Car insurance claim rules in Alabama

The clock on an Alabama claim

Chapter 482-1-125 of the Alabama Administrative Code sets standards for how property and casualty insurers handle claims. Most of its day counts protect first-party claimants, meaning you when you claim under your own collision, comprehensive, medical payments or uninsured motorist coverage. Several rules, such as the payment deadline, are written for any claimant.

The decision clock starts when the insurer receives a properly completed proof of loss, so send what it asks for quickly and keep dated copies. If you have no lawyer, the rule also asks the insurer to warn you about 45 days before the deadline to sue on a first-party claim runs out. When a file stalls past these limits, our page on claims that drag on shows how to press for an answer in writing.

When an Alabama car is a total loss

Under the salvage title law, Section 32-8-87 of the Code of Alabama, a total loss occurs when an insurer or anyone else pays a settlement on a car whose damage is greater than or equal to 75% of its fair retail value before the damage. Minor damage from theft or vandalism does not count. The car then needs a salvage certificate, and the insurer that takes it must get the title from you when it pays.

• Comparable car. For a first-party total loss, the insurer may offer a comparable car of the same make, same or newer year, similar body style, options and mileage, or pay what such a car actually costs, less your deductible.
• Taxes and fees. The settlement includes taxes, license fees and transfer fees, capped at what would have been paid on your car at the time of settlement.
• Itemized deductions. Any deduction, including for salvage, must be itemized and measurable, and a settlement that departs from these methods must be backed by documentation of the car's condition.

The total loss check applies the 75% line to your repair estimate and the car's value. How actual cash value should be built is in our guide to total loss claims.

Reporting an Alabama crash

Section 32-10-5 of the Code of Alabama requires the driver in a crash that injures or kills someone to notify the police at once, by the quickest means available: the city police inside a city, otherwise the county sheriff or the state highway patrol. The section sets no dollar threshold for damage-only crashes, but a police report still gives your insurer a neutral record.

A second duty is easy to miss. Under the Motor Vehicle Safety-Responsibility Act, Section 32-7-5, the driver must file a written accident report with the state within 30 days when a crash injures or kills someone or causes more than $250 of damage to any one person's property. The state uses it to check whether the drivers had insurance. Officers who investigate a crash send their own report to the state within 24 hours of finishing.

Fault, contributory negligence and who pays

Alabama is an at-fault state: the driver who caused the crash, through their liability insurance, pays for the damage and injuries they caused. Alabama courts still apply contributory negligence, a strict, all-or-nothing rule. If you were even slightly at fault, the other driver's insurer can argue that you recover nothing from it.

• Your own coverage matters more. Collision coverage pays for your car whoever was at fault, minus your deductible. Your insurer can then seek its money from the other side.
• Uninsured motorist coverage pays when the at-fault driver has no insurance or too little; see uninsured motorist claims.
• Watch what you say. Because a small share of fault can matter so much, stick to facts with the other insurer's adjuster.

Deadlines to sue and where to complain

Section 6-2-38(l) of the Code of Alabama gives two years to sue for an injury to a person or to the rights of another that does not arise from a contract, which covers most crash claims for injuries and damage. A wrongful death claim also has two years. Talks with an adjuster do not stop the clock.

1. Ask the insurer in writing for the reason for a denial or a low offer and the policy language it relies on.
2. Contact the Alabama Department of Insurance at 334-241-4141 on weekdays from 8 a.m. to 5 p.m.
3. File a complaint with the department online, or mail its complaint form to P.O. Box 303351, Montgomery, AL 36130-3351. Our guide to insurance department complaints shows what to include.

Questions people ask