Georgia Adjuster Practice Test

Which situation would typically require the use of underinsured motorist coverage?

1. The insured's vehicle is damaged by nature.

2. The other driver has insurance but not enough to cover all damages.

3. The insured intentionally caused an accident.

4. The accident involves a parked vehicle.

The correct answer is: The other driver has insurance but not enough to cover all damages.

Underinsured motorist coverage is designed for scenarios where the at-fault driver has insurance, but the coverage limits are insufficient to fully compensate the injured party for their damages. This type of coverage kicks in when the insured's losses exceed the at-fault party's liability coverage, allowing the insured to recover the difference up to the limits of their own underinsured motorist policy. In context, the other choices do not relate to underinsured motorist coverage. Damage caused by natural events does not pertain to the actions of another driver and instead falls under comprehensive coverage. Intentionally causing an accident excludes the insured from recovering damages through any other driver’s insurance, as most policies don't cover intentional acts. Accidents involving parked vehicles might lead to liability claims, but these typically wouldn't involve underinsured motorist coverage unless an underinsured party is involved in a more complex scenario. Therefore, the use of underinsured motorist coverage is specifically applicable when the other driver lacks sufficient insurance to cover the total damages incurred by the insured.