What does underinsured motorist coverage protect against?

Underinsured motorist coverage is designed to protect policyholders in situations where they are involved in an accident with a driver whose insurance coverage is inadequate to fully compensate for the damages incurred. This type of coverage steps in when the at-fault driver has liability limits that are less than the policyholder's actual damages, ensuring that the insured can recover additional costs that would otherwise not be covered by the other driver's insurance.

For example, if a policyholder is in an accident with a driver who has only minimal liability coverage, and the total damages from the accident exceed those limits, the underinsured motorist coverage would help cover the remaining expenses. This is a critical safety net as it ensures that individuals are not left undercompensated due to another driver's insufficient insurance.

Other options do represent different aspects of auto insurance but do not correctly define the specific protection offered by underinsured motorist coverage. For instance, drivers without any insurance would be addressed by uninsured motorist coverage, while damage to the insured’s own vehicle pertains to collision or comprehensive coverage rather than underinsured motorist protection. Lastly, property damage can be covered under various other insurance provisions, but underinsured motorist coverage specifically addresses the inadequacy of another driver's insurance in relation to bodily injury or harm