How is underinsured motorist coverage different from uninsured motorist coverage?

Underinsured motorist coverage specifically addresses situations where the at-fault driver has insurance, but their coverage limits are insufficient to fully compensate for the injuries or damages incurred in an accident. This type of coverage steps in to cover the gap between the at-fault driver's insurance limits and the actual cost of the damages, thereby ensuring that the injured party is not left without adequate compensation.

In contrast, uninsured motorist coverage is applicable when the at-fault driver does not have any insurance at all. Therefore, understanding the distinction between these two types of coverage is essential for ensuring appropriate financial protection in the event of an accident. The correct answer emphasizes the role of underinsured motorist coverage in scenarios involving underinsurance, distinguishing it clearly from situations covered by uninsured motorist coverage.