Underinsured Motorist

Definition


Underinsured Motorist Coverage is a type of optional auto insurance protection available in most Canadian provinces (such as Ontario, Alberta, and British Columbia) that safeguards policyholders, their passengers, or family members if they are injured or their property is damaged in an at-fault accident caused by another driver whose bodily injury or property damage liability insurance limits are insufficient to cover the full extent of the losses.

For example, if the at-fault driver’s policy has a $200,000 liability limit (a common provincial minimum) but your total damages—such as medical expenses, rehabilitation, lost income, pain and suffering, or vehicle repairs—exceed that amount (e.g., $400,000), this coverage steps in to pay the shortfall, up to the underinsured motorist limit on your own policy (typically $1 million or higher, depending on what you purchase).

It differs from Uninsured Motorist Coverage, which applies only when the at-fault driver has no insurance whatsoever.

Coverage details, mandatory status, exclusions (e.g., for intentional acts or business use), and claim processes vary by province and insurer, so reviewing your policy or consulting a broker is recommended.

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Coverage Type

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