Does underinsured motorist coverage provide protection when the other driver's insurance coverage is insufficient for bodily injury?

Underinsured motorist coverage is designed specifically to protect policyholders when they are involved in an accident with a driver whose insurance coverage is not enough to cover the resulting bodily injury costs. This type of coverage kicks in when the at-fault driver’s liability limits are lower than the medical expenses and other related costs incurred by the injured party.

By having underinsured motorist coverage, the policyholder can claim compensation through their own insurance up to the limits of their policy for any additional amount needed beyond what the other party's insurance can cover. This ensures that individuals are not left to bear financial burdens resulting from accidents caused by drivers who do not carry sufficient insurance. Thus, this type of coverage is particularly important in situations where injuries exceed the limits of the other driver’s policy, providing a critical safety net for those involved in an accident.