Louisiana P&C Adjuster Practice Exam

Uninsured/Underinsured Motorist coverage pays for injuries caused by which of the following?

1. A driver with adequate liability insurance

2. A hit-and-run driver

3. A driver with state minimum liability coverage

4. All of the above

The correct answer is: A hit-and-run driver

Uninsured/Underinsured Motorist (UM/UIM) coverage is specifically designed to protect individuals from the financial consequences of being involved in an accident with a driver who lacks adequate insurance. One of the main scenarios where this type of coverage applies is when the at-fault driver is uninsured or underinsured. In the case of a hit-and-run driver, the UM coverage pays for injuries sustained by the insured individual because they are unable to identify or claim against the other party. The nature of a hit-and-run is that the responsible party cannot be traced or held accountable, thereby necessitating the need for UM coverage to provide financial support for medical expenses and other damages. Having adequate liability insurance, even if state minimum coverage is met, does not trigger UM/UIM coverage because the essence of this insurance relies on the other party being either completely lacking insurance or insufficiently covered for the costs incurred. Therefore, the only scenario where UM coverage is applicable among the choices is in the case of a hit-and-run driver, validating why this answer is considered correct.