Which coverage helps when the at-fault driver is underinsured?

The coverage that assists when the at-fault driver is underinsured is Underinsured Motorist (UIM) coverage. This type of coverage is specifically designed to provide additional protection to policyholders when they are involved in an accident with a driver whose insurance limits are insufficient to cover the damages incurred in the accident. In such instances, UIM will cover the difference between what the at-fault driver’s insurance offers and the total costs of the injuries or damages that the victim is facing.

For example, if the at-fault driver has only $20,000 in coverage and the costs of the injuries or damages amount to $50,000, UIM kicks in to help cover the additional $30,000, up to the policyholder’s UIM limits. This ensures that the insured does not suffer a financial burden due to the inadequacy of the other party's insurance.

In contrast, uninsured motorist (UM) coverage typically applies when the other driver does not have any insurance at all. Collision coverage refers to the insured’s own policy that covers their vehicle in the event of a collision, regardless of who is at fault. Economic only coverage specifically addresses limited scenarios of financial loss without comprehensive bodily injury or property damage coverage. Therefore, UIM