The Alabama Legislature passed a bill to raise the minimum amount of automobile liability insurance that motorists must purchase. The current limits under Alabama’s mandatory insurance law are $20,000 for a single injury or death, $40,000 for multiple injuries or deaths, and $10,000 for property damage. The House gave final approval to the bill raising the mandatory minimum limits to $25,000, $50,000 and $25,000. The bill, sponsored by Senator Roger Bedford, passed the Senate without a dissenting vote in February. It was sent to Governor Bob Riley, who must sign it in order for the bill to become law. The limits haven’t been changed since 1983 and an increase was long overdue. Unfortunately, the limits are still very low, even with these changes.
The new bill, if signed, will take effect in three months for new policies and six months for renewals. I will be surprised if the Governor doesn’t sign the bill into law. The new minimums bring Alabama in line with the insurance requirements in Arkansas, Georgia, Mississippi, South Carolina and Texas. Tennessee, Virginia and Kentucky have the same limits for injuries and deaths but smaller amounts for property damage. Florida and Louisiana have lower amounts across the board. North Carolina’s minimums are higher for injuries and deaths than the new amount in Alabama, according to the Insurance Information Institute. Rep. Marc Keahey, who guided the bill through the House, told Phil Rawls with the Associated Press that the higher liability requirements would affect less than 10% of Alabama’s motorists and cause them to pay only $20 to $30 more per year.
Interestingly, the bill also raises the minimum amount of uninsured motorist coverage to match the liability coverage. There is another matter to consider relating to this coverage. I would recommend that people who really want to get protection for themselves and their families should increase the uninsured motorist coverage under their own policy to the largest amount that their liability insurance company will write. That amount can be at least $300,000. They can get an umbrella policy, also, that affords as much as a million dollars in additional uninsured motorist coverage. As you know, uninsured motorist coverage is optional in Alabama. It kicks in when the driver at fault in an accident has no insurance or too little insurance to cover all the damage. If a motor vehicle accident occurs where the person at fault has liability insurance, but the coverage is inadequate, that is when the amount of underinsured motorist coverage is important. Higher uninsured motorist coverage is needed and would be available under your policy when you are in a motor vehicle accident involving serious injuries and possibly death for persons in your vehicle. If the other party (wrongdoer) has only the minimum liability insurance coverage, or inadequate coverage in any amount, your underinsurance coverage will kick in.
As a matter of interest, a study released last year by the nonprofit Insurance Research Council showed that 25% of Alabama drivers lacked insurance between 1999 and 2004. That tied Alabama with California for the second-highest percentage of uninsured drivers. Mississippi was first. Of those who have liability insurance the available limits are often inadequate to cover the claims that can be involved in a serious motor vehicle accident.
Source: Associated Press
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