What is the difference between an underinsured driver and an uninsured driver?

There are big differences between an uninsured motorist and an underinsured motorist.  An uninsured motorist is fairly easy to describe — he or she is someone who doesn’t have any insurance. Therefore, they have no insurance to provide coverage for damages and losses.

An underinsured motorist, by contrast, is someone who has insurance, but doesn’t have enough to cover the harm and losses they have caused as a result of an accident. For example, if a driver who causes a wreck has $25,000 of property damage insurance, but hits and totals a new car that will cost $30,000 to replace, then the driver is considered underinsured. It works the same for injury claims. If a driver has the minimum $30,000 of injury coverage, but hits someone and causes them harm of $50,000, the driver is underinsured.