Ala. Legislature Approves Auto Insurance Hikes, Defers Building Code

The Alabama Legislature adjourned yesterday after giving final approval to a key insurance measure that will increase the state’s auto liability minimum limits from 20/40/10 to 25/50/25.

Legislators deferred to the 2008 session final action on a bill establishing a building code council with the authority to adopt a statewide building code.

“The minimum limits under the state’s auto financial responsibility law had not been changed since 1984,” according to Cecil Pearce, AIA vice president, Southeast Region. “While we are always concerned about the economic impact on consumers when the minimum limits are raised, this (SB 202) is an appropriate adjustment, especially in light of the fact that the state’s trial lawyers were advocating making Alabama’s minimum limits the highest in the country. What we ended up with is more in line with other states.”

AIA is concerned about implementation of the new law, as it becomes effective immediately upon the governor’s signature.

“We will be working closely with the state Department of Insurance to ensure for policyholders as smooth a transition as possible to the new, higher limits,” Pearce added.

A measure supported by AIA, HB 526, that legislators failed to pass in the session’s final hours, would have established a 10-member statewide building code council, including a representative from the property-casualty industry, and would have tasked this council with adopting a statewide building code.

“A statewide building code in Alabama is long overdue,” said Pearce. “Establishing and enforcing strong building codes is a key part of AIA’s natural catastrophe agenda, and we will continue to press upon legislators the fact that a strong building code can play a significant role in reducing deaths, injuries and property damage from natural catastrophes.”

Source: American Insurance Association