Car insurance claims in Alabama

Alabama decides crash claims by fault, and it is one of the few states where being even slightly at fault yourself can end the claim outright. Every registered vehicle must carry liability cover: § 32-7A-4(a) forbids operating, registering or keeping the registration of a highway vehicle unless it is covered by a liability policy, a bond or a cash deposit, in amounts “no less than the minimum amounts set for bodily injury or death and for destruction of property under Section 32-7-6(c)”. Those amounts are $25,000 for bodily injury to one person, $50,000 for two or more, and $25,000 for property damage — and they live in the older safety-responsibility chapter, reaching the insurance mandate only by that cross-reference. Nothing in either section requires a first-party medical benefit; both were read end to end, and the only cover compelled is liability for injury and damage to others. Uninsured-motorist protection sits in every policy at those same bodily-injury limits unless the named insured rejects it, and the definition of an “uninsured” vehicle expressly includes one whose available limits are “less than the damages which the injured person is legally entitled to recover”, so underinsured cover is in the same section rather than a separate one. Read the rejection clause carefully, because it is asymmetric: the statute gives the named insured “the right to reject such coverage” without requiring that the rejection be in writing, but getting the coverage back at renewal does require a written request. Alabama also allows stacking, capped at the primary coverage “plus such additional coverage as may be provided for additional vehicles, but not to exceed two additional coverages” (§ 32-7-23(c)).

The shared-fault rule is the reason Alabama claims are fought the way they are. Contributory negligence is “an affirmative and complete defense” to negligence under Alabama law, and there is no apportionment: a claimant found negligent at all recovers nothing. To establish it a defendant must show that the claimant knew of the dangerous condition, appreciated the danger in the circumstances, and failed to exercise reasonable care by placing themselves in the way of it. Whether that happened is normally a jury question, and it becomes a question of law “only when the facts are such that all reasonable men must draw the same conclusion”. Two qualifications matter. A passenger is not sunk by the driver’s fault — “the contributory negligence of a driver does not bar a passenger’s right to recovery against a third party if the passenger is otherwise entitled to recovery” — and failing to wear a seat belt “shall not be considered evidence of contributory negligence” under § 32-5B-7, a section whose own title names the doctrine.

The deadlines split further apart than in almost any other state. An action for “any injury to the person or rights of another” must be brought within two years (§ 6-2-38(l)), and a wrongful-death action within two years of the death rather than of the crash (§ 6-2-38(a)). Damage to the vehicle, by contrast, is a trespass to personal property and runs six years (§ 6-2-34(2)) — but if the defendant is an employer sued for its driver’s conduct, § 6-2-38(n) pulls injury and property damage alike back to two years, so the same collision can carry two different periods depending on whom you sue. One more window is worth knowing: if a claim is filed in time, won, and then reversed on appeal, § 6-2-38(p) allows it to be recommenced within one year of the reversal even if the ordinary period has since run out. An action on the policy is a written promise and runs six years (§ 6-2-34(4), (9)). A policy’s own suit clause may be shorter than that. Chapter 27-14 of the insurance code, which is where such a floor would sit, was read section by section from § 27-14-1 to § 27-14-32 and contains none, and § 32-7-22 was read end to end with the same result — so no shorter figure is stated here, and the practical advice is to read your own policy. A companion provision explains a trap that costs Alabama claimants real money: under § 27-14-27, an insurer acknowledging notice of a claim, furnishing forms, or negotiating towards a settlement waives nothing at all, so a co-operative adjuster and a running clock are perfectly compatible.

The insurer’s clocks are regulatory, not statutory: § 27-12-24 forbids refusing to pay “without just cause” and “with such frequency as to indicate a general business practice”, and the whole section — all 748 characters of it — contains no number of days anywhere. The day counts are in Insurance Regulation 482-1-125, which defines “DAYS” as “Calendar days” at .03(c), so Alabama’s fifteen-day clock is fifteen calendar days. On a first-party claim the insurer must acknowledge notice within fifteen days unless it pays within that time (.06(1)), provide claim forms and assistance within fifteen days (.06(4)), advise of acceptance or denial within thirty days of properly executed proofs of loss “or the number of days specified in the policy” (.07(1)), say within thirty days if it needs longer and then write again at forty-five days and every forty-five thereafter (.07(2)), and tender payment within thirty days after accepting liability, agreeing the amount and receiving the documents (.07(6)). A denial is invalid unless it names the provision relied on. Both the thirty-day and forty-five-day duties fall away where the insurer has a documented, reasonable basis to suspect the claimant fraudulently caused or contributed to the loss, which is in the rule itself and is not a small exception. One duty is unusual enough to be worth knowing about: on an unresolved claim, an insurer must warn an unrepresented first-party claimant in writing about forty-five calendar days before the limitation period expires (.07(4)).

Almost all of that is written about first-party claimants, but three paragraphs reach the other driver’s claim and each is useful. An insurer may not steer a third party onto their own policy where liability and damages are reasonably clear (.08(2)); it may not falsely suggest that a third-party claimant’s rights will lapse unless a form or release is signed by a given date (.07(5)); and it may not deny or fail to adjust an otherwise valid third-party claim because its own insured has stopped co-operating, unless it proves the lack of co-operation is “material, substantial, and to the prejudice of the insurer” (.07(8), repeated for motor claims at .08(10)). On diminished value Alabama has a rule that names it, and the rule is narrower than it first looks: .08(6) requires an insurer that designates the repair shop to restore the car “as nearly as possible to its condition prior to the loss”, then says the paragraph “is not intended to and does not create a duty on the insurer to pay for any alleged diminution in value of the automobile”. The same paragraph adds that merely giving an insured the names of repair shops on request “shall not constitute designating a specific repair shop”, so the disclaimer bites only where the insurer actually picked the shop — and it says nothing whatever about a claim against the at-fault driver, which is why this row leaves the field unclear rather than answering no.

Reporting is narrower than the figure people quote. The driver’s duty under § 32-10-5(a) is triggered by injury or death only, with no dollar figure attached; the five hundred dollars that circulates as an Alabama reporting threshold belongs to § 32-7-6(a), where it starts the Director’s security-and-suspension process rather than any duty owed at the scene. That process has its own clocks and one genuinely useful concession: the Director suspends licence and registrations within sixty days of receiving the accident report, must give at least ten days’ notice before the suspension takes effect, and charges no reinstatement fee at all if you produce documentation that acceptable insurance was in force at the time of the crash.