Tom McCutheon
Alabama Law requires that every person operating a motor vehicle or allowing someone else to operate their motor vehicle CARRY liability insurance. The amount of insurance required is a minimum amount of $25,000 per person and $50,000 per accident.
This law became mandatory on May 15, 2000 and further requires that proof of insurance must be carried within the vehicle. All insurance policies in Alabama must have the names of the parties to the contract, the risks insured against, the time when the insurance takes effect and the period during which it will continue as well as the amount of the premium.
If the application for insurance is taken within the State of Alabama then the law of Alabama governs the contract of insurance. This can make a big difference for certain types of coverages. For example, in Alabama if someone causes an accident and all they have is a minimum limits policy of $25,000 and the person injured has a $25,000 uninsured/underinsured motorist policy that was purchased in Alabama there is $50,000 in coverage. If this is a Tennessee or Mississippi policy, there is only $25,000 in coverage as those states offset uninsured/underinsured motorist coverage and do not stack uninsured motorist coverage on top of the wrongdoer’s liability coverage.
We see plenty of cases where hospital bills exceed $100,000 and a minimum limits policy doesn’t go far when it comes to a serious injury. Also, remember that uninsured motorist benefits aren’t subject to the claims of a worker’s compensation carrier if you are injured in a motor vehicle accident while on the job.
Liability coverage is typically provided for a non-owned vehicle only if it is not available for the regular and frequent use of the insured and if its use is with the permission of the owner. Most liability insurance policies provide coverage for a newly acquired automobile if the newly acquired automobile replaces an insured automobile or if all automobiles the insured owns are insured with the same insurance company. In these instances you must promptly notify the insurance carrier and pay any additional premium within a specified period of time.
Cancellation of insurance policies is governed by law and must be mailed or delivered at least 20 days prior to effective date of cancellation. If the cancellation is for non-payment of premium, however, ten days is sufficient.
Buckle up and drive safely.
McCutcheon & Hamner, P.C.
2210 Helton Drive
Florence, Alabama 35630
Telephone: 256-764-0112
Facsimile: 256-764-1124
