PSI Property and Casualty Practice Exam 2026 - Free Property and Casualty Practice Questions and Study Guide

To understand the amount an insured will recover from an at-fault driver's policy when they have underinsured motorists coverage, it’s essential to compare the limits of both policies. An insured with underinsured motorists coverage of 250/500/250 means they have potential coverage limits of $250,000 per person for bodily injury, $500,000 total for bodily injury per accident, and $250,000 for property damage.

The at-fault driver's policy limits are 20/40/10, indicating they offer $20,000 per person for bodily injury, $40,000 total for bodily injury per accident, and $10,000 for property damage.

When assessing underinsured motorists coverage, the purpose is to cover the difference in amounts if the at-fault driver's limits are insufficient to fully cover the insured's damages. In this scenario, if the insured has a bodily injury claim that exceeds the at-fault driver’s limits, they will only recover up to the amount of the at-fault driver's limits, which is the specific coverage maximum of $20,000 per person for bodily injury.

Since the at-fault driver's policy limits are low compared to the insured’s underinsured coverage limits, the insured can recover the maximum amount available