Imagine getting into a car crash and finding out that the person who hit you only has bare bones insurance coverage. The issue with this is that these victims might be forced to cover the difference between what is allowed in that bare bones coverage and what their expenses related to the accident are unless they can turn to a personal injury lawsuit or a claim with their own insurer.
Not all motor vehicles are fully insured. Actually, some are uninsured altogether. Underinsured motor vehicle coverage is meant to protect you in case you get involved in a car accident whose at-fault party is underinsured. This means that in case you are knocked down by an underinsured driver, you do not need to sue him/her. This is because such a driver has insufficient car insurance and therefore, cannot cover your damages.