What type of coverage applies when the at-fault party's liability limits are insufficient to cover the damages?

Underinsured Motorists (UIM) Coverage is designed to protect individuals when they are involved in an accident with a driver whose liability insurance limits are not adequate to cover the damages resulting from the accident. This situation often arises when the at-fault party has lower liability limits than the amount of the claim being made by the injured party.

UIM coverage allows the insured to collect additional compensation up to their own policy limits to cover any remaining costs after the at-fault party's insurance has been exhausted. This can include expenses such as medical bills, lost wages, and pain and suffering. Having this coverage is crucial for drivers to ensure they are not left financially vulnerable due to another party's insufficient insurance.

In contrast, the other types of coverage listed serve different purposes. Comprehensive Coverage protects against damage to a vehicle from non-collision events such as theft or natural disasters. Collision Coverage addresses damage to the insured’s vehicle resulting from a collision, regardless of fault. Liability Coverage provides protection against claims made by other parties for bodily injury or property damage that the insured may be legally obligated to pay, but it does not extend to claims where the at-fault party's coverage is inadequate. Therefore, UIM coverage specifically addresses the gap created by insufficient liability limits from