What term refers to a vehicle driven by someone with insufficient liability insurance?

The correct term for a vehicle driven by someone with insufficient liability insurance is "Underinsured Motor Vehicle." This designation is crucial because it specifically addresses situations where the driver has liability coverage, but the amount is not enough to fully cover the damages or injuries incurred in an accident.

Understanding this distinction is important because different coverages apply based on whether a driver is uninsured, underinsured, or fully insured. An "underinsured motor vehicle" typically comes into play when the other party's insurance is inadequate when it comes to compensating for injuries or property damage after an accident. This is particularly relevant when discussing protection limits in auto insurance policies and the means by which individuals can seek recovery in the event of an accident.

While "uninsured motor vehicle" refers to vehicles operated by individuals who do not carry any liability insurance at all, this term does not apply to those who are simply underinsured. Therefore, it is essential to clearly differentiate between these situations to accurately interpret coverage types and the responsibilities of drivers on the road.