How does underinsured motorist coverage function?

Underinsured motorist coverage is designed to protect you when you are involved in an accident with a driver who has insurance, but that insurance is not sufficient to cover the damages you have incurred. This type of coverage automatically comes into play when the at-fault driver’s liability limits are lower than what is needed to fully compensate you for your medical expenses, lost wages, and other damages.

For example, if you experience significant medical costs and your bills exceed the at-fault driver's insurance limits, your underinsured motorist coverage steps in to make up the difference, up to your policy limits. This ensures that you are not left with out-of-pocket expenses due to someone else’s inadequate coverage. It emphasizes the importance of having adequate insurance coverage for all drivers on the road.

While other options may reflect aspects of auto insurance, they do not capture the essence of how underinsured motorist coverage specifically functions in relation to gaps in insurance coverage from at-fault drivers.