So i noticed a lot of smoke coming from near the driver side in the the engine as i stopped at a red light. I pulled over immediately and saw what looks like to be the coolant bypass hose has came off of one side and coolant poured onto everything. My question is why did this happen and where does it hook up to?
Answer: Since you did not tell us the make, model and engine size of your car, I will try to offer the best help i can.
Any hose can blow out at any time, especially if the car has a lot of miles on it. A hose can also blow off due to another problem- like the engine is overheating or building too much pressure.
An overheating engine will cause high pressure in the cooling system and a weak hose can blow out as a result. Causes of overheating are a bad thermostat, plugged radiator or blown head gasket. A blown head gasket can cause high pressure combustion gas to be forced into the cooling system causing very hot air pockets and high system pressure.
If the fitting that the hose attached to blew out of the manifold, this is a common problem on some GM engines. A plastic fitting can break off with age and cause this. You would need to cut the old fitting out of the manifold, install a new fitting and hose.
Either way, you will need to repair the failed hose / fitting, purge the air from the system then run the engine to see if there was an underlying cause for this. Be sure to wash the engine down with water since coolant will continue to burn off ans smoke until it is all gone. If the engine seems to run normally and not getting hot, then just chalk it up to a bad hose.