What is the purpose of "underinsured motorist coverage"?

Underinsured motorist coverage is specifically designed to protect insured drivers in situations where they are involved in an accident with another driver whose insurance coverage is insufficient to cover the damages incurred. This type of coverage comes into play when the at-fault party's liability limits are lower than the actual damages suffered by the insured party.

In essence, if you have underinsured motorist coverage and are hit by a driver who does not have enough insurance to pay for your damages, your own policy will help cover the difference up to your coverage limit. This ensures that you are financially protected, reducing the likelihood of being left with significant out-of-pocket expenses due to another party's inadequate insurance.

The other answer choices relate to different types of coverage or scenarios not relevant to the specifics of underinsured motorist coverage. For example, coverage for uninsured drivers is a separate entity designed to protect against drivers with no insurance. Damages caused by natural disasters fall under property insurance policies. Reimbursing lost income is typically associated with coverage types that address wage loss due to injuries, rather than liability coverage related to vehicle accidents.