The opinion of the Court was delivered by
This аppeal concerns the rights and obligations of parties under an insurance endorsement defining an increasingly vexatious subject — underinsured motorist (UIM) benefits. Simply stated, UIM coverage provides to an insured a measure of added protection against the risk of being injured by a negligent driver having an inadequate limit of liability insurance to cover the extent of the insured’s injuries. The question here is whether a bus driver from a school district, injured by an -underinsured driver while operating a school district bus, may recover UIM benefits under the policy purchased by the school district to cover the bus, or whether she is limited to the amount of UIM coverage purchased under her personal automobile insurance policy.
I
On April 28, 1991, plaintiff, Diana French, was driving a school bus for her employer, Hudson County Area Vocational Technical School (Hudson). A taxi cab struck the school bus in the rear and caused severe injuries to Ms. French. She has
*481
undergone multiple surgeries and has been unable to return to work since the accident. She brought an action in the Law Division against the taxi company, which ultimately settled for $25,000, the liability limits of the policy insuring the taxi. Plaintiff then sought benefits under the UIM coverage contained in the insurance policy issued to Hudson by the New Jersey School Board Insurance Group. That рolicy provided UIM coverage in the amount of one million dollars. At the time, plaintiff had personal automobile insurance through Allstate Insurance Company with UIM coverage in the amount of $25,000. Relying on our decision in
Aubrey v. Harleysville Insurance Companies,
140
N.J.
397,
II
Having been characterized as a “sleeping giant,”
Green v. Selective Insurance Company,
144
N.J.
344, 349,
UIM coverage is optional first party coverage insuring the policy holder, and others, against the possibility of injury or рroperty damage caused by the negligent operation of a motor vehicle whose liability insurance coverage is insufficient to pay for all losses suffered. The nature of the coverage is defined by N.J.S.A 17:28-l.le. The fact that it must be offered by insurers as a mandatory option is dictated by N.J.S.A 17:28-l.lb. N.J.SA 17;28-l.le prohibits the stacking of UIM benefits on either an intra-policy (ie., where an “insured” in a single policy that covers many cars may recover under UM coverage of each ear) or inter-policy (i.e., recovery from more than one policy for injuries sustained in a single accident) basis. The foregoing are the statutory sources of the coverage.
This coverage was first offered as a mandatory option in connection with the 1983 Legislation that adopted it (Section 1 of L.1983,
c.
362). The Appellate Division has described UIM coverage as a “stop gap measure” that essentially creates a framework within which one can purchase as much UIM protection as is desired, given the purchaser’s individual situation, that is, what coverage he or she can afford or desires.
See, e.g., Bauter v. Hanover Ins. Co.,
247
N.J.Super.
94, 96,
Once that threshold analysis results in a potential UIM claim (that is, the UIM limits “held” by the injured are in excess of the total liability limits cоvering the allegedly underinsured tortfeasor), recovery against the UIM coverage results only when the insured demonstrates that his or her damages exceed the liability limits involved. The principle was perhaps best articulated in Tyler, where the court observed:
The plain meaning of [N.J.S.A. 17:28-l.le] is that undermsured motorist benefits are available if (and to the extent that) the tortfeasor’s liability limits are lower than the limits of the undermsured motorist coverage contained in the plaintiffs policy.
The statute produces the same result if there is one injured claimant or many, or if the amount of damages exceed the tortfeasor’s liability limits, or even if multiple claims against one tortfeasor are, because of his liability limits, settled for amounts which are individually less than the underinsured motorist coverage available from *484 the claimants’ policy. A tortfeasor is not underinsured relative to plaintiffs damages, or relative to the judgment or judgments against him, but rather relative to the limits of the underinsured motorist coverage purchased by or for the person seeking recovery.
[ 228 N.J.Super. at 466,550 A.2d 168 .]
See also Calabrese v. Selective Ins. Co.,
297
N.J.Super.
423,
To those principles we add that when the UIM claimant passes the threshold analysis set forth above but fails to exhaust in settlement the liability policy limits insuring the underinsured tortfeasor, the full policy limits will still serve as the appropriate setoff against the UIM coverage. See
N.J.S.A
17:28-l.le;
Longworth v. Van Houten,
223
N.J.Super.
174,
With those basic principles in mind, we move to the issues projected by this appeal, which of necessity require that we resort, at length, to the text of N.J.S.A. 17:28-l.le:
For the purposes of this section, (1) “undеrinsured motorist coverage” means insurance for damages because of bodily injury and property damage resulting from an accident arising out of the ownership, maintenance or use of an underinsured motor vehicle. Underinsured motorist coverage shall not apply to an uninsured motor vehicle. A motor vehicle is underinsured when the sum of the limits of liability under all bodily injury and property damage liability bonds and insurance policies available to a person against whom recovery is sought for bodily injury or property damage is, at the time of the accident, less than the applicable limits for underinsured motorist coverage affоrded under the motor vehicle insurance policy held by the person seeking that recovery. A motor vehicle shall not be considered an underinsured motor vehicle under this section unless the limits of all bodily injury liability insurance or bonds applicable at the time of the accident have been exhausted by payment of settlements or judgments. The limits of underin *485 sured motorist coverage available to an injured person shall be reduced by the amount he has recovered under all bodily injury liability insurance or bonds.
[Emphasis added.]
Obviously, the statute expresses no mandate regarding the persons that are to be insured under the standard UIM endorsement. Nevertheless, in establishing the key threshold analysis to determine the existence of a potential UIM claim in the first instance (again, comparing the UIM limits with the tortfeasor’s liability limits), the statute directs that the potential UIM claimant is to use the UIM policy “held” by that person. As described in
Aubrey, supra,
the most reasonable interpretation of the word “held,” in the statutory context of
N.J.S.A
17:28-l.le, is that it pertains to the UIM policy actually purchased by or purchased for the benefit of the prospective UIM claimant. 140
N.J.
at 404,
The plaintiff in
Aubrey
was injured while she was driving a Tercel automobile loaned to her by the dealer from whom she had contracted to purchase the ear. The automobile pоlicy still in force on her old car provided UIM limits of $15,000 and liability limits of $15,000 for injury to one person and $30,000 for injuries to more than one person. While driving the Tercel, Aubrey sustained serious personal injuries in a three-ear accident. The insurers for the other drivers settled Aubrey’s claim by paying their policy limits, $25,000 and $15,000, for a total of $40,000. The dealer’s car that Aubrey was driving at the time of the accident was insured under a policy issued by Harleysville Insurance Company with UIM coverage of $1 million. Aubrey claimed UIM benefits as an insured under that policy. We held that because the automobile dealer’s policy contained a step-down provision that reduced the liability coverage available to the dealer’s customers to $15,000, and because the “parity” provision of
N.J.S.A
17:28-l.lb limits UIM coverage to the amount of the insured’s liability coverage, the UIM benefits available to Aubrey did not exceed the $15,000 that was available under her UIM coverage. We reasoned that there is a distinction “between an exclusion from the class of covered permissive users and a limitation on the
*486
coverage.” 140
N.J.
at 407,
Ill
A
As this case illustrates, we did not expect or intend that the amount of liability held under a personal insurance policy would be the sole criterion or litmus test for determining UIM coverage issues. In that regard, we note the problem that Aubrey has apparently been interpreted by some courts as establishing the UIM policy purchased by the injured person as not only the policy of “comparison” (for the purpose of gauging whether a UIM claim exists in the first place) but also as the only UIM policy that the injured person has resort to once that threshold test is met. That is simply too broad a reading. Indeed, other portions of the statute and the standard uninsured/underinsured motorist endorsement approved by the Commissioner of Insurance plainly envision one potentially being able to secure benefits under more than one UIM endorsement. In that regard, N.J.S.A. 17:28-l.lc states in pertinent part:
Uninsured and underinsured motorist coverage provided for in this section shall not be increased by stacking the limits of coverage of multiple motor vehicles covered under the same policy of insurance nor shall these coverages be increased by stacking the limits of coverage of multiple policies available to the insured.
Obviously, that provision contemplates one being an insured under multiple UIM policies, as there would be no reason to prohibit policy stacking if one could have access to benefits under only the *487 UIM policy one purchased, as described above. Moreover, the standard UM/UIM endorsement approved for use in personal New Jersey automobile insurance policies defines “insured,” for the purposes of UIM protection, as follows:
1. You or any “family member”;
2. Any other person “occupying your covered auto”;
3. Any person for damages that person is entitled to rеcover because of bodily injury to which this coverage applies sustained by a person described in 1. or 2. above.
Plainly, therefore, both the statute and the standard UIM endorsement contemplate situations in which one could conceivably receive benefits under more than one UIM policy. That issue, however, must be viewed as distinct from the one posed by focusing on the policy one “holds,” for the purpose of gauging the applicability of UIM insurance in the first instance.
B.
Rather than to have created a litmus test, we intended the
Aubrey
principle to be an indication of the fair expectations of parties when there are no surer indicators of policy language or statutory policy that would provide direction concerning when a UIM policy is “held” by a claimant. If the only trigger to UIM coverage were the limits “chosen” by an injured person, a broad class of victims such as those who did not own or did not drive automobiles would be entirely excluded from UIM coverage. They have “chosen” no coverage against which to compare the tortfeasor’s liability coverage. Certainly the Legislature could not have intended that such persons would receive no UIM benefits under the policy of a host vehicle.
See Di Ciurcio v. Liberty Mut. Ins. Co.,
299
N.J.Super.
426,
We note that even after the
Aubrey
decision, insurance companies seemed to assume that an employer’s UIM policy would cover an employee for work-connected injuries, although there might be a dispute about whether the employer’s policy or the personal policy would be primary.
American Reliance Ins. Co. v. American Cas. Co.,
294
N.J.Super.
238,
Bejecting an overly expansive reading of Aubrey similar to the one urged by [the employer’s UIM carrier], we held in Taylor v. National Union Fire Ins. Co., 289 N.J.Super. 593,674 A.2d 634 (App.Div.), certif. denied, 145 N.J. 376,678 A.2d 716 (1996), that an employee who was injured while operating a car provided for his personal use as part of his compensation package, which was insured under the employer’s business automobile policy, was entitled to the UIM benefits provided thereunder. Although the purchaser of the business automobile policy was the employer, we concluded that the injured employee was entitled to full coverage under the policy because “[the employee] was a specifically named insured for that specific car.” Id. at 599,674 A.2d 634 . We reached this conclusion even though the employee also maintained a personal automobile policy which provided coverage for two family automobiles.
Although Cook-Sauvageau was not specifically named in [the employer’s] business automobile policy, it is as dear in this case as it was in Taylor that the essential risk for which [the carrier’s] business automobile policy was intended to provide coverage was an acddent involving an employee’s operation of one of the employer’s vehicles. In fact, as the court observed in Murphy v. Milbank Mut. Ins. Co., 438 N.W.2d 390, 395 (Minn.Ct.App.1989), “[t]he employees of an insured corporation are in actuality the objects of the corporation’s automobile liability coverage.” Furthermore, the UIM benefits are an integral part of this coverage. Under [the UIM] policy, UIM benefits are provided to any person “ ‘occupying’ a covered ‘auto,’ ” which certainly includes an employee of the insured who is injured while operating one of its vehicles during the course of employment. Although an employee’s personal automobile policy also may provide UIM coverage for such an accident, the “Other Insurance” dause of the standard automobilе liability policy would make the UIM coverage provided by the employer’s policy “primary” and any coverage provided by the employee’s personal policy only “secondary.” See American Reliance Ins. Co. v. American Casualty Co., 294 N.J.Super. 238,683 A.2d 205 (App.Div.1996); Royal Ins. Co. v. Rutgers Casualty Ins. Co., 271 *489 N.J.Super. 409,638 A.2d 924 (App.Div.1994). Consequently, it would be manifestly inconsistent with the plain language of the UIM endorsement of [the carrier’s] business automobile policy and with the reasonable expectations of both the employer and employee to deny the benefits of UIM coverage to an employee injured while operating one of the employer’s vehicles during the course of employment.
[Id. at 626-27,685 A.2d 978 .]
We acknowledge that
Cook-Sauvageau
and
American Reliance
each involved an employee who, givеn the policy limits of the various liability and UIM policies involved, was able to assert a UIM claim either under his or her personal UIM policy or under the employer’s policy through qualifying as a person entitled to receive benefits on the basis of “occupying” the employer’s insured vehicle. In both of those decisions, therefore, the UIM claimant seeking to assert a claim for UIM benefits under the employer’s policy had also passed the threshold test under the claimant’s personal UIM policy. (In each case, the benefits under the employer’s policy were greater than under the personal.) However, we believe that the Legislature clearly would have intended that the policy “held” by a claimant under
N.J.S.A
17:28-l.le would include a policy provided for the claimant by an employer even if coverage under the personal policy of the employee were not triggered.
Taylor v. National Union Fire Insurance Company,
289
N.J.Super.
593, 600,
[R]eseareh has failed to disclose any holding among our sister states denying UIM coverage to an employee under an employer’s business auto policy that includes endorsements adding the employee as the named insured of a designated covered vehicle provided the employee is injured while using that vehicle. To the contrary, that coverage is regularly and routinely afforded the employee, whether or not also extended to his family members, unless contradicted by express policy exclusions, not the case here.
The risks of driving a personal car from home to grocery store, soccer field, or church are qualitatively different from driving a bus on the Turnpike or Parkway. Employers and employees might most naturally contemplate greater coverage for greater risks. The language and reasoning of Cook-Sauvageau and Tay *490 lor support that conclusion. We accept that analysis and reverse the judgment in this case in accordance with that reasoning.
C.
In the course of deciding
Aubrey,
the Court disapproved of the holding in
Landi v. Gray,
228
N.J.Super.
619,
The trial court invalidated the
Landi
exclusion as contrary to public policy because it was repugnant to N.J.S.A 17:28-1.1. The Appеllate Division agreed, holding that once an insured has elected to purchase UIM coverage, the carrier may not cut back the statutory scope of such coverage by excluding vehicles owned by any member of the family from the policy definition of an underinsured motor vehicle. The Appellate Division relied on
Motor Club
*491
of America Insurance Company v. Phillips,
66
N.J.
277,
The UIM statute provides that “uninsured motorist coverage shall be subject to the policy terms, conditions and exclusions approved by the Commissioner of Insurance.” N.J.S.A 17:28-l.ld. No similar provision governs the policy terms for underinsured motorist coverage. The different legislative concern for the two forms of insurance is that availability of uninsured motorist benefits affects all ratepayers of insurance (all auto insurance *492 companies pay a portion of their premiums into the Uninsured Motorist Fund), whereas the availability of UIM benefits affects only the parties insured under the contract.
In appellate review of an insurаnce policy, the court construes the policy as any other contract to give effect to the parties’ intentions at the time the contract was made. Where the terms of such a contract are clear, they are to be accorded their plain and ordinary meaning____ The parties to an insurance contract may contract for any lawful coverage, and the insurer may limit its liability and impose restrictions and conditions upon its obligation under the contract not inconsistent with public policy or statute.
[Leader Nat'l Ins. Co. v. American Hardware Ins. Group, 249 Neb. 783,545 N.W.2d 451 , 455 (1996) (citations omitted) (deciding issue similar to Aubrey, supra, 140 N.J. 397,658 A.2d 1246 ).]
Our law is the same.
See Royal Ins. Co. v. Rutgers Cas. Ins. Co.,
271
N.J.Super.
409, 419,
So long as the terms and conditions of coverage are fairly disclosed, no public policy or statute prevents the exclusion of UIM coverage when it is the underinsured vehicle of the resident family member that causes the injury.
By the same token, as this case illustrates, no public policy or statute prevents an insurance company from providing greater coverage to an insured person than is provided under the personal insurance of that insured.
For example, no public policy or statute should prevent a parent from рroviding UIM coverage for a resident-child greater than the child might have on a personal auto so long as the risk is understood and accepted by the insurance company. After all, the parent is likely to bear the burden of any unreimbursed expenses and to empathize with the uncompensated suffering of a child. We note that the New Jersey Auto Insurance Buyers Guide, reprinted in the Administrative Code, describes Uninsured/Under-insured Motorist Coverage thus:
*493 Umnsured/Underinsured Motorist Coverage
(Required by Law)
Despite New Jersey law, which requires auto insurance, many cars are not covered by insurance. Some motorists break the law. Many other motorists are residents of other states which do not require auto insurance by law.
Because these motorists can cause accidents, you are required to buy uninsured motorist coverage. This coverage does not benefit the uninsured driver. It will provide benefits to you, your passengers or relatives living with you if a motorist without insurance is legally liable for injuries to these persons or for damage to your ear or its contents.
There are other motorists who have auto insurance coverage but with very low limits. When you buy uninsured motorist coverage above the minimum limits required by law, you are also provided coverage to protect you from those motorists who are underinsured. If you are in an accident caused by such a motorist, underinsured motorist coverage will pay damages up to the difference between your underinsured motorist coverage limit and the other driver’s liability coverage limit.
[N.JA.C. 11:3-15.6 (emphasis added).]
If the policy were intended to exclude UIM coverage for one’s spouse or child, we would expect that intent to be clear. Like the head of a household, an employer will often wish to insure that the injuries of employees are fully compensated, if only to benefit from the employees’ continued well-being. Conversely, an insurance company is not forbidden to limit UIM coverage for family members or employees who have other insurance.
However, when the intent of parties to the insurance contract to extend coverage to others is uncertain, the matter of personal choice may become the dominant theme. In a series of cases, the Appellate Division has
read Aubrey as standing for the principle that if a person is injured while fortuitously using or occupying a vehicle covered by a policy under which the person is not a named insured, that person’s UIM recourse is defined by [the injured person’s] “own” policy and not by the policy covering the fortuitously occupied vehicle or, indeed, any other policy.
[Taylor, supra, 289 N.J.Super. at 599,674 A.2d 634 (citation omitted).]
IV
Our function in construing these [UIM] policies of insurance, as with any other contract, is to search broadly for the probable common intent of the parties in an *494 effort to find a reasonable meaning in keeping with the express general purposes of the policies. In this pursuit, we cannot emphasize too strongly that when an insurance policy is clear and unambiguous ... the court is bound to enforce the policy as it is written. It is not the function of the court to make a better contract for the parlies than they themselves have seen fit to enter into or to alter it for the benefit of one party and to the detriment of the other.
[Royal Ins. Co., supra, 271 N.J.Super. at 416,638 A.2d 924 (citations and internal quotation omitted).]
In Aubrey, the plain language of the step-down provisions of the dealer’s рolicy limited the available liability coverage and consequently the UIM coverage to the same amount as Aubrey’s policy. Aubrey “held” no UIM coverage greater than the limits of liability held by the negligent operator. In Landi, the plain language of her mother’s policy limited the UIM coverage available to Dawn when the operation of another family car caused her injuries. She thus “held” no UIM coverage greater than the tortfeasor’s. In this ease, the plain language of the policy and the undoubted common intent of the parties to the UIM contract is that the policy covers the bus driver as an employee of the school district. The language of the policy is unambiguous in this regard. The UIM endorsement covers anyone “occupying a covered auto.” By whom is a policy of the fictitious being of a corporation “held” if not by corporate employees? Diana French thus “held” UIM coverage greater than the tortfeasor’s liability coverage.
Policy drafters have either anticipated or can anticipate most of the recurring problems in this area. For example, the standard form of the 1996 insurance agreement on file with the Department of Insurance provides that if a person is not a named insured under a UIM policy (as in the case of one who occupies the car of another), that occupant, although an insured under the policy of the host car, is not considered eligible for UIM coverage under the host’s policy unless the limits of liability on the vehicle of the negligent operator are less than the limits of liability held by the occupant as a named insured, or as a spouse or family member under the policy of a named insured. Presumably, under that language, a passenger in the ear of another would not be eligible for UIM benefits under the host’s policy unless the tortfeasor’s *495 limits of liability were less than those under the passenger’s personаl policy.
In this case, involving a full-time employee of an enterprise, the probable fair expectations and common intent of an insurance company and policyholder, absent specification to the contrary, are that the policy provide UIM coverage for employees of the business entity, in this case the bus driver herself.
We expect that there will not be many cases that will not be covered by clear policy language. Still, other complexities remain. For example, once the threshold test for a UIM claim has been met, the statute contemplates that the insured is free to pursue UIM bеnefits under other policies under which he or she may be insured — whether under his or her personal policy, as the occupant of an employer’s vehicle, the permissive occupant of a motor vehicle owned by any other insured person, or as the resident in the household of a relative possessing his or her own UIM insurance. Each of those UIM policies is opened up to the insured once the threshold test is met.
Supra
at 485-486. Of course, in any multiple policy setting,
N.J.S.A
17:28-l.lc, or at least the first sentence thereof, applies and prohibits stacking of UIM benefits on either an intra-policy or inter-policy basis. We have granted certification in
Magnifico v. Rutgers Casualty Insurance Company,
149
N.J.
407,
The judgment of the Appellate Division is reversed and the matter is remanded for arbitration of plaintiffs UIM claim.
*496 For reversal and remand — Chief Justice PORITZ and Justices HANDLER, POLLOCK, O’HERN, GARIBALDI, STEIN and COLEMAN — 7.
Opposed — None.