GAP THEORY

gap theory. Insurance. The principle that a tortfeasor will be considered underinsured if his or her liabili-ty-insurance coverage — although legally adequate — is less than the injured party’s underinsured-motorist coverage. • This principle allows an injured party to invoke underinsured-motorist coverage. Cf. EXCESS THEORY. [Cases: Insurance 2787. C.J.S. Insurance § 1657.]