What type of insurance assists when an at-fault driver has insufficient liability limits to cover damages?

Underinsured Motorists Coverage is designed specifically to protect individuals in the event that they are involved in an accident where the at-fault driver does not have sufficient liability insurance to fully cover the damages incurred by the victim. This coverage comes into play when the damages exceed the at-fault driver’s liability limits, ensuring that the injured party can still seek compensation for their medical expenses, property damage, and other related costs.

This type of coverage is crucial because even though the at-fault driver has insurance, it may not be enough, especially in serious accidents with extensive damages. Underinsured Motorists Coverage helps fill that gap, allowing the insured party to seek additional compensation from their own policy, rather than facing potentially significant financial burdens.

The other options do not address this specific scenario. Uninsured Motorists Coverage is for situations where the at-fault driver has no insurance at all, rather than insufficient coverage. Health Insurance is unrelated to auto liability situations and focuses on medical expenses, while Homeowners Insurance pertains to property protection and liability related to home ownership, not auto accidents.