ABA Family Legal Guide

Automobiles

Accidents and Insurance

Insurance

Do underinsured motorist policies differ?

Yes. A minority of those states that recognize this insurance option weigh the insured accident victim's damages against the driver at fault's liability coverage, compensating the injured person only if the driver at fault's liability coverage is less than the damages the victim suffered or was entitled to receive. Other states examine the injured person's uninsured motorist coverage and the driver at fault's liability insurance, with the insurance carrier paying out only when the driver at fault's liability insurance limit is less than the victim's underinsured motorist coverage. Most policies enable the insurer to deduct ("set off") the amount the victim receives from the driver at fault from the sum it pays to the victim carrying the underinsured motorist protection.