Underinsured Motorist Coverage Limits Trigger

AAA

DEFINITION of 'Underinsured Motorist Coverage Limits Trigger'

One of the two triggers that can be specified by an insured party to protect against losses caused by an accident with a driver who has insufficient insurance. The underinsured motorist coverage limits trigger ensures that in the event of an accident caused by a driver with inadequate insurance, the underinsured motorist coverage comes into effect when the underinsured driver's liability limit is lower than that of the insured person or policy holder. The other trigger for underinsured motorist coverage is the damages trigger.

INVESTOPEDIA EXPLAINS 'Underinsured Motorist Coverage Limits Trigger'

For example, assume an insured person has underinsured motorist coverage up to $500,000 with a limits trigger. In the event of an accident with an at-fault driver who only has $100,000 of insurance coverage, an insurance claim of $150,000 would result in the policy holder's underinsured motorist coverage kicking in because of the limits trigger.



RELATED TERMS
  1. Underinsured Motorist Coverage

    An auto insurance policy provision that extends coverage to include ...
  2. Auto Insurance

    A policy purchased by vehicle owners to mitigate costs associated ...
  3. Insurance Claim

    A formal request to an insurance company asking for a payment ...
  4. Triggering Event

    1. A tangible or intangible barrier or occurrence that, once ...
  5. Adjuster

    An insurance claims agent. A claims adjuster is charged with ...
  6. Deductible

    1. The amount you have to pay out-of-pocket for expenses before ...
RELATED FAQS
  1. What impact does disposable income have on the stock market?

    In theory, the impact that disposable income has on the stock market is that a widespread increase in disposable income leads ... Read Full Answer >>
  2. How can stock dividends provide protection against inflation?

    Stock dividends protect against inflation by providing tangible returns that supplement capital returns from rising stock ... Read Full Answer >>
  3. What types of risk should an investor consider before investing in the chemicals ...

    The chemicals sector is highly regulated and most businesses in the sector monitor supply chain risks very closely. Chemical ... Read Full Answer >>
  4. What types of industries are the main consumers of the products of the chemicals ...

    A variety of different industries use chemical products. Construction, automotive manufacturing and other industrial manufacturing ... Read Full Answer >>
  5. How important are seasonal trends in the automotive sector?

    The automotive industry has some definite seasonal trends, with peak demand occurring in the spring and fall, and lowest ... Read Full Answer >>
  6. How is the basket of goods selected for the Consumer Price Index?

    In the United States, the inflation level in the economy is approximated by the Bureau of Labor Statistics via a basket of ... Read Full Answer >>
Related Articles
  1. Insurance

    Understanding Your Insurance Contract

    Learn how to read one of the most important documents you own.
  2. Home & Auto

    The History Of Insurance

    The first written policy appeared in Hammurabi's Code. Find out how it evolved from there.
  3. Home & Auto

    5 Insurance Policies Everyone Should Have

    Insurance policies come in a wide variety of shapes and sizes. Shop carefully and the right policies will go a long way towards helping you protect your assets.
  4. Insurance

    How Much Life Insurance Should You Carry?

    Learn how much - if any - insurance you really need.
  5. Options & Futures

    Beginner's Guide To Auto Insurance

    Find the perfect policy that suits both your coverage and budgetary needs.
  6. Options & Futures

    Top Tips For Cheaper, Better Car Insurance

    Accident, theft, vandalism - make sure your coverage will protect you when you need it most.
  7. Insurance

    The True Cost Of Owning A Car

    Driving is often the most convenient way to get around, but it'll cost you.
  8. Stock Analysis

    How Altria Lights Up Portfolios

    A look at how the highly profitable brands of tobacco giant Altria just won't quit.
  9. Savings

    How to Invest in Liquor (and Avoiding the Hiccups)

    Investing in liquor has been profitable for ages but there could be some hiccups along the way.
  10. Economics

    What are Consumer Goods?

    Products that are purchased for consumption by the average consumer. Clothing, food, automobiles and jewelry are all examples of consumer goods

You May Also Like

Hot Definitions
  1. Geometric Mean

    The average of a set of products, the calculation of which is commonly used to determine the performance results of an investment ...
  2. Fisher Effect

    An economic theory proposed by economist Irving Fisher that describes the relationship between inflation and both real and ...
  3. Fiduciary

    1. A person legally appointed and authorized to hold assets in trust for another person. The fiduciary manages the assets ...
  4. Expected Return

    The amount one would anticipate receiving on an investment that has various known or expected rates of return. For example, ...
  5. Carrying Value

    An accounting measure of value, where the value of an asset or a company is based on the figures in the company's balance ...
  6. Capital Account

    A national account that shows the net change in asset ownership for a nation. The capital account is the net result of public ...
Trading Center