insurance designed to cover?

Basic liability insurance is specifically designed to cover injuries and damages that the policyholder causes to other people or property. This type of insurance provides financial protection by paying for claims if the insured is found legally responsible for an accident that results in bodily injury or property damage to others.

For example, if the policyholder causes a car accident that injures another driver or damages their vehicle, liability insurance would cover the medical expenses and repair costs, up to the policy limits. This is essential in protecting the policyholder's assets, as without liability coverage, they could be personally responsible for covering these costs out of their own pocket.

The other options reflect coverages that are not associated with basic liability insurance: damage to the policyholder's own vehicle relates to collision or comprehensive coverage, full replacement costs pertain to specific elements of comprehensive coverage or endorsements that might be available, and theft of the insured vehicle would typically be covered under comprehensive insurance, not liability.