Motorists in Alabama would be required to carry more liability insurance if a bill unanimously approved by the state’s House becomes law. It now moves to the Senate.
Other legislation is intended to encourage people to obtain proof of vehicle insurance.
For the past several years, drivers in Alabama have been required to carry liability insurance. The minimum amount has been set at $20,000 for a single injury or death, $40,000 for multiple injuries or deaths, and $10,000 for property damage.
Sponsored by Rep. Marc Keahey, D-Grove Hill, the bill would raise the minimum amount of liability insurance that motorists must carry. Requirements would be boosted to $25,000 in coverage for a single injury or death, $50,000 for multiple injuries or deaths, and $25,000 for property damage.
Motorists would be required to comply with the new limits when they renew their current policies.
The bill – HB15 – now is in the Senate Banking and Insurance Committee. An identical Senate bill – SB4 – is awaiting consideration in the House Judiciary Committee. The Senate previously approved it.
The Legislature approved a bill last year that would have raised the minimum requirements to the amounts sought in this year’s efforts. Gov. Bob Riley, however, allowed the bill to die without acting on it, commonly referred to as a “pocket veto.”
Riley said that while he supports the concept, he had concerns about the bill because it didn’t include an implementation period for insurance companies to prepare new policies and motorists to purchase them. The new insurance requirements would have taken effect as soon as the governor signed it.
With that in mind, this year’s push for higher minimum requirements includes a 90-day phase-in for new policies. Renewals would be phased-in over six months.
Two more bills are intended to get tough with people who don’t obtain proof of vehicle insurance. One bill – SB260 – targets drivers who register their vehicles without having insurance. Sen. Arthur Orr, R-Decatur, introduced a bill that would require proof of liability coverage before vehicle license tags could be distributed.
Insurance companies also would be required to share information electronically about the insurance with the state’s Department of Revenue.
Alabama law already requires motorists to have vehicle liability insurance coverage. But, they are not required to offer proof. In fact, insurers estimate that 30 percent of all residents drive uninsured, The Birmingham News reported.
Rep. David Grimes, R-Montgomery, offered another bill – HB37 – that would allow law enforcement to impound vehicles if the owner or operator cannot produce “satisfactory evidence” of registration and proof of financial responsibility. The vehicle owner would be on the hook for the impoundment.
After one year, the vehicle could be sold by the agency responsible for the impoundment.
Both bills are in committee.
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– By Keith Goble, state legislative editor