Alabama Governor Blocks Increased Car Insurance Liability Requirements

An article on Insurance Journal states that Governor Bob Riley has blocked legislation that would have required drivers in Alabama to carry higher liability limits. At issue was the wording of the bill, which would have made the new car insurance requirements mandatory from the moment the governor finished signing the bill!

Apparently, Riley will support the bill on a couple of key conditions --  a long enough implementation period for insurance companies to prepare new policies and for motorists to buy them. In fact, Riley supports the bill in theory, but needs to see that the market has time to respond.

The bill's sponsor, Sen. Roger Bedford, is disappointed with turn of events. Bedford believes that insurance companies could have sold new policies to drivers immediately when their old policies expired, without forcing drivers to change coverage before their yearly renewal. Bedford also said that any issues with implementation of the legislation could have been dealt with as an executive amendment or in the Legislature itself before the current session ended. 

At issue is that drivers in Alabama would have to pay for at least $25,000 in coverage for 1 injury or death, $50,000 for multiple injuries or deaths, and at least $25,000 for property damage.  This increases single injury or death coverage by $5,000, multiple injury or death coverage by $10,000 and property damage coverage by $15,000.

Is liability insurance really an issue in Alabama? Seems more like the respective legislators are simply looking for another way to get into the press. After all, the two largest companies in the Alabama market have indicated that most of their customers already meet or exceed the proposed limits.

That makes sense to me. If you want to have good liability coverage in today's litigious environment, I'd recommend at least $500,000 in coverage across these categories. These proposed limits are very low, and don't reflect the reality of the kind of damage that can result from an accident. In fact, in some cases you can be better off with umbrella liability policies that protect in a wider set of circumstances and can help to pick up where the available liability on your car insurance leaves off.

Monique L. Attinger 

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