What Is Uninsured Motorist Coverage and Should I Get It?
Ferguson & Ferguson
Attorneys at Law
December 14th, 2020
Do you have uninsured/underinsured coverage? Do you know what it covers? I have found that most of my clients don’t know if they have it or not. Uninsured and underinsured motorist coverage isn’t required in Alabama, but you automatically get the coverage unless sign it away. Of all the auto insurance coverages you can buy, arguably it is the most important to protect you. However, many people do not even know that they have the coverage, or what it covers. Further, even if they bought it, they do not know its provisions only apply to physical injuries for the driver and the passengers in the vehicle, not for property damage.
Collision coverage covers your vehicle in the event you’re in an accident with a driver who has no insurance or is underinsured. Medical payment coverage covers the driver and passengers medical bills up to some certain amount. Usually $1,000.00-$5,000.00, although it can go much higher. Rarely do you need higher medical payment coverage especially if you have good health insurance.
What Will Uninsured/Underinsured Motorist Coverage Pay for in a Alabama Auto Accident?
There are tens of thousands of Alabama drivers on the roads driving with no insurance or minimum policy coverage. The coverage is cheap and could make the difference between you being full compensate for your injuries, and going bankrupt. Uninsured motorist, means no insurance, and underinsured, means not enough coverage. When you buy one, you automatically have both coverages. When you have been seriously injured, many drivers do not have enough coverage to fully compensate you for your injuries. Uninsured and underinsured motorist covers:
- Medical and rehabilitation costs
- Any wages you lose due to being unable to work
- Loss of future enjoyment of life
- Long-term care and any medical devices needed
- Pain and suffering
- Loss of consortium
Essentially, uninsured motorist coverage gives you the ability to get money for your injuries if the other driver has no insurance or not enough. If you have liability insurance coverage in Alabama, you will be given uninsured motorists coverage as well unless you intentionally opt out. If you don’t want to add uninsured motorist coverage you actually have to make a written rejection of the coverage.
In Alabama you can stack your coverages for different motor vehicles you own, but you must have the coverage on that vehicle. In Alabama you can stack your coverages up to three vehicles on the same policy. There is no limit on different policies. For example, if you have $20,000 per person and $50,000 per accident of uninsured auto insurance for three vehicles in your household then you’d essentially have access to $60,000 per person and $120,000 per accident of coverage, not including what the liable party has in coverage. Remember, if you are at fault in the accident, the coverage is not available to you, even though it might still be available on the passenger in your car. Your passenger can also go after their own underinsured coverage if they have it. The passenger can recover from the other driver, then the vehicle they were in, and then their own coverages.
The lower your coverage for uninsured motorist, the greater risk of your family being left with bills after your case is over. If you go to the hospital in an ambulance, get treatment in the emergency room and spend a night or two in the hospital, you probably will need uninsured/underinsured motorist coverage to be made whole.
Uninsured/Underinsured Motorist FAQ
Do I need uninsured motorist coverage?
UM is a coverage option that provides the protection you need when the other driver can’t cover your medical expenses and personal injury damages. Whether they have no insurance or not enough, your insurance company step in to cover your personal injury damages. Uninsured motorist injury coverage provides coverage for any injuries to you and all passengers in your vehicle, as well as coverage for someone who was driving your insured vehicle with your permission. Whether it’s required or not, having underinsured motorist coverage can be a smart financial move.
How much does uninsured motorist insurance coverage cost?
Uninsured motorist is actually very cheap compared to all other coverages. It increases your insurance premiums by about five percent on average.
How does uninsured bodily injury insurance works
If you incur bodily injuries in a car accident with an underinsured or uninsured driver, you could end up with thousands of dollars in medical bills and unable to work for weeks or months. Uninsured motorist bodily injury coverage (UMBI coverage) will pay your bills without a deductible. Although you must recover the insurance available from the other driver prior to getting uninsured motorist, and get permission to settle before you sign a release with the liable driver.
What are the uninsured motorist coverage limits in Alabama
The minimum coverage in Alabama is $25,000.00. Normally you can get coverage up to your liability or comprehensive limits.
Is uninsured motorist coverage required in Alabama?
No, the Alabama Department of Motor Vehicles does not make it mandatory to purchase uninsured motorist insurance. Although, all insurance companies must offer you uninsured/underinsured insurance at the time you purchase your policy in Alabama.
What is stacking?
Stacking occurs where the injured driver has more than one vehicle having UIM coverage on one policy, or vehicles on different policies. You first claim UIM coverage under the contract covering the vehicle you are driving, then up to two more vehicles if on one policy. There is no limit on different policies. With the understanding you can only recover what your case is worth. You can also recover on other vehicles that are garaged in the same household if on different policies. Pursuant to Alabama Code § 32-7-23(c), an insured may stack up to two additional coverages which means in the case of multi-vehicle policies, the insured can recover up to three times the policy limit.
What can I recover if I am an injured passenger?
UIM rules are the same for passengers. The passenger can recover against the vehicle they are in plus any policies they are covered by of their own. They cannot recover against the drivers other policies. Passengers insured under multi-vehicle policies can stack up to two additional coverages or three times the policy limit.
How much time do I have to make a claim for UIM benefits?
There is a six-year contract statute of limitations for uninsured motorist insurance claims. Further, the failure of the insured to make a claim within the statute of limitations against the other driver does not bar an uninsured motorist claim.
How much UIM coverage should I have in Alabama?
I recommend my clients have at least $50,000.00 per person, $100,000.00 per accident for each motor vehicle they own. An emergency room bill can easily exceed $50,000.00 in Alabama, and a surgery and hospital stay over $100,000.00.
How do I Make an Uninsured Settlement in Alabama
The procedure set forth by the Supreme Court of Alabama provides as follows:
- The injured driver must give notice to his/her automobile liability insurance carrier that he intends to make a claim for UIM benefits as soon as it appears that the insured’s damages may exceed the tortfeasor’s limits of liability coverage.
- If the tortfeasor’s liability insurance carrier and the injured driver negotiate a proposed compromise or settlement of the injured driver’s claim against the tortfeasor, and if the settlement would release the at-fault driver from all liability, then the injured driver, before agreeing to the settlement, must immediately notify the underinsured motorist carrier of the proposed settlement and the terms of any proposed release.
- At the time the insured/injured driver informs his or her underinsured motorist carrier of his or her intent to settle the claim, the insured must also inform the carrier as to whether the insured will seek UIM benefits in addition to the proceeds of the proposed settlement, and must do so in sufficient detail so that the UIM carrier can determine whether it will refuse to consent to the settlement, will waive its rights of subrogation against the at-fault driver, or will deny any obligation to pay UIM benefits. It is this point of the process which is beyond the scope of this article and which requires assistance of legal counsel.
- Suffice it to say, the injured driver should not settle with the at-fault driver or his/her insurance carrier without first allowing the UIM carrier a reasonable time within which to investigate the insured’s claim and to notify its insured of its proposed action.
- Certain actions or failure to act by the UIM carrier may result in a waiver of its right to subrogate against the at-fault driver or the liability carrier itself. Again, whether your UIM carrier has “waived” any rights is a legal question for your attorney.
- If the UIM carrier wants to protect its subrogation rights against the at-fault driver, it must, within a reasonable time, and in any event before the at-fault driver is released by the UIM carrier’s insured, advance to its insured an amount equal to the at-fault driver’s settlement offer.
If you have questions, we can help. Call 256-534-3435 in Huntsville and Decatur, Alabama. We handle injury cases state wide.