What type of coverage is designed to help when the at-fault driver has insufficient insurance?

Underinsured Motorist Coverage is specifically designed to provide financial protection when the at-fault driver does not have enough insurance to fully cover the damages incurred from an accident. This coverage kicks in when the bodily injury liability limits of the at-fault driver are lower than the medical expenses or damages that the insured party has suffered. It fills the gap between what the underinsured driver can pay and the actual costs of the damages, ensuring that the injured party can receive compensation that adequately reflects their losses.

In contrast, Collision Coverage pertains to damage to your own vehicle after an accident, regardless of who is at fault, and does not involve the liability of another driver’s insurance. Uninsured Motorist Coverage, while related, is meant for situations where the at-fault driver has no insurance at all. Personal Liability Coverage relates to the risk of being held liable for injury or damage caused to others and does not focus on the coverage for the policyholder in the context of an accident caused by another driver’s insufficient insurance.