Hank, who is the named insured under a Personal Auto policy, borrows a neighbor's car and hits a parked car while driving the neighbor's auto. The neighbor is also insured under a Personal Auto policy. Whose policy would provide Liability coverage for this loss?

Hank's Personal Auto policy would not be the only policy to respond because the accident occurred while driving the neighbor's car. In such cases, the liability coverage from the vehicle's owner (the neighbor) is typically primary, making Hank’s policy secondary.

This choice is incorrect as both policies could potentially provide coverage; however, the neighbor's policy would be the primary coverage in this situation. Since the accident occurred while using the neighbor's vehicle, liability coverage from that policy is applicable.

While the neighbor's policy is primary, it is not the only policy that would respond in this case. Hank's policy will also provide coverage but only as excess coverage after the limits of the neighbor's policy are reached. Therefore, this choice fails to recognize the role of Hank's own policy.