Underinsured Motorist Coverage Limits Trigger
Definition - What does Underinsured Motorist Coverage Limits Trigger mean?
An underinsured motorist coverage limits is one type of coverage an insured party can buy for protection against losses that result from an accident with a driver who does not have sufficient insurance. This trigger ensures that the underinsured motorist coverage comes into play when the underinsured driver causes an accident and their liability limit is lower than that of the insured party.
Insuranceopedia explains Underinsured Motorist Coverage Limits Trigger
For instance, consider a situation in which driver A's $400,000 underinsured motorist coverage has a limits trigger. Driver B, who only has liability insurance with a coverage of $100,000, causes an accident. If driver A files a claim of $300,000, then their underinsured motorist coverage would come into effect because of the limits trigger because driver's B liability coverage is too low.