Non-lawyers often have difficulty grappling with a vitally important insurance coverage, uninsured motorist. From the start it is a bit of a misnomer. It really should be called uninsured or underinsured motorist coverage because its applicability is broader than merely covering literal "uninsured " motorists.
Lets try an example. Adnan gets injured when a motorist runs a red light and t-bones his car. He is taken by ambulance to the hospital where he stays for two nights to ensure he doesn't have major injuries and then he goes home where he stays off work for four weeks pursuant to doctor's orders and spends two months getting physical therapy.
His total medical expenses are twenty two thousand dollars and his lost wages are twelve thousand dollars. The at fault driver has Maryland's minimum liablity coverage of $30,000.00.
Clearly Adnan's case is worth more than the at-fault driver's policy limits, how can he be made whole? The answer is through his uninsured motorist coverage. As long as his U.M. is greater than the at-fault driver's liability coverage a claim can be made against Adnan's policy for "underinsured" motorist benefits.
The mechanism for this is a bit clunky but essentially once the at-fault driver's insurance company puts up their liability limits, Adnan or his lawyer writes the underinsured motorist carrier a certified letter showing the written settlement offer of the at-fault driver's liability insurance limits.
The underinsurer then has sixty days to either authorize the injured victim to sign a release of all claims arising from the crash against the at-fault driver or pay the sum offered by the at fault insurer while the victim retains the right to claim more benefits.
Again in the Adnan example, he either gets $30,000.00 from the at-fault insurer or the same sum from his own policy and either way can seek more money from his own insurance uninsured motorist policy. For legal research purposes take a look at 19-511 of the Insurance article of the Maryland Annotated Code, it explains the mechanics of such claims.