Shubert & Associates Insurance Blog

SB419, Mandatory Auto Liability Enforcement Bill Introduced in State Senate

Saturday, February 13th, 2010 | Uncategorized

SB419, Mandatory Auto Liability Enforcement Bill Introduced in State Senate

We’ve all had clients who have been involved in a car accident that was not their fault but the other driver did not have liability insurance. The majority of Alabama’s drivers have been in this situation. When someone is involved in an accident where the other driver does not have auto insurance, the financial burden and stress falls to the insured driver.

Over a decade ago, Governor Don Seigelman signed into law a bill creating mandatory insurance requirements for all drivers. This law is designed to protect other drivers from property harm, physical injury and financial injury. This last item is not often a strong consideration until larger problems arise when the family vehicle is hit by another driver, and this driver does not have any insurance coverage at all. This places a one-car family in a bind that could lead to larger issues.

However, the problem with Alabama’s mandatory insurance law has been enforcement. Drivers can obtain insurance and I.D. cards as proof of insurance and then cancel the policy within 30 days, yet that person still has what appears to be a valid paper I.D. Card. This problem would be solved when law enforcement officials and state regulatory agencies have electronic access to an online system that could instantly verify current status of an auto insurance liability policy.

Your Independent Agents Association is responding to over three decades of pleas from you and your clients to get involved in finding a solution to this problem because your clients are tired of their insurance always having to respond.

The enforcement of the auto insurance liability law will result in more people obtaining insurance, and keeping it, which will create a much larger spread of risk and rates can be absorbed by those drivers who are actually causing the accident.

Legislation has been introduced this week. SB419 was filed yesterday in the Senate and will soon be before the Alabama Legislature to address the epidemic of uninsured drivers in the state. This Enforcement of Mandatory Auto Liability Insurance is fiscally practical to all drivers in the state. These loopholes are hurting insurance policyholders and the insurance carriers. Let’s fix these gaps.

SB419 bill does two things. First, it sets up requirements for Alabama motorists to provide proof of liability insurance prior to registering their car, as well as require proof of insurance when they re-register their car. Second, the bill establishes an online verification system so that law enforcement can verify proof of liability insurance when you are stopped or involved in an accident. These two provisions have been absent from the original bill which allowed widespread fraud with the use of invalid Auto Liability I.D. Cards.

SB419 bill will do many things for the State of Alabama. New premium taxes will generate additional funds for education, as well as the general fund. It will protect consumers who are struck by uninsured motorists from having to absorb the property damage to their car for lack of recovery from the at-fault insured motorist. It will provide for a source of recovery for injuries to drivers who when previously injured by uninsured motorists had to rely on their own medical payments and/or health insurance with little or no recourse against the at-fault party.

This bill won’t completely eliminate all these problems but it will bring those who have simply ignored the law to the table and in the process, hopefully reduce our double digit uninsured motorist percentage.

Join us at the Legislative Conference next week to talk to your lawmakers about the importance of the Mandatory Auto Liability Enforcement Law.

AIIA has distributed a press release to media outlets across the state about SB419. If you would like a copy for your local newspaper or your clients, please contact Alison Ray King at aray@aiia.org for a copy. A smiliar article ran in The Birmingham News yesterday, February 11. Click here to read the article.

Additionally, AIIA Past President Joe Fuller will be on The Matt Murphy Show Monday morning from 7:30 a.m. to 8:00 a.m. Please join our Facebook page, Strengthen Alabama’s Mandatory Auto Insurance Law,
created by lobbyist Pascal Caputo by clicking here.

We urge you to contact your State Senator and ask them to vote yes when this bill comes up in Committee and yes when it comes to the Senate Floor. We hope to get the filed in the House as soon as possible.

Click Here for Contact Info of Senate Members
Click Here for Contact Info of House Members

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