The physical damage coverage under the liability section of your policy pays for the damage you cause (and are liable for) to the property of others, and costs associated with that damage (tow, rental etc), there will be a limit on that coverage per accident. This is a state required coverage (in all states I know of) with varing limits, the state I am in is a 10k limit, (you can and should carry more) which I think is obsurd, (that's beside the point though).....
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