What does "underinsured motorist coverage" protect against?

Underinsured motorist coverage is specifically designed to protect insured individuals in the event they are involved in an accident with a driver whose insurance is insufficient to cover the damages incurred. This type of coverage comes into play when the other party's insurance limit is lower than the costs associated with medical expenses, lost wages, or other damages sustained in the accident.

The focus of underinsured motorist coverage is to fill the gap between what the underinsured driver can pay and the actual financial losses suffered by the insured. This ensures that even in cases where other drivers may carry insurance, there is still a level of protection for those who sustain injuries or damages that exceed the coverage limits of the at-fault driver.

While there are protections available for accidents caused by uninsured drivers and for property damage, underinsured motorist coverage is distinctively tailored to address scenarios involving drivers who do have insurance but not enough to cover the full extent of the losses.