What is 'uninsured motorist' (UM) coverage on a Personal Auto Policy?

Uninsured Motorist (UM) coverage pays the insured (and family members and passengers) for bodily injury caused by a driver who has no liability insurance. UM essentially provides the missing liability coverage from the at-fault driver. Required in many states, optional in others; some states require it to be offered with affirmative rejection in writing. Limits typically match the insured's liability limits. Underinsured Motorist (UIM) coverage applies when the at-fault driver has insurance but with insufficient limits — the insured's UIM coverage pays the difference between the at-fault driver's limits and the insured's damages, up to the UIM limit. Some states have combined UM/UIM; others treat them separately. UM/UIM is one of the most important auto coverages because many drivers are uninsured (~12% nationally) or have only state-minimum limits.