Alabama Moves Closer to Hiking Auto Insurance Requirements

The Alabama House has approved legislation that would bring Alabama in line with about half the South by raising the minimum amount of auto liability insurance that motorists must buy.

The House voted 82-0 for legislation by Rep. Marc Keahey, D-Grove Hill, that would require motorists to carry $25,000 in coverage for a single injury or death, $50,000 for multiple injuries or deaths, and $25,000 for property damage.

The current minimum limits under Alabama’s mandatory insurance law are $20,000, $40,000 and $10,000, respectively.

Keahey’s bill now goes to the Senate, where an identical measure by Sen. Roger Bedford, D-Russellville, was passed 33-0 on Feb. 7. For the higher requirements to become law, Keahey’s bill must pass in the Senate or Bedford’s bill must win approval in the House. The governor’s signature would be needed, too.

The Legislature overwhelmingly approved a bill last year that would have raised the minimum requirements to the same amounts proposed this session, but Gov. Bob Riley killed it because there was no phase-in period for insurance companies and policyholders to adjust.

Keahey’s and Bedford’s bills provide a 90-day phase-in for new policies and 180 days for renewals.

Keahey said the legislation was the result of negotiations between insurance companies and plaintiff lawyers. He said Alabama’s insurance requirements haven’t been raised since 1983.

“It’s something long overdue,” he said.

Spokesmen for two of Alabama’s largest insurance companies, State Farm and Alfa, said the bills would have little impact on their customers because very few buy minimum coverage.

“This bill is a non-issue for us,” State Farm spokesman David Majors said.

Keahey estimated the bill would affect about 10 percent of Alabama motorists and would cause them to pay $20 to $30 more annually.

The move would bring Alabama more in line with the insurance requirements in Arkansas, Georgia, Mississippi, South Carolina and Texas. Tennessee, Virginia and Kentucky have the same limits for injuries and deaths but smaller amounts for property damage. Florida and Louisiana have lower amounts across the board, and North Carolina’s minimums are higher for injuries and deaths than those proposed for Alabama, according to the Insurance Information Institute.