Under a Homeowner's policy, what is typically the coverage for damage caused by personal liability?

The correct understanding in this context is that personal liability coverage under a Homeowner's policy has specific limits per incident. This means that the policy will pay for damages or injuries for which the insured is legally liable, but only up to the designated limit outlined in the policy documentation.

This approach ensures that while homeowners are protected against various potential lawsuits and claims for damages, there is a cap to the insurance company's liability, thus managing risk for both the insurer and insured. Most policies will specify the maximum amount payable for individual incidents, which helps homeowners assess their coverage needs and provides clarity on the extent of protection they receive.

In contrast, the other choices do not accurately represent the nature of personal liability coverage. For instance, stating that coverage is unlimited would imply no cap exists, which is generally not the case in standard policies. Saying it only covers legal fees overlooks the broader scope of liability coverage which includes potential damages awarded in court, not merely the legal defense costs. Lastly, while intentional acts are indeed excluded from coverage, that fact does not pertain to the coverage limits but rather to the conditions under which the policy operates.