Underinsured motorist coverage insures against what?

Underinsured motorist coverage is specifically designed to protect individuals who suffer bodily injuries due to an accident caused by a driver whose insurance coverage is not sufficient to cover the damages. When a person is involved in an accident and sustains injuries, they may seek compensation from the at-fault driver’s insurance. However, if that driver does not have enough coverage to fully compensate for the injuries sustained, underinsured motorist coverage kicks in. This coverage allows the injured party to recover the difference between what the at-fault driver’s insurance pays and the actual amount of damages incurred, up to the underinsured motorist coverage limit.

This type of coverage is crucial because it ensures that, even if the at-fault driver has some level of insurance, the injured party can still have access to additional funds to cover medical expenses, lost wages, and other costs that may arise from their injuries. It enhances the overall protection that a policyholder has by providing an additional layer of financial security when facing accidents involving inadequately insured drivers.