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Who Needs Uninsured/Underinsured Motorist Coverage?

As of 2019, Alabama was ranked number seven (7) for most uninsured drivers in the United States. It was estimated over 19% of drivers in Alabama were uninsured at that time.

Uninsured/underinsured motorist coverage is key to protecting yourself in the event of an accident. The average cost of adding a $25,000.00 per person and $50,000.00 per accident uninsured/underinsured policy is between $5.00 to $10.00 per month.* In Alabama, you are able to stack that coverage up to three times if you have it on multiple vehicles. (effectively $75,000.00/$150,000.00 if you had three vehicles on your policy with that coverage).

The minimum liability policy in Alabama is $25,000.00/$50,000.00. That means without an underinsured policy, regardless of the severity of the injuries you suffer, your maximum recovery would be $25,000.00.

Here is an example of why this is so important: my firm recently represented an individual who lost a limb in a motor vehicle accident. Most people would hear this and think that the value of that case would be six figures or more. However, there was only $50,000.00 in coverage available in this individual's case, and they did not have uninsured/underinsured coverage. As a result, they face accepting $50,000.00 in exchange for one of their limbs.

Another less thought of situation where having uninsured/underinsured motorist coverage can make a difference is multiple vehicle accidents. As mentioned above the minimum policy is $50,000.00 per accident. That means regardless of the size of the accident the insurance company would only have to pay $50,000.00 for bodily injuries of everyone involved. If an accident involving a large number of vehicles is caused by an individual with a minimum policy, it is often not enough to cover all the people involved.

For instance, if it is a ten (10) car pileup and each vehicle has two people, that is a total of eighteen (18)** people that may need to be covered by that $50,000.00. Typically when there is not enough money to cover everyone the insurance company will split the funds based on percentages. They pool everyone's medical bills into one large number, then determine each person's percentage of that total. That percentage is then used to determine how much of that $50,000.00 you would be entitled to.

Don't let the additional cost of $5.00 per month be the reason you are left out in the cold after an accident that was someone else's fault. The minimum policy limits are not sufficient to cover the damage caused by many accidents on our roads today.

The answer to the title of this article is everyone in Alabama needs to have an uninsured/underinsured coverage provision added to their policy. I think getting at least 100,000/300,000 uninsured/underinsured policy is a good idea for most people. If you have multiple vehicles this amount of coverage ensures that there will be enough money to cover your medical bills and damages in the event of a serious accident. Unlike liability insurance that covers someone else if you cause an accident, uninsured/underinsured coverage is there to cover you in the event of an accident where the person at fault does not have insurance, or enough insurance. If you pay to cover other people in the event of an accident, why would you not make sure you are covered as well.

* Information related to average cost of adding uninsured/underinsured motorist coverage was provided by Thomas Shelton. (Alfa Insurance Agent based in Oxford, Alabama) This information is based on his personal experience and is not a guarantee of price. Thomas Shelton's phone number is (256) 831-7770, he is easy to work with and is excited to help you find the best policy for your personal needs.

**Calculated as excluding the at fault driver and his passenger from the people potentially covered under the at fault driver's liability insurance.

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