Why might Matt's liability insurer deny coverage for the damage he caused in the accident?

The correct reason why Matt's liability insurer might deny coverage for the damage he caused in the accident relates to the nature of the incident being associated with business activities. If the accident happened while Matt was delivering goods for his employer, it typically indicates that he was engaged in work-related tasks at the time of the incident. Most personal auto insurance policies cover only personal use of the vehicle and often exclude coverage for accidents occurring while the vehicle is used for commercial purposes, such as delivering goods. Therefore, the insurance could deny the claim on the basis that the use of the vehicle at the time of the accident fell outside the terms of the personal liability policy.

In contrast, driving under the influence often leads to denial of coverage, but it primarily hinges on specific exclusions in the policy regarding illegal activities, rather than the nature of the use. A vehicle not registered for business use may present issues, but the primary concern is whether the insurer views the incident as arising from business activity. In a no-fault state, while there are specific regulations regarding liability coverage, this alone does not inherently add a reason for liability coverage denial in this context.