Having the right car insurance protects you financially when you’re involved in a car accident, especially if that accident is your fault. Read your policy’s declarations page, which outlines your coverage, policy limits and deductibles. If you don’t understand something, ask your agent for clarification. It’s too late to change your policy after an accident.
Insurance Requirements In Alabama
Alabama has a Mandatory Liability Insurance Law, which legally requires drivers to purchase liability coverage that includes:
- $25,000 (per person) bodily injury liability
- $50,000 (per accident) bodily injury liability
- $25,000 property damage liability
Liability insurance helps you pay for injuries or damages caused by you during a car accident, but the state’s minimum requirement isn’t always adequate. Purchase the most coverage you can afford to better protect yourself. Remember, liability coverage covers only the other person’s injuries or property damage and not yours.
Uninsured/underinsured motorist coverage is optional in Alabama, but all drivers should carry this extremely important coverage. If you’re leasing or financing your vehicle, the financial institution will require comprehensive and collision insurance to cover damages to your own vehicle.
Comprehensive and Collision Insurance
Comp and collision insurance covers repair and replacement of your own vehicle. Collision insurance covers damages during a car accident, whether it’s with another vehicle or object. Comp covers events that aren’t accident-related, such as vandalism, theft, fire, natural disasters, falling objects or hitting an animal.
Bodily Injury Liability Insurance
Coverage for bodily injury protects you financially when you’re at fault and physically injure anyone else. This covers medical expenses, long-term nursing care and funeral costs, but it also can help pay for lost income and pain and suffering. Bodily injury includes a per-person limit and a total per-accident limit, so if you’re coverage isn’t sufficient, you could be sued to cover the remainder.
For example, if you only have a $25,000 per person policy and you significantly injure another person, and it is your fault, you could be personally responsible for medical bills and damages above the $25,000 amount of coverage.
Property Damage Liability Insurance
Property damage insurance covers damages to property belonging to someone else. This is most often to cover repair or replacement of damaged vehicles, but can cover damage to other personal property, such as fencing or a house. Property damage liability covers a maximum amount per accident, with no limit per person.
Because vehicles are more expensive now than when the state minimal liability law was enacted, we advise our clients to maximize this coverage to avoid any persona liability. To help explain with a hypothetical situation, let’s say you get in an accident that is your fault and you total out another party’s brand-new Mercedes SUV and it is a $100,000 automobile. If you only have a $25,000 property damage liability policy then your insurance will only pay $25,000 towards that loss. This means you could be personally responsible for the remainder $75,000.
Medical Payment Coverage/ Personal Injury Protection Coverage
Medical Payment Coverage (Med-Pay) and Personal Injury Protection Coverage (PIP) are similar in how each coverage acts in an accident. Med-Pay and PIP coverage cover the occupants of your vehicle when you are in an accident, no matter whose fault the accident is. This is why it is commonly referred to as No-Fault coverage. The coverage typically has lower limits such as $5,000.
Med-Pay and PIP are similar to a built-in health insurance plan that covers medical bills and out-of-pocket expenses for injuries to the parties in your vehicle at the time of the accident. The amount of coverage is for each occupant in your vehicle. For example, if you have a $5,000 Med-Pay policy and had 3 occupants in your vehicle, each party would receive up to $5,000 in benefits to pay medical bills and/or providers.
Uninsured/Underinsured Motorist Coverage
Under Alabama law, vehicle owners are NOT required to have Uninsured/Underinsured Motorist (UM/UIM) coverage on their auto insurance policies. However, you should ALWAYS HAVE UNINSURED MOTORIST COVERAGE. UM/UIM coverage provides compensation for accident-related expenses from your own insurance company if you are involved in a crash with an uninsured or underinsured driver.
If an at-fault driver has auto insurance, but the amount of his/her insurance coverage is not enough to cover your damages, you can receive Underinsured Motorist benefits from your own insurance company. For example, if the at-fault driver has a limit of $25,000 on his or her policy and your damages total $50,000, your insurance company would be responsible for providing the additional $25,000 in compensation through your UM/UIM coverage. For more information, please read our detailed and thorough explanation of Uninsured Motorist coverage and how the coverage applies in situations. Click here to learn more about Uninsured Motorist Coverage.
Moore Law Firm can help with your insurance claims. Insurance adjusters strive to settle for the least amount possible, so hire an experienced attorney to protect your rights. If you have been injured in an automobile accident in Mobile, Alabama, call us 24/7 at 251-445-7602 for a free consultation.