Uninsured & Underinsured Motorist Coverage in Alabama Explained

You can do everything right behind the wheel and still end up seriously injured by someone who has little—or no—car insurance.

That’s why the insurance coverage you choose for your own vehicle can be just as important as the coverage carried by the person who causes an accident.

At Nomberg Law Firm, we’ve seen firsthand what happens when Alabama drivers suffer life-changing injuries and there simply isn’t enough liability insurance available to cover their losses. Below, we’ll explain how uninsured and underinsured motorist coverage works, when it can help, and why we believe this coverage is so important for Alabama drivers.

If you’ve been seriously injured by an uninsured or underinsured driver, contact our Birmingham car accident attorneys for a free consultation to discuss your legal options.

What happens if an uninsured/underinsured driver hits me in Alabama?

If an uninsured driver causes your accident, there may be no liability insurance available from that driver to compensate you for your injuries. If the driver is underinsured, there is insurance—but not enough to cover the full extent of your damages.

The difference can be enormous when an accident causes a catastrophic injury or wrongful death.

Here’s a real-life example from one of our cases. One of our clients was hit by a drunk driver. That driver’s insurance carrier filed the available settlement proceeds with the court, asking for guidance on how the money should be distributed between our client and the two hospitals where he was treated after the accident.

Our client had no health insurance or the financial means to pay medical bills totaling more than $100,000. Unfortunately, he suffered permanent brain injuries, and the amount of liability insurance available wasn’t enough to satisfy even the outstanding medical bills—much less fully compensate him for everything he had lost.

That’s the danger of being seriously injured by an underinsured driver. The fact that the other driver has insurance doesn’t necessarily mean there’s enough money available to make you “whole.”

What are the requirements for car insurance in Alabama?

Alabama law requires drivers to carry minimum liability insurance of:

• $25,000 for bodily injury or death to 1 person
• $50,000 for bodily injury or death to 2 or more people
• $25,000 for property damage

These are commonly referred to as 25/50/25 limits.

Those limits may satisfy Alabama law, but they can be nowhere near enough after a serious accident. A $25,000 bodily injury limit, for example, can be exhausted quickly by an emergency room visit, hospitalization, surgery, rehabilitation, and other medical care.

Most folks think that being “fully covered” means they have automobile insurance for liability, collision, and maybe medical coverage. Most, however, are not informed about the importance of uninsured/underinsured motorist coverage until it’s too late.

What is underinsured/uninsured motorist coverage?

The case above is a reminder of why we encourage Alabama drivers to consider carrying uninsured/underinsured motorist coverage, commonly called UM/UIM coverage.

This coverage helps protect you when the driver who causes your accident doesn’t have enough insurance to cover your losses:

• Uninsured motorist (UM) coverage applies when the at-fault driver doesn’t have any liability insurance.
• Underinsured motorist (UIM) coverage applies when the at-fault driver has insurance but their policy limits aren’t enough to fully compensate you for your injuries and other losses.

For example, if you’re seriously injured by a driver who has Alabama’s minimum $25,000 bodily injury coverage but your medical bills are much greater, your own UIM coverage may provide an additional source of compensation.

Depending on the circumstances and your policy, UM/UIM coverage can help compensate you for medical expenses, lost income, pain and suffering, and other losses resulting from the accident.

Who pays when you’re hit by an uninsured/underinsured driver in Alabama?

Who ultimately pays depends on what insurance coverage and other financial resources are available. Depending on the accident, your medical bills and other losses may be covered by several different sources:

• The at-fault driver’s insurance. If the driver has liability insurance, their insurer can pay for the injuries and property damage they caused, up to the applicable policy limits. As an example, if you’re hit by a driver carrying only Alabama’s minimum coverage and suffer a traumatic brain injury requiring surgery and your $40,000 vehicle is totaled, their insurance provides just $25,000 for your injuries and $25,000 for property damage. That could leave you with significant medical bills, plus a $15,000 gap on your vehicle alone.
• Your own UM/UIM insurance. If the other driver has no insurance or doesn’t have enough to fully compensate you, your uninsured/underinsured motorist coverage (if you have it) may provide an additional source of recovery. The amount available will depend on your policy, your damages, and the circumstances of the accident.
• Your health insurance. If you have health insurance, you can generally use it to pay accident-related medical bills while your injury claim is pending. However, your health insurer may have a right to seek reimbursement from money you later recover. Health insurance also won’t compensate you for losses such as lost income, pain and suffering, or other damages caused by the accident.
• The at-fault driver personally. Having no insurance—or too little insurance—doesn’t necessarily eliminate the driver’s legal responsibility. You may be able to file a lawsuit against the driver for damages their insurance doesn’t cover. The practical problem is that an uninsured driver may have limited income or assets, making it difficult to actually collect what you’re owed.
• You. Unfortunately, if there isn’t enough insurance available, the at-fault driver doesn’t have the financial resources to pay, and you don’t have other applicable coverage, you could ultimately be left with medical bills and other losses that aren’t fully compensated.

This is why UM/UIM coverage can be so important. Being legally entitled to compensation doesn’t guarantee there will be enough money available to pay it. Your own coverage can provide another potential source of recovery when the person who caused the accident can’t.

And don’t assume getting paid will be automatic simply because you’re making a UM/UIM claim against your own insurance company—especially if fault is disputed.

You’ll still need to establish that the other driver was legally responsible, prove the extent of your injuries and other losses, and negotiate over how much your claim is worth.

Do insurance companies go after uninsured drivers?

Sometimes. If your insurance company pays your claim because an uninsured driver caused the accident, it may seek reimbursement from the at-fault driver through a process known as subrogation. However, there’s no guarantee the insurer will be able to recover the money. 

If someone couldn’t afford to carry car insurance in the first place, they likely don’t have the financial resources to repay an insurance company for a serious accident.

The important thing for you to know is that your UM claim generally doesn’t depend on whether your insurance company can successfully collect from the uninsured driver afterward. Your insurer’s efforts to recover its money are separate from your right to pursue benefits available under your policy.

What is the best protection against uninsured/underinsured drivers?

One of the best ways to protect yourself financially is to carry enough UM/UIM coverage on your own automobile policy.

You need this coverage because if you get into an accident with someone who is driving without insurance or doesn’t have enough of it, you want to be made financially whole again. You have to protect yourself fiscally and physically, and uninsured/underinsured motorist protection can help you in that regard.

In another case we handled, a phantom driver ran our client off the road, causing our client to crash his car into a brick wall. The collision caused permanent spinal cord injuries, requiring a cervical fusion to repair a herniated disc in his neck. His medical bills exceeded $100,000.

Because our client was insured by two different uninsured/underinsured policies at the time of the accident, both insurance companies agreed to pay policy limits, resulting in a $125,000 recovery for our client.

Without uninsured/underinsured coverage, our client would have had no insurance recovery to pay medical bills or compensate him for his permanent injuries. This case reflects the importance of obtaining as much uninsured/underinsured coverage as you reasonably can.

The point is this—there are uninsured and underinsured drivers on Alabama roads. Don’t 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.

Does Alabama require uninsured/underinsured motorist coverage?

Alabama law takes an interesting approach to UM/UIM coverage.

Under Alabama Code § 32-7-23, automobile liability policies issued in the state generally must include uninsured motorist coverage at the statutory bodily injury limits unless the named insured rejects the coverage. The statute also expressly includes underinsured vehicles within its definition of an uninsured motor vehicle.

In other words, Alabama requires insurers to offer this protection, but it doesn’t force you to keep it.

If you’ve previously rejected UM coverage, don’t assume it’s now part of your policy simply because you’ve renewed your insurance. Alabama law says an insurer generally doesn’t have to provide the coverage on a renewal policy unless you request it in writing after previously rejecting it with that insurer.

Why would someone reject uninsured motorist coverage?

Usually, the reason is simple: to lower the insurance premium. Someone shopping for the cheapest possible automobile insurance may focus on meeting Alabama’s minimum legal requirements and reject optional coverage to reduce the bill.

But this is one place where saving money today can potentially cost you much more after a serious accident.

Liability insurance primarily protects you financially when you’re legally responsible for harming someone else. UM/UIM coverage, on the other hand, can help protect you and other insured persons when someone who doesn’t have enough insurance causes the injuries.

Before rejecting it simply to reduce your premium, ask your insurance agent what the coverage would cost and exactly how much protection you’re giving up.

Were you hit by an uninsured or underinsured driver in Alabama? We can help.

Even if you have UM/UIM coverage, determining how much coverage is available after an accident with an uninsured or underinsured driver can be complicated.

At Nomberg Law Firm, we’ve spent more than 50 years representing injured Alabamians. Our Birmingham car accident lawyers have successfully handled cases involving uninsured drivers, underinsured drivers, phantom vehicles, catastrophic injuries, wrongful death, and multiple insurance policies, so we know where to look for potential sources of recovery.

If you or a loved one has been seriously injured by an uninsured or underinsured driver in Alabama, contact Nomberg Law Firm today for a free consultation. 

We’ll investigate the available insurance coverage, explain your rights, and fight to recover the full compensation available to you.