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Why Underinsured/Uninsured Motorist Coverage Is Important to You

The insurance law journal has written an article outlining the recent changes to Alabama’s manadatory automobile insurance law.  The Alabama Legislature passed a law that requires everyone who drives a car in Alabama to have a minimum of $25,000 per person and $50,000 total insurance for personal injuries caused by negligent driving.  The law also requires that people maintain $10,000 in property damage coverage.  As one Senator pointed out, however, even that amount is not enough. “You certainly can’t buy a new car for $10,000 today,” said Senator Roger Bedord of Russellville.

Further, many car wrecks can result in medical bills, lost wages, and personal injuries that easily exceed $25,000 or even $50,000.  What then?  Well, if you happen to be one of the lucky drivers who purchased uninsured motorist coverage, you might be able to recover the excess damages from your own insurance company through your underinsured or uninsured motorist coverage.

Uninsured or underinsured motorist coverage is optional in Alabama, even though a lot of people think it is mandatory.  It kicks in when the driver at fault in the accident has no insurance or not enough insurance to cover your losses.

As Allstate Insurance Company has pointed out in its q & a section on its website, how much underinsured motorist coverage you need is based on how much risk you are willing to take that other drivers in Alabama willl have the coverage you need to compensate you for your damages.  Allstate points out, though that

The good news is, it’s relatively inexpensive compared to some of the other coverages on the policy. Even though you’re getting hundreds of thousands of dollars in coverage, you’ll probably be paying tens of dollars every six months for this powerful protection.

So, for just “tens of dollars” per year, you can get hundreds of thousands of dollars of underinsured motorist coverage.

I can tell you many, many stories about clients who have come to see us with horrible injuries from a car wreck, only to discover that the party at fault has no insurance or doesn’t have enough insurance and assets to pay for the damages suffered.  It’s even worse when I have to tell the client that he or she waived the optional underinsured motorist coverage available in Alabama or that he or she selected the minimum limits of $25,000 in underinsured motorist coverage.

As I did just recently however, with a client from Mobile, Alabama, I sometimes get to deliver good news.  This client had medical bills (not including lost wages, physical injuries, and other damages) over $100,000.  The driver of the other vehicle that ran the stop sign had only $100,000 in coverage.  Thankfully, my client had purchased underinsured motorist coverage of $250,000 to cover losses just like this one, and we were able to recover both amounts to compensate him for his loss.  The additional $250,000 in coverage cost him just $30 per year.

The point is this – there are lots of uninsured or underinsured drivers in Alabama.  You don’t want to be the one left holding the bag if you get injured by one.  Underinsured/uninsured motorist coverage is a necessary, and fairly inexpensive way, to make sure you and your family are protected from a loss.

Edwin Lamberth

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