The at-fault driver in an insured's auto crash had the state required minimums for auto liability coverage, but not enough to pay for all the damage done to the insured. This driver is...

In this scenario, the at-fault driver has the state-required minimum auto liability coverage, but it is insufficient to cover all the damages caused in the crash. This situation characterizes the driver as underinsured.

The term "underinsured" refers to a driver who has some liability coverage, but the amount is lower than the actual damages incurred from an accident. In this case, while the driver meets the minimum legal liability requirements, that coverage does not adequately compensate for the losses suffered by the insured party.

Understanding this definition is crucial because it helps individuals know their rights when involved in an accident with drivers who do not carry enough insurance. It can also impact the insured's own auto insurance needs, such as whether they should consider purchasing underinsured motorist coverage for additional protection.