Alabama Could Hike Minimum Auto Liability Limits This Week

Eight years after making auto liability insurance mandatory, the Alabama Legislature could decide this week to increase the amount of insurance that motorists must buy.

The proposal — $25,000 in insurance coverage for a single injury or death, $50,000 for multiple injuries or deaths, and $25,000 for property damage — is a compromise between plaintiff lawyers, who wanted motorists to carry twice that much, and insurance companies, which said raising the limits too high would increase the number of drivers who risk driving without coverage.

The bill’s sponsor, Sen. Roger Bedford, D-Russellville, said the old limits — $20,000 for one injury or death, $40,000 for multiple injuries or deaths, and $10,000 for property damage — were set in 1984 and were long outdated.

“You can’t get a new car for $10,000,” Bedford said.

Those 1984 limits were in a law that set minimum coverage for Alabama motorists who chose to buy insurance, but purchasing insurance wasn’t mandatory.

In 1999, the Legislature made liability insurance mandatory, but didn’t change the minimum coverage requirement.

Now, only 10 states have limits lower than Alabama.

The compromise legislation is essentially the national norm, with the $25,000 and $50,000 limits for physical injury used in 25 states and the District of Columbia, said Niko Corley, spokesman for the Alabama Association for Justice, formerly known as the Alabama Trial Lawyers Association.

Bedford and the trial lawyers pushed legislation for several years to raise the minimum coverage, and Alabama-based Alfa Insurance and other insurance companies fought it. Bedford’s original bill would have tied Alabama with Maine for the highest limits in the country.

Afla President Jerry Newby said his organization decided not to oppose Bedford’s bill after he agreed to a more modest increase in the minimum requirements.

Alfa spokesman Dave Rickey said 6.5 percent of the company’s customers have insurance coverage below what Bedford’s bill proposes, and depending on their circumstances, they would see an increase of $10 to $16 for six months of coverage.

Once insurance companies and trial lawyers reached the compromise on Bedford’s bill, it started moving through the Legislature quickly.

The Senate passed it 31-0 last Tuesday, and the House Judiciary Committee approved it on a voice vote without opposition on Thursday.

Now it goes to the House this Thursday, the final meeting day of the session. House Judiciary Committee Chairman Marcel Black, D-Tuscumbia, said the compromise has broad support and stands a good chance of passing, provided a disagreement on some other bill doesn’t shut down the House.

House Minority Leader Mike Hubbard, who sponsored the 1999 law making liability insurance mandatory, said he worries the higher limits will cause more people to ignore the mandatory insurance law, but he expects to vote for the legislation.

“It ought to be raised to protect innocent people who are hurt in accidents,” Hubbard, R-Auburn, said.

If the bill passes and is signed by the governor, it would take effect immediately. But Bedford said motorists wouldn’t have to buy the new limits until they renewed their current policies.