Underinsured / Uninsured Motorist Coverage in Alabama
Have You Been Involved in an Accident with an Uninsured Driver?
Imagine you are driving to the grocery store to buy a few things for dinner. You have a green light at the intersection ahead of you, but as you are driving through the intersection, another car runs the red light and crashes into the driver’s side of your vehicle. As a result of the crash, your vehicle is badly damaged and you sustained multiple injuries requiring medical treatment. Generally speaking, the insurance company covering the driver who ran the red light should be responsible for paying for your damages. Alabama law requires every vehicle being operated on public highways to be covered by a liability insurance policy (Ala. Code §32-7A-4), which means the insurance company covering the driver who hit you, should be responsible for paying for the damages you incurred due to the accident, whether it be property damage or bodily injury.
A few days after the wreck, however, you learn the driver who hit you did not have car insurance as required by Alabama law. So, what can be done to ensure that you are adequately compensated for your injuries you sustained due to no fault of your own? The uninsured/underinsured motorist (UM/UIM) coverage under your own car insurance policy can provide you with that compensation. As such, the purpose of this article is to explain not only the importance of making sure that your automobile insurance policy contains UM/UIM coverage, but also to provide a practical understanding of how UM/UIM coverage works in the event of a car accident.
Uninsured Motorist Liability in Alabama
Under Alabama law, no liability insurance policy may be issued unless that policy contains UM/UIM coverage. (Ala. Code §32-7-23). So, what is UM/UIM coverage? Essentially, if you are involved in a car accident like the one described above, your own UM/UIM coverage means there is money available to you, under your own car insurance policy, for damages you incurred as a result of the accident if the at-fault driver does not have car insurance or is, “uninsured.” For example, if the at-fault driver who hit you is uninsured, and your car insurance policy provides for $25,000 in UM/UIM coverage (the statutory minimum in Alabama), there is up to $25,000 available to you under your own policy to compensate you for the damages you incurred as a result of the accident.
Additionally, because this type of insurance coverage is called uninsured/underinsured motorist coverage, there is another way in which a UM/UIM policy can provide compensation for you in the event of a car accident. If the at-fault driver in an accident has car insurance, but the amount of the at-fault driver’s insurance coverage is not enough to cover your damages, you may obtain UM/UIM benefits from your own insurance company. Take the example described above where you were hit while driving through an intersection, only this time the at-fault driver had the statutory minimum of $25,000 in insurance coverage. it was a relief for you to learn that the driver who hit you was insured, however, the medical bills you incurred to treat your injuries totaled over $50,000, making the at-fault driver “underinsured.” In this situation, if you have UM/UIM coverage, the at-fault driver’s insurance company would be responsible for paying their limits of $25,000, and your insurance company would then be responsible for providing additional compensation to you through your own UM/UIM coverage.
As such, there are two ways in which UM/UIM coverage can provide you with a safety net in the event you are involved in a car accident. First, if the at-fault driver does not have car insurance, i.e. they are “uninsured,” your UM/UIM coverage can provide you with compensation. And second, if the at-fault driver does not have enough insurance coverage to fully compensate you for your injuries, i.e. they are “underinsured,” your own UM/UIM coverage can kick in to provide you with additional compensation. Therefore, having UM/UIM coverage is extremely important in the event of a car accident because there is no way of knowing if the at-fault driver will be adequately insured, if insured at all, and if there is no insurance coverage, it is highly unlikely that there will be another source of money from which you can be compensated for your injuries.
Filing a Successful Car Accident Claim After an Uninsured Motorist Accident
Now that you have an understanding of what UM/UIM coverage is and the ways in which such coverage can benefit you in the event of a car accident, here are a few practical matters you should be aware of in order to ensure your UM/UIM claim can be processed successfully. In order for your UM/UIM carrier to honor your claim, you must give them reasonable notice that you were involved in an accident, and as a result of that accident, you may be making a claim for UM/UIM benefits if it appears that your damages may exceed the at-fault driver’s policy limits. Also, if you and the at-fault driver’s insurance company reach a settlement agreement that would release the at-fault driver from liability, you must first notify your UM/UIM carrier of the proposed settlement and ask that they consent to the settlement. A failure to follow either of these steps may result in the loss of your right to recover UM/UIM benefits.
Another issue you should be aware of when making a claim for UM/UIM benefits is whether or not you effectively waived those benefits when you purchased your insurance policy. Unfortunately, although Alabama law requires insurance companies to offer UM/UIM coverage as explained above, the law also allows you to reject UM/UIM coverage if you so choose. If you reject those benefits, you would not be entitled to recover any money from your own insurance company if you are involved in a car accident with an uninsured or underinsured driver. Therefore, in an attempt to keep from paying UM/UIM benefits to you in either of the situations described above, insurance companies will sometimes claim that you rejected UM/UIM coverage when you purchased your insurance policy. as such, it is very important that you understand what is required in order for you to have actually rejected UM/UIM benefits.
In order for rejection of UM/UIM coverage to be effective, the rejection must be made by all named insureds, and it must be in writing. For example, if a man and his wife are both named insureds on an insurance contract, and only the husband signs the rejection of UM/UIM coverage, the wife has not effectively rejected such coverage because she did not sign the waiver, and is still entitled to those benefits. Oral rejections cannot effectively reject UM/UIM coverage; however, as explained in the examples above, it is never a good idea to reject such coverage, as you never know when you will be involved in a car accident with an uninsured or underinsured driver.
Another aspect of UM/UIM coverage you should be aware of is that your monthly policy premiums are usually not affected if you pursue or receive UM/UIM benefits after a car accident. A question I often get from my clients when I explain that they can be compensated by their own insurance company through their UM/UIM coverage is “Will this make my premiums go up?” And the answer to that question is “No.” IF you are involved in a car accident that is not your fault, your monthly premiums will normally not go up if you receive compensation from your UM/UIM coverage.
A frequent question that our Birmingham personal injury lawyers hear is “how much UM coverage do I need?” Our answer is as much as you afford. Increasing UM limits is surprisingly cheap. Once you consider how many Alabamians drive without insurance, combined with the number of auto accidents occurring everyday, the odds are that most people will need UM insurance at some point in their lives.
How An Experienced Car Accident Lawyer Can Help
Underinsured and uninsured motorist coverage is extremely beneficial to have in the event you are involved in a car wreck. This coverage can provide you with compensation that otherwise would not have been available if the at-fault driver does not have car insurance or their policy limits will not adequately compensate you for your injuries. There has been extensive litigation on UM/UIM issues in Alabama regarding how many vehicles are covered by the policy, whether certain individuals are covered by the policy, and whether the at-fault driver was actually “uninsured” or “underinsured” at the time of the accident, as well as multiple other issues. For that reason, if you are involved in a car accident, it is important to retain counsel who can effectively interpret your insurance policy, negotiate with the insurance companies, and adequately represent you if your case goes to trial. However, if you rejected UM/UIM coverage at the time you purchased your insurance policy, there is nothing that can be done to provide you with that coverage. Therefore, you should check your insurance policy or call your insurance representative to make sure your policy contains UM/UIM coverage.
I hope this article has given you a basic understanding of what UM/UIM coverage is, how it works, and why it is so important for you to have UM/UIM coverage on all of your vehicles. At a minimum, consult a Birmingham car accident attorney or uninsured / underinsured accident lawyer in Alabama if you have been in an accident and have questions about your right to claim UM benefits.