When does underinsured motorist coverage apply?

Underinsured motorist coverage applies specifically in situations where the at-fault driver has insurance, but their coverage limits are insufficient to fully compensate for the damages caused in an accident. In this context, if the damages incurred by the insured exceed the at-fault driver’s policy limits, underinsured motorist coverage allows the injured party to claim additional compensation up to the limits of their own policy. This type of coverage is designed to protect drivers from financial loss when they are involved in accidents with motorists who possess inadequate insurance.

Other options do not align with the purpose of underinsured motorist coverage. For instance, if the other driver has no insurance, that situation would typically activate uninsured motorist coverage instead. An insured driver who is the cause of the accident would not be entitled to underinsured motorist coverage, as it is designed to cover losses inflicted by another party. Having more than one vehicle does not directly impact the activation of underinsured motorist coverage; it's focused on the insurance limits of the driver at fault for the accident.