A Reminder From Our Supreme Court Concerning The Procedure To Claim Underinsured Motorist Coverage

A Reminder From Our Supreme Court Concerning The Procedure To Claim Underinsured Motorist Coverage

Huntsville Car Accident And Injury LawyersAlabama has a huge problem with uninsured and underinsured drivers. While Alabama law does require liability coverage, the law lacks needed enforcement. And, our law only requires minimum limits far too little for any serious personal injury or death. Because of this, car accident victims are often left without the compensation needed for their medical care or disabilities.

I’ve written several articles about the problems caused by Alabama drivers who don’t have liability insurance. Because of this issue, several Alabama legislators have worked to develop a system of instant verification. That’s a great first step. While important in keeping totally uninsured drivers off our roadways, instant verification does not completely resolve the problem. That system does nothing to resolve the problem created when a driver with insurance, but not enough insurance, causes an accident.

What if you suffer a disabling injury in a car accident caused by another driver? Suddenly, you cannot work. You are faced with huge medical bills. Then, on top of that, you discover the other driver had only $50,000 in insurance coverage. That coverage is certainly not enough to compensate you for a disability that causes you to be unable to work for the rest of your life. It covers only a fraction of your damages. If you suffer any significant injury, that is far too little coverage. Alabama currently only requires liability coverage in the amount of $25,000. That minimal amount is basically exhausted with a helicopter ride to the hospital or any significant testing in the emergency room. What can you do? How should you protect yourself from an at-fault driver who possesses minimum $25,000 liability limits? For that matter, how should you protect yourself from an at-fault driver who possesses a little higher liability limits of $50,000 or $100,000. After all, we are still talking far, far too little for any serious accident. Think about the impact on your family of an injury that prevents you from working. Think about the impact on your family of an injury that requires major surgery or a period of rehabilitation.

If you have uninsured / underinsured coverage (often referred to as “UIM”), then you can receive compensation for your damages from your own insurance policy where the at-fault driver has no liability insurance or insufficient liability insurance. This is very valuable coverage!

When an at-fault driver is totally uninsured, you can simply make a claim directly against your own carrier for this coverage. However, when the at-fault driver has some coverage, but not enough, the procedures are a little different. And, if you don’t follow the correct procedure, you will lose any right to receive this additional coverage. The Alabama Supreme Court recently issued a harsh reminder to anyone seeking benefits for injuries caused by an underinsured driver that the procedures must be followed. For that reason, you need to seek legal advice from a lawyer who understands these issues.

So, what must you do to make a claim for UIM benefits when the at-fault driver does not carry enough insurance to cover all your damages? Basically, before agreeing to any settlement with the at-fault driver (or his carrier), you must follow several procedures designed to notify your own UIM carrier and allow it time to both investigate the claim and determine how to proceed. Here is the exact question and answer from The Alabama Supreme Court:

Under Alabama law does the failure of an insured to give prior notice to his or her insurer of a proposed settlement and release of an alleged tortfeasor cause the insured to forfeit underinsured motorist coverage regardless of the insured’s actual knowledge of said coverage and regardless of prejudice to the insurer if the insured has possession of the policy which provides the coverage?

We answer this question in the affirmative.

Downey v. Travelers Property Casualty Insurance Company. Not only did The Alabama Supreme Court remind us of the procedure that must be followed, the Court also basically said there would be no exceptions or excuses allowed.

This is an area where you can easily lose your right to additional insurance coverage. That is why it is very important to seek advice from someone who understands the issues involved in automobile collisions and insurance.


From its office in Huntsville, the Blackwell Law Firm represents people across Alabama. Many of our personal injury cases involve car accidents and insurance claims. If you have questions, let us know. We are happy to provide answers.