Even the most careful drivers sometimes find themselves involved in fender benders. While all accidents – even minor ones – cause emotional and financial stress – getting hit by an uninsured or underinsured driver can create even more problems. Insurance is key to protecting yourself from uninsured drivers and underinsured drivers.
Uninsured Drivers and Underinsured Drivers in Alabama
Under Alabama law, all drivers must have auto insurance. Currently, the minimum coverage requirements under the law are $25,000 for property damage, $25,000 for bodily injury per person, and $50,000 for bodily injury per accident.
An uninsured driver, just as the term says, is someone who drives a car without any form of insurance. Sadly, Alabama’s percentage of uninsured drivers is one of the highest in the nation. In 2015, insurance industry studies found that 18.4% of Alabamans drove without car insurance. This percentage makes Alabama one of the nation’s top ten states for uninsured drivers.
An underinsured driver has an insurance policy. However, this person’s policy usually provides the minimum coverage required by law and nothing more.
Why Should I Worry About Uninsured Drivers?
Uninsured drivers and underinsured drivers can cause major headaches for those they injure. To understand why, let’s look at what happens in a normal situation where both drivers are insured.
Let’s imagine that Insured Ida hits Victor. The crash, which was Ida’s fault, causes Victor to suffer serious injuries and miss time off work. Victor’s medical bills total $40,000, but Ida’s insurance limit is $50,000. Because Ida has insurance, her insurance company will likely chip in to pay Victor’s medical bills.
But this scenario will change if the other driver doesn’t have insurance. Now, let’s assume that No-Insurance Ned hits Victor. Victor cannot file a claim with an insurance company because Ned is uninsured. So, Victor will likely have to pay for his medical bills on his own.
There can also be problems if the at-fault driver’s policy provides too little coverage. Going back to Ida and Victor, if Ida’s policy only covers $25,000 worth of damages, Victor will be responsible for the remaining $15,000. Again, he will likely have to pay this amount on his own.
Clearly, uninsured drivers can make an already stressful situation even worse. Luckily, uninsured motorist coverage provides another option.
How Uninsured Motorist Coverage Works
Uninsured motorist insurance provides another layer of protection for drivers who are hit by uninsured drivers. Drivers can add uninsured motorist (UM) or underinsured motorist (UIM) coverage to their existing policies. This coverage will help when the other driver’s policy is inadequate or nonexistent.
Here’s how UM/UIM policies work: Victor is hit by No-Insurance Ned and suffers $40,000 worth of damages. Ned has no insurance, but Victor can file a claim with his own insurance company against his own UM coverage. The insurance company will use Victor’s coverage to pay for his injuries.
Similarly, if Victor was hit by Ida, but Ida’s policy would only cover $25,000, Victor would first file a claim against Ida’s insurance. Then, he would call his company and request to use his UIM coverage to make up the difference.
UM/UIM coverage can be a huge help after an accident. UM/UIM policies can help with medical bills, lost wages, pain and suffering, and even funeral expenses.
Why Drivers Need UM/UIM Coverage
While the benefits of UM/UIM insurance should be clear, not all drivers take advantage of this coverage.
Alabama’s insurance law presents an interesting contradiction. Technically, Alabama law requires that all insurance policies in the state include uninsured motorist coverage. However, Alabama law also requires that insurance companies offer all drivers the opportunity to refuse, or “opt-out” of this coverage. So, Alabama drivers do not have to add UM/UIM coverage, but they would be wise to do so.
Some drivers may think that UM/UIM coverage is not necessary due to disability insurance or health insurance. However, unlike uninsured motorist coverage, disability insurance will not compensate for pain and suffering. Similarly, health insurance covers medical bills, but does not cover lost wages like uninsured motorist coverage. Clearly, most Alabama drivers can benefit from the assistance provided by UM/UIM coverage.
Drivers may also refuse UM/UIM policies because they think they will be too expensive. This may not be the case. Because insurance prices vary so widely based on the company, the driver, the car, and many factors, it’s difficult to say exactly how much any one policy will cost. But a national survey found that UM/UIM coverage generally costs five percent of the main policy. So, if you pay $100 per month in car insurance, UM/UIM coverage should only cost an additional $5 per month.
How Much Uninsured Motorist Coverage Do Alabama Drivers Need?
The amount of coverage you need will depend on several factors. Most experts say that the amount of coverage should at a minimum track the main policy. So, for example, a driver with 500,000 of personal injury coverage on the main policy should choose a UM/UIM policy in that same amount. However, you could always add additional coverage. Your insurance agent can help you choose the right amount of coverage.
Hopefully, this article has clarified Alabama’s rules about uninsured and underinsured motorists. However, if you have more questions or if you or a loved one has been in a car accident, please contact Collins Law LLC. If you’ve been injured, our firm will fight for you.
