Which situation would be excluded under auto liability?

The situation involving property damage owned by the insured is excluded under auto liability coverage because liability insurance is designed to protect the insured from claims made by others for bodily injury or property damage for which the insured is legally responsible. When it comes to one's own property, the insured cannot be liable to themselves; therefore, any damage to property that they own does not fall under the coverage that liability insurance provides.

In contrast, scenarios involving accidental damage to a friend's property or damage caused while driving a rental car typically fall under liability coverage, as they pertain to damages inflicted on third parties. Additionally, intentional damage, even if it pertains to one's own vehicle, does not enjoy coverage because liability policies do not cover intentional acts. Thus, the correct situation representing an exclusion under auto liability is the damage to property owned by the insured, as this is not an action for which they would be held liable legally.