What is the function of underinsured motorist coverage?

Underinsured motorist coverage is specifically designed to provide additional protection when the at-fault driver's insurance coverage is not sufficient to fully compensate the injured party for their damages. This type of coverage acts as a safety net, ensuring that if another driver causes an accident but has lower liability limits than what is needed to cover medical bills, lost wages, and other damages incurred by the insured, the underinsured motorist coverage will help bridge that gap.

For example, if a person is severely injured in an accident caused by another driver who only has a $25,000 liability policy, but the injuries and damages total $50,000, the underinsured motorist coverage would enable the injured party to claim the remaining $25,000 from their own policy. This functionality is crucial for ensuring that individuals are not left financially vulnerable when they are involved in accidents with drivers who cannot provide adequate compensation for their wrongdoings.