Ignoring Alabama's New Mandatory Auto Insurance Law Could Be Costly, Warns Nationwide Insurance

24 May 2000
Ignoring Alabama's New Mandatory Auto Insurance Law Could Be Costly, Warns Nationwide Insurance
    BIRMINGHAM, Ala., May 24 The next time you are driving and
are stopped by a sheriff or police or state patrol officer, you may be
surprised what you will be asked to provide.
    June 1 will be a critical day for Alabama drivers.  That's when Alabama's
new mandatory auto insurance law will take effect.  Motorists without
insurance need to take some very important steps to make sure they meet the
law.
    Alabama's new law, patterned after the decade-old system used in Illinois,
is aimed at reducing the number of uninsured drivers.  Illinois has seen its
rate of uninsured drivers dip to less than seven percent without substantially
increasing insurance premiums.
    While some may see adding insurance coverage as an unnecessary burden,
avoiding buying auto insurance could prove to be costly.  Violators, who will
be identified through routine traffic stops and random checks, could face
significant penalties for not being insured.
    "It is very important for people to make sure they have auto insurance,"
said Randy Jones, a Nationwide Insurance agent located in Albertville.  "With
the way this law is structured, having insurance will be less costly in the
long run.  Drivers can't dismiss the importance of being insured."
    For the first offense, there is a fine of up to $500, a reinstatement fee
of $100 and proof of insurance coverage for one year.  This insurance will
have minimum limits of $20,000 for bodily injury liability for one person
involved in one crash; $40,000 bodily injury liability for two or more persons
involved in a crash; and $10,000 property damage coverage for destruction of
property.
    Subsequent offenses will result in fines up to $1,000, a $200
reinstatement fee, proof of insurance coverage for three years and a mandatory
four-month suspension of vehicle registration.  The minimum insurance coverage
is required by the state for drivers who are high risk; those policies are
more costly than a standard auto policy.
    Jones said, "Drivers should shop for the best coverage and service. The
cheapest policy may not be the most beneficial policy if you have a crash.
Nationwide prides itself in offering comprehensive products and excellent
customer service."
    Some important tips on buying auto insurance include:  comparison shop;
ask for higher deductibles; buy a lower profile car; ask about low mileage
discounts; look for seat belt or airbag discounts; and explore other discount
options that vary from car to car and company to company.
    Nationwide, a Fortune 500 organization with assets of more than $100
billion, is the nation's fifth-largest auto insurer.