What does underinsured motorist coverage do?

Underinsured motorist coverage is designed to protect you in the event that you are involved in an accident with a driver whose insurance policy does not provide adequate coverage to pay for the damages or injuries they have caused. This type of coverage specifically addresses the situation where the at-fault party has insurance, but the limits of their policy are insufficient to cover the full extent of your damages.

For instance, if you suffer medical expenses, lost wages, or property damage totaling $50,000, but the at-fault driver only has coverage limits of $25,000, your underinsured motorist coverage would help pay the remaining costs that exceed the other driver's coverage limit.

This coverage adds a layer of financial protection, ensuring that you are not left bearing the financial burden when another driver is at fault but inadequately insured. Therefore, understanding the importance of underinsured motorist coverage is crucial for maintaining financial security in the event of an accident.