Seen a t Insurance Journal:
The compromise legislation is essentially the national norm, with the $25,000 and $50,000 limits for physical injury used in 25 states and the District of Columbia, said Niko Corley, spokesman for the Alabama Association for Justice, formerly known as the Alabama Trial Lawyers Association.
Bedford and the trial lawyers pushed legislation for several years to raise the minimum coverage, and Alabama-based Alfa Insurance and other insurance companies fought it. Bedford’s original bill would have tied Alabama with Maine for the highest limits in the country.
Alfa President Jerry Newby said his organization decided not to oppose Bedford’s bill after he agreed to a more modest increase in the minimum requirements.
Alfa spokesman Dave Rickey said 6.5 percent of the company’s customers have insurance coverage below what Bedford’s bill proposes, and depending on their circumstances, they would see an increase of $10 to $16 for six months of coverage.
While I’m not familiar with Alfa’s underwriting, I do seem to recall that part of the reasoning for the small differential between 20/40/10 and 25/50/25 in Alabama is the result of the election of minimum limits being indicative of high risk customers.
There is something about the election of higher-than-minimum limits, of caring enough to protect your assets, to take more responsibility for your actions that indicates a lower level of risk than someone who is simply getting coverage in order to be able to get his/her tags renewed.
I can’t help but wonder if the $10-$16 hike might be a little understated.