Final answer:
It is true that a personal auto policy would cover the insured's negligence that causes property damage to others, as this is part of the auto insurance's core protection. (option 1)
Step-by-step explanation:
A personal auto policy typically covers negligence of the insured which inherently causes property damage to others. This is true because one of the fundamental principles of auto insurance is to protect the policyholder against financial losses resulting from accidents they may cause. Insurance policies generally pay out when the policyholder incurs medical expenses, when the policyholder's car is damaged, stolen, or causes damage to others, and even when a dwelling is damaged or burglarized. Auto insurance is designed to take into account the imperfect information insurers have about future accidents and the risk associated with individual drivers.
A personal auto insurance policy does cover the negligence of the insured that inherently causes property damage to others. This liability coverage is crucial for protecting the insured from the financial consequences of unintentional harm caused to third parties.