Orlando Harmon
Alabama has a high rate of uninsured motorists, so it's important to understand the ins and outs of auto insurance in the state. The Alabama Mandatory Liability Insurance Act (MLI) requires that drivers have liability insurance, which covers the costs you owe to another party in the event of an accident. The minimum coverage requirements in Alabama are $25,000 per person and $50,000 per accident for bodily injury liability, and $25,000 per person for property damage liability. Uninsured/underinsured motorist bodily injury coverage is also required, but can be rejected in writing.
| Characteristics | Values |
|---|---|
| Minimum insurance requirements | $25,000/$50,000/$25,000 |
| Bodily injury liability per person | $25,000 |
| Bodily injury liability per accident | $50,000 |
| Property damage liability per accident | $25,000 |
| Uninsured/underinsured motorist bodily injury per person | $25,000 |
| Uninsured/underinsured motorist bodily injury per accident | $50,000 |
| Collision coverage | Subject to deductible |
| Comprehensive coverage | Subject to deductible |
What You'll Learn
Bodily injury liability
Alabama's Mandatory Liability Insurance (MLI) Law requires all drivers to have a minimum of $25,000 in bodily injury liability coverage per person and $50,000 per accident. This type of insurance covers the injuries and lost wages of other drivers or passengers in accidents that you cause. It is important to note that this coverage does not extend to your own injuries or those of your passengers.
While the minimum coverage in Alabama is $25,000 per person and $50,000 per accident, it is important to consider purchasing higher coverage limits. If the injuries caused in an accident exceed your policy limits, you will be responsible for paying the remaining costs out of pocket. By increasing your coverage limits, you can reduce your financial risk in the event of a serious accident.
In addition to bodily injury liability, Alabama law also requires property damage liability coverage. This type of insurance pays for damages to the other driver's vehicle or other property, such as municipal buildings. The minimum coverage required in Alabama is $25,000 per accident for property damage liability.
It is important to remember that Alabama is not a no-fault state. This means that the driver who is found to be at fault in an accident is responsible for paying for the other driver's damages. If you are found to be at fault and do not have sufficient insurance coverage, you may face significant financial burdens. As such, it is advisable to consider additional coverage options, such as comprehensive and collision insurance, to ensure you have adequate protection.
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Property damage liability
In Alabama, property damage liability coverage is a legal requirement for motorists. This type of insurance covers the cost of damages to another person's property in the event of an accident. The minimum coverage required is $25,000 per accident, and this applies to damage to another driver's car or any collateral damage to someone's property, including municipal buildings. This type of insurance does not cover the cost of repairs to your own vehicle.
The purpose of property damage liability coverage is to provide financial protection for the policyholder in the event of an accident resulting in property damage. This coverage can help protect you from legal and financial consequences, including lawsuits, that may arise from causing damage to another person's property. By having this type of insurance, you can have peace of mind knowing that your insurer will cover the costs of repairs or compensation for the other party's damaged property.
In addition to property damage liability coverage, Alabama law also requires motorists to carry bodily injury liability coverage. This type of insurance covers the costs of bodily harm sustained by other parties in an accident. The minimum coverage required is $25,000 per person and a total of $50,000 per accident if multiple people are injured. Together, property damage and bodily injury liability coverage are essential components of a comprehensive auto insurance policy in Alabama.
It is important to note that liability insurance, including property damage and bodily injury coverage, only covers the costs you owe to the other party in an accident. It does not cover your own medical expenses or vehicle repairs. Therefore, it is advisable to consider additional types of insurance coverage, such as collision coverage and comprehensive coverage, to protect yourself fully. By understanding the basics of property damage liability coverage and exploring optional coverages, Alabama motorists can make informed decisions about their auto insurance policies and ensure they have adequate protection in the event of an accident.
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Uninsured/underinsured motorist bodily injury
Protection Against Uninsured and Underinsured Drivers
Uninsured motorist coverage protects you in the event of an accident caused by a driver with no liability insurance or a hit-and-run driver. Underinsured motorist coverage, on the other hand, kicks in when the at-fault driver's insurance is insufficient to cover your medical expenses and other damages. In Alabama, it is mandatory for insurance providers to include UM/UIM coverage in their policies unless they obtain a written waiver from the policyholder.
Benefits and Coverage
UM/UIMBI coverage in Alabama can provide valuable financial protection. It can cover reasonable and necessary medical expenses, including hospital stays, treatments, and rehabilitation, as well as funeral expenses in the unfortunate event of a fatality. Additionally, it can compensate for lost wages if you are unable to work due to your injuries. The coverage limits for UM/UIMBI in Alabama typically start at $25,000 per person and $50,000 per accident, but it's recommended to purchase higher coverage limits if you can afford it.
Stacking Coverage
Alabama allows a process known as "stacking" of UM/UIM coverage if you have multiple vehicles insured under a single policy. This means that you can combine the coverage limits for each vehicle, providing a higher total coverage amount. For example, if you have two vehicles with $25,000 per person and $50,000 per accident coverage, stacking would give you a combined coverage of $50,000 per person and $100,000 per accident.
Claim Process
In the event of an accident with an uninsured or underinsured motorist, you would first file a claim with your own insurance company under your UM/UIMBI coverage. If your damages exceed the coverage limits of the at-fault driver's policy, your insurance company would step in to cover the difference, up to your own policy limits. It's important to review your policy regularly and understand the claims process to ensure you receive the full benefits you're entitled to.
In summary, UM/UIMBI coverage is a crucial component of auto insurance in Alabama. It provides financial protection and peace of mind in the event of an accident with an uninsured or underinsured driver, helping to cover medical expenses, lost wages, and funeral costs. By understanding the benefits and limitations of this coverage, you can make informed decisions about your insurance choices and ensure you have adequate protection on the road.
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Collision coverage
The cost of collision coverage depends on the value of your vehicle and the deductible you choose. The deductible is the amount you have to pay out of pocket before the insurance company covers the rest. For example, if you have a $1000 deductible and the repairs to your vehicle cost $5000, you will pay $1000 and the insurance company will pay the remaining $4000. When choosing a deductible, consider your financial situation and whether you could afford to pay for repairs or a replacement vehicle out of pocket.
When deciding whether to add collision coverage to your policy, consider the value of your vehicle. If your vehicle is brand new or still worth a considerable amount, collision coverage can help you pay for expensive repairs or a replacement if it's damaged. On the other hand, if you have an older vehicle with a low market value, the cost of collision coverage may outweigh the benefits.
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Medical payments coverage
MedPay is distinct from Bodily Injury (BI) coverage, which is mandated by Alabama's Mandatory Liability Insurance (MLI) Law. BI coverage only covers the injuries of the other party in an accident, not the policyholder or their passengers. MedPay can, therefore, be a crucial addition to a policy to ensure the driver and their passengers are covered in the event of an accident.
In Alabama, it is also possible to purchase Uninsured/Underinsured Motorist Bodily Injury (UM/UIMBI) coverage. This covers the medical bills of the policyholder and their passengers if they are injured by an uninsured or underinsured driver. This coverage is also optional but can provide additional peace of mind.
While MedPay is a recommended addition to an auto insurance policy, it is important to note that it does not cover lost wages or property damage. Collision coverage is a separate type of insurance that covers the cost of repairing or replacing a damaged vehicle after an accident, even if the policyholder was at fault.
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Frequently asked questions
The minimum amount of Alabama auto insurance coverage is $25,000 per person/$50,000 per accident/$25,000. This includes bodily injury liability coverage of $25,000 per person and $50,000 per accident, as well as property damage liability coverage of $25,000 per person.
Basic auto insurance in Alabama covers bodily injury and property damage liability. Bodily injury liability covers expenses associated with bodily harm sustained by other parties, while property damage liability covers damage to another person's property.
Yes, auto insurance is mandatory in Alabama. The Alabama Mandatory Liability Insurance (MLI) Law mandates that every Alabama motorist carries liability auto insurance to legally drive and register a car in the state.
