Which statement best describes underinsured motorist coverage?

• A. It pays only for property damage
• B. It pays medical expenses only
• C. It pays when the at-fault driver's liability limits are insufficient to cover damages
• D. It covers theft of the insured's vehicle

Answer: (C)

Underinsured motorist coverage is designed to protect you when the driver who caused the accident doesn’t have enough liability insurance to pay for your damages. It steps in to cover the difference up to your own UIM limits once the at-fault driver’s liability limits have been exhausted. This protection typically relates to bodily injuries and the related losses, not theft of your car, and it isn’t limited to medical expenses only. The point is to fill the gap created by an underinsured driver, making it the best description of what this coverage does.