When does the underinsured motorist coverage apply?

• A. When the motorist is at fault in an accident, but the limits of his/her auto insurance are not sufficient to cover the bodily injury to another motorist
• B. When the other driver is at fault and has unlimited liability coverage
• C. When theft occurs of the insured vehicle
• D. Only when the insured is injured

Answer: (A)

Underinsured motorist coverage steps in when the driver who caused the accident doesn’t have enough liability coverage to pay all the bodily injury damages. Your own policy pays the amount that’s short, up to your UM limit, so you’re not left paying out of pocket. This protects you specifically in injuries caused by someone who is at fault but underinsured. It doesn’t apply for theft (that’s a different coverage) and it isn’t triggered if the other driver has unlimited liability; in that case there’s no shortfall to cover. It also requires that you’ve suffered bodily injury from the crash.