Buying Automobile Insurance In Alabama
Most of the people who have automobile insurance don’t fully understand what they are purchasing and what the sections of their policies mean. These are the specific types of protection you purchase as part of your policy; some examples include liability coverage (required in Alabama), comprehensive coverage, and collision coverage. Here is a brief explanation of many of the sections on an Alabama auto insurance policy. The amounts shown are only examples. It is recommended that you purchase sufficient insurance to protect you and your family. Liability insurance policies must be issued by insurers licensed to do business in Alabama for no less than: • $25,000 for death or bodily injury to one person; • $50,000 for death or bodily injury to two or more persons; and • $25,000 for damage or destruction of property. Bodily Injury (BI) If you are liable in an auto accident this section covers you for any physical injuries sustained by another individual or other individuals involved in the occurrence. Bodily injury insurance helps toward your liability involving medical treatment and rehabilitation. Here’s what the numbers mean. Each Person $100,000 (Coverage Limit) Each Accident $300,000 (Coverage Limit) This means that you are covered for up to $100,000 per person involved in the accident and up to a total of $300,000 per accident. One person injured in the accident will never get more than $100,000. If two are injured, each will get, at the most, $100,000. If three are injured, again, each will receive, at the most $100,000. If four or more are injured, your insurance company will not pay more than $300,000. The insurance company will apportion damages to each party up to a total of $300,000 to the group. Of course, an injured party will only receive what their case is actually worth. With this policy, the insurance company will not pay more than $300,000 for bodily injury under any circumstances. If this full amount is paid out in the accident and the injured parties seek more than that amount, you could be liable for anything over $300,000. Any driver should have a minimum of $100,000-$300,000 if they can afford it. To feel better covered, we recommend an umbrella policy of $1,000,000, if your finances allow. Property Damage Liability Property Damage (PD) refers to the damage inflicted upon another person’s property when the policy holder is implicated in an auto accident. This does not cover damage to the policy holder’s property. Each Accident $100,000 In this case, the insurance company will pay no more than $100,000 toward reimbursement for property of another damaged as a result of the accident. Of, course, the amount paid depends on what the damage is worth. It is not unusual to have multi vehicle accidents in Alabama. If you are at fault in an accident, and numerous vehicles are involved, the Alabama minimum coverage of $25,000 most likely will not be sufficient to cover the property damage. It is not unusual for one vehicle in an accident to cost double the Alabama minimum. Medical Payments $5,000 This section of your automobile insurance offers an amount of medical coverage if you are injured in a car accident, no matter who is found at fault. Generally it also covers injuries sustained by your passengers – up to the amount purchased, in this case $5,000. Medical payments coverage often must be paid back if you recover from a liable party. Uninsured and Underinsured Motorists You will find a section of your automobile insurance policy entitled Uninsured – Underinsured Motorists. This coverage pays if you, your passengers or family members are hit by another driver who is found to be at fault for the accident and does not have insurance or is underinsured. Uninsured motorist is fairly cheap, and with 1/3 of all Alabama drivers uninsured, it is probably the most important coverage you can buy. If you don’t refuse it in writing, you automatically get minimum coverage in Alabama. Uninsured-Underinsured motorist does not provide coverage for property damage. Alabama law allows for stacking of up to three of your own vehicles if they are covered for uninsured-underinsured motorists on one policy. There is no limit to stacking if they are on different policies. The term stacking means “added together”. Uninsured-Underinsured Bodily Injury (BI) Each Person $100,000 (Coverage Limit) Each Accident $300,000 (Coverage Limit) Deductible In addition to your premium and the limits in your policy, there’s another amount to pay attention to: the deductible. The deductible is an amount of money you must pay out of pocket in the event of a claim, which is then deducted from the amount your insurance company pays for the covered loss. Additional Coverages Toward the bottom of your policy you may notice a section called Additional Coverages. Here are two items that may be listed here. Transportation Expense This covers reimbursement for a rental car. Per Day / Maximum $50 / $1,500 Towing and Labor Costs This item on the policy covers the reimbursement, up to the policy limit, for towing and labor costs associated with the vehicle becoming disabled. Each Disablement $150 These are some of the terms with which people are confronted when trying to understand and make decisions regarding automobile insurance. We hope this helps.