Uninsured/Underinsured Motorist in Alabama: What It Covers and When It Pays Out

Getting hit by a driver with no insurance or too little coverage can leave you staring down thousands in medical bills and repairs. 

Alabama law requires insurance companies to offer uninsured and underinsured motorist coverage to every policyholder. Still, you have to know what you actually bought—and when it kicks in.

Uninsured motorist coverage pays when the at-fault driver has no insurance at all. Underinsured motorist coverage steps in when the other driver’s policy limits are too low to cover your full damages.

Both types of coverage replace the money you’d typically get from the negligent driver’s liability policy. Nearly 20% of Alabama drivers are uninsured, so this protection matters more than most people realize.

This guide breaks down what UM and UIM actually cover and when they pay out. You’ll see how payouts work, how to file a claim, and what proof you need if the other driver leaves the scene after a crash.

Key Takeaways

• Uninsured motorist coverage pays when the at-fault driver is uninsured. Underinsured coverage fills the gap when the policy limits are too low.
• Alabama requires insurers to offer UM/UIM coverage, but you can reject it in writing if you want.
• Your UM/UIM limits should match your liability limits, but higher limits can make sense depending on your assets and risk tolerance.

The 20-Second Answer: When UM/UIM Pays Out in Alabama

UM/UIM coverage jumps in when another driver causes an accident, but it can’t fully cover your damages. This happens in three main situations: the at-fault driver has no insurance, their insurance limits are too low, or the driver flees the scene.

The 3 Most Common Payout Triggers 

Uninsured Driver Accidents

Alabama law requires insurance companies to offer uninsured motorist coverage to all policyholders. Your UM coverage pays out when an at-fault driver has no bodily injury liability insurance at all.

This applies even if the other driver thought they had coverage, but their policy lapsed. You file a claim with your own insurance company instead of chasing down the uninsured driver yourself.

Underinsured Driver Limits

UIM coverage kicks in when the at-fault driver carries insurance, but their limits fall short of your total damages. Say you have $100,000 medical bill, but the other driver only has $25,000 in liability coverage—your UIM policy covers the gap.

You must exhaust the at-fault driver’s policy before accessing your UIM benefits. Your coverage pays the difference between their limits and your actual damages, up to your own policy maximum.

Hit-and-Run or Unknown Driver

Your UM coverage also protects you when you’re struck by a negligent uninsured driver who flees the scene. This applies to hit-and-run accidents where you can’t identify the other vehicle or driver.

You’ll need to report the accident to the police promptly and provide as much information as possible about the incident. Most policies want you to file a police report within a certain timeframe to qualify for UM benefits in hit-and-run cases.

UM Vs UIM In Plain English (And Why People Mix Them Up)

Uninsured motorist coverage applies when a driver is uninsured. Underinsured motorist coverage kicks in when the at-fault driver has some insurance, but not enough to cover your damages.

People often mix them up. Their names sound so similar, and both coverages protect you when other drivers can’t fully pay.

“Uninsured” Can Include Hit-And-Run Scenarios

Uninsured motorist coverage extends beyond crashes involving drivers without insurance. In Alabama, UM coverage can pay for injuries and damages if you’re the victim of a hit-and-run where the at-fault driver flees.

That matters because hit-and-run drivers are legally treated as uninsured under your policy. You can file a claim against your UM coverage even if you never find out who hit you.

What qualifies as uninsured under UM coverage:

• Drivers with no insurance policy
• Hit-and-run drivers you can’t identify
• Drivers whose insurance company denies the claim or goes bankrupt
• Phantom vehicles that force you off the road without making contact

Your UM policy steps in to cover medical bills, lost wages, and pain and suffering just like if you were filing a claim against the at-fault driver’s liability insurance.

UM/UIM At A Glance 

Coverage Type	What It Protects	When It Pays Out
Uninsured Motorist (UM)	Your injuries and damages	The at-fault driver has no insurance
Underinsured Motorist (UIM)	Your injuries and damages	At-fault driver’s limits are too low
UM Property Damage	Your vehicle repairs	An uninsured driver damages your car
UM Bodily Injury	Medical bills, lost wages, pain, and suffering	You’re injured by an  uninsured driver

UM/UIM coverage protects you when other drivers can’t pay for the harm they cause. Many drivers on Alabama roads don’t carry enough insurance—sometimes none at all.

Key Points About Your Coverage:

• You file claims with your own insurance company
• Coverage applies to hit-and-run accidents
• Protects all passengers in your vehicle
• Works alongside your health insurance for medical costs

Your UM coverage kicks in when the at-fault driver has zero insurance. Your UIM coverage helps when their policy limits fall short of your damages.

Both types cover medical expenses, lost income, and vehicle damage, depending on your policy. You don’t pay a deductible for bodily injury claims under uninsured and underinsured motorist coverage.

This coverage follows you—even if you’re a passenger in someone else’s car or get hit as a pedestrian.

What Alabama Law Actually Says (Offer Required, Rejection Must Be In Writing)

Alabama law requires insurance companies to offer uninsured motorist coverage to all policyholders buying auto insurance. 

You can reject it, but only in writing. The law sets a clear line between what insurers must offer and what you actually have to carry.

What “Offered” vs. “Required To Carry” Means

Under Alabama Code 32-7-23, your insurance company must include uninsured and underinsured motorist coverage in every policy by default. 

So, UM/UIM coverage is automatically part of your Alabama car insurance unless you take action to remove it.

You aren’t legally required to carry this coverage. Alabama law requires uninsured and underinsured motorist coverage to be offered, but you don’t have to keep it on your policy.

To remove UM/UIM coverage from your policy, you have to reject it in writing. All motor vehicle liability policies must contain uninsured/underinsured coverage unless the named insured rejects UM coverage in writing. 

Your insurance company will send you a form to document your rejection if you choose coverage below your liability limits or drop it altogether.

Woodall & Hoggle Insurance Agency can review your Alabama UM/UIM options and explain when coverage pays after a hit-and-run. Contact us today.

What UM/UIM Typically Covers (And What It Usually Doesn’t)

Uninsured motorist coverage in Alabama comes in different forms, and knowing which type you have determines which expenses are covered. 

Most policies split coverage into bodily injury and property damage, but many drivers don’t realize these are separate protections.

Bodily Injury Vs Property Damage: Don’t Assume Both

Uninsured motorist bodily injury (UMBI) pays for medical bills, lost wages, and pain and suffering if an uninsured driver hurts you or your passengers. This is the more common form and is required in Alabama.

Uninsured motorist property damage (UMPD) covers repairs to your vehicle after a crash with an uninsured driver. Alabama doesn’t require this coverage, and many policies leave it out entirely.

You might have UMBI coverage but no UMPD. That means your medical expenses get covered after an accident with an uninsured driver, but you’ll pay for car repairs yourself unless you have collision coverage.

Check your policy declarations page to see which types you carry. Don’t just assume both are included because you see “uninsured motorist coverage” listed.

What UM/UIM Typically Covers:

• Medical bills from car accident injuries
• Lost wages if you can’t work
• Pain and suffering damages
• Property damage to your vehicle (if you bought UMPD)
• Injuries to your passengers

What UM/UIM Doesn’t Cover:

• Damage from hit-and-run accidents if the driver is found and has insurance
• Accidents where you’re at fault
• Intentional acts or criminal activity
• Damage to property that’s not your car
• Medical expenses above your policy limits

Your declarations page shows your coverage limits as split limits or a combined single limit. Split limits are represented as three numbers: 25/50/25.

The first number is per-person injury coverage. The second is per-accident injury coverage. The third is property damage coverage.

Check your declarations page for these items:

Coverage Type	What to Look For
Uninsured Motorist Bodily Injury	Listed as “UM” or “UMBI”
Underinsured Motorist Bodily Injury	Listed as “UIM” or “UIMBI”
Uninsured Motorist Property Damage	Listed as “UMPD”

Some policies combine UM and UIM into one line. Others split them up. Your premium amount sits next to each coverage type.

The Payout Mechanics: How UM/UIM Checks Are Determined

Your UM/UIM coverage is subject to the strict limits set by your policy. These limits cap the maximum your insurer will pay, no matter how much your damages cost.

Per Person / Per Accident Limits—Explained With One Clean Example

Your UM/UIM policy might list two limits, such as $25,000/$50,000. The first number ($25,000) is the maximum payout per person injured. 

The second ($50,000) is the maximum total payout per accident, even if several people are hurt.

Picture this: you have $25,000/$50,000 UM coverage and get hit by an uninsured driver. Three passengers ride with you when it happens.

Person	Injuries	Available UM Payment
You	$30,000 in damages	$25,000 (per person limit)
Passenger 1	$20,000 in damages	$20,000
Passenger 2	$8,000 in damages	$5,000 (hits per accident limit)

You can’t collect more than $25,000, even if your injuries cost $30,000. The three claims total $53,000, but your UM/UIM coverage pays a maximum of $50,000 per accident. Passenger 2 receives only $5,000 because that’s all that remains of the $50,000 cap.

When UIM Pays Out (The “Other Driver Had Insurance…But Not Enough” Scenario)

Underinsured motorist coverage comes in when the at-fault driver’s insurance doesn’t cover all your damages. Your policy bridges the gap between what their insurance covers and what you need.

The “Limits Gap” Illustrated

Let’s say you have $100,000 in underinsured motorist coverage. The at-fault driver has $25,000 in liability coverage and causes an accident that leaves you with $80,000 in medical bills and lost wages.

The other driver’s insurance pays up to its $25,000 limit first. You still need $55,000 more to cover your damages. Your underinsured motorist coverage pays that remaining $55,000.

Source	Amount Paid
At-fault driver’s insurance	$25,000
Your UIM coverage	$55,000
Total received	$80,000

Your underinsured motorist coverage pays only after the other driver’s policy limits are reached. You can’t collect from both policies for the same dollar of damage. The key is that your damages must exceed the at-fault driver’s insurance coverage.

Hit-And-Run In Alabama: Does UM Apply, and What Proof Matters?

Uninsured motorist coverage applies to hit-and-run accidents in Alabama when you can’t identify the at-fault driver. Your insurance company treats an unknown driver the same as an uninsured one for UM claims.

The “What To Do In The First 24 Hours” Checklist

Call 911 right after a hit-and-run. Police documentation is critical—your insurance company will want an official report before handling your UM claim.

Snap photos of all vehicle damage, the scene, debris, and any injuries. If witnesses saw it happen, get their names and contact info before they leave.

Write down everything you remember about the other car. Try to note the color, make, model, any part of the license plate, which way it went, and what time it happened.

Medical payments coverage may pay your immediate medical costs while you file your UM claim. Get checked out within 24 hours, even if you feel fine—sometimes injuries show up later.

Contact your insurance company to report the hit-and-run. Your policy might have specific deadlines for filing UM claims after an accident with an unidentified driver.

Key documents to gather:

• Police report number
• Medical records and bills
• Photos of damage
• Witness statements
• Repair estimates

Choosing Your UM/UIM Limits In Alabama (Match Your Liability—Then Your Risk)

Your UM/UIM limits should start with your liability coverage amounts. Then adjust based on your financial situation. 

The minimum uninsured motorist coverage starts at $25,000 and costs about $6- $7 per month. But let’s be honest, that’s rarely enough protection.

Quick Rule Of Thumb: Don’t Underinsure The “You” Side

It’s smart to match your bodily injury liability limits. If your policy has $100,000/$300,000 in liability coverage, set your UM/UIM limits to the same levels.

That makes sense—you’ve already decided how much protection others need if you cause a crash. Why not give yourself the same safety net if an uninsured driver hits you?

If you include underinsured motorist coverage in Alabama, the amount must match your liability and uninsured motorist limits. You can’t pick different numbers for each one.

Think about higher limits if you:

• Have significant savings or assets
• Earn a high income, you could lose during recovery
• Support dependents who count on your paycheck
• Drive a lot in areas with lots of uninsured drivers

The price increase from minimum coverage to higher limits is usually modest compared with the peace of mind and financial protection you gain.

Limit Selection Ladder

When you pick UM/UIM coverage in Alabama, you have to choose limits that fit your situation. Alabama law makes insurers offer uninsured motorist coverage to everyone buying auto insurance.

UM/UIM limits can’t go higher than your liability limits. If you have $50,000 in liability coverage, your UM/UIM coverage also caps at $50,000.

Common Coverage Limit Options:

• $25,000/$50,000 – Minimum level (covers $25,000 per person, $50,000 per accident)
• $50,000/$100,000 – Mid-range protection
• $100,000/$300,000 – Strong coverage for serious accidents
• $250,000/$500,000 – High-level protection
• $500,000/$1,000,000 – Maximum protection for most policies

Consider your assets when setting a limit. If you have savings or property, higher limits provide greater protection.

Medical bills from a bad accident can add up fast—sometimes into the hundreds of thousands. That’s not an exaggeration; it’s just reality.

Take a look at the average insurance coverage in your area. If most drivers only carry state minimums, your underinsured motorist coverage matters even more.

The price jump between coverage levels is usually small. For example, bumping up from $25,000/$50,000 to $50,000/$100,000 might cost you a few dollars more each month.

Your UM/UIM coverage limits decide how much financial protection you have if another driver causes a wreck. Pick limits that match your finances and your comfort with risk—there’s no magic number, but don’t leave yourself exposed.

How to File a UM/UIM Claim in Alabama (A Clear, Step-by-Step Process)

Notify your insurer as soon as possible after the crash. Then, gather your documentation and open the UM/UIM claim under your policy. 

Your carrier will confirm the at-fault driver’s insurance status and evaluate your damages before determining what, if anything, is payable.

Step 1: Report the Accident and Open the Claim

Call your insurance company promptly and tell them you may be making a UM/UIM claim. Request the claim number and the name, phone number, and email address of the adjuster handling your file.

Step 2: Confirm the Other Driver’s Insurance Situation

To pay a UM/UIM claim, the insurer typically needs proof that the other driver was:

• Uninsured (no coverage), or
  
• Underinsured (coverage exists, but limits are too low for your documented damages)

Request documentation from the other driver’s insurer (or your adjuster) showing coverage details, denial, or limits information.

Step 3: Build Your “Proof Packet” (Documents That Actually Move the Claim)

Start collecting and organizing everything that supports fault, injuries, and financial losses:

Crash + fault documentation

• Police accident report (with case number)
• Driver/contact info for all parties
• Witness names and phone numbers
• Photos of the scene and vehicle damage

Medical + injury documentation

• ER/urgent care records, physician notes, therapy records
• Itemized medical bills and pharmacy receipts
• Treatment timeline (dates of visits and providers)

Income + expense documentation

• Pay stubs and an employer letter confirming missed work and wage loss
• Rental car receipts and transportation costs (if applicable)
• Any out-of-pocket receipts tied to the accident

Coverage documentation

• Your declarations page showing UM/UIM limits (and any MedPay/collision coverage)

Step 4: Submit Clean Copies and Track Every Interaction

Send copies (not originals) and keep a running claim log:

• Date/time of calls and emails
• Who did you speak with
• What was requested, and what you provided
• Deadlines you were given

This simple paper trail prevents “we never received that” delays.

Step 5: Review the Evaluation and Next Steps

After the carrier reviews your documentation, you may receive a request for additional records, an evaluation of the damage, or a settlement discussion. Keep documenting ongoing treatment and expenses until the claim is resolved.

UM/UIM Claim Checklist 

Essential items to gather

• Declarations page + policy info
• Police report + case number
• Photos of the  scene and vehicle damage
• All driver contact details + witnesses
• Medical records + itemized bills
• Lost wage proof (pay stubs + employer letter)
• Repair estimates/receipts
• Proof of the other driver’s insurance status or limits
  

Key items to track

• Date you reported the claim.
• Claim number + adjuster contact details
• What you submitted (and when)
• Any offers or settlement communications
  

How Woodall & Hoggle Helps (Quote Comparison + Coverage Design)

Woodall & Hoggle Insurance Agency takes the time to understand your needs before recommending coverage. They dig through multiple carriers to find policies that strike a good balance between cost and protection.

The agency lets you compare quotes from different insurance companies. You’ll see price differences for UM/UIM coverage side by side, which makes things so much easier.

No need to call around to every insurer yourself. That’s a relief, honestly.

Key Services They Provide:

• Quote comparison across multiple carriers
• Coverage gap analysis
• Policy customization based on your budget
• Explanation of UM/UIM limits and options

Woodall & Hoggle offers additional benefits for auto insurance policyholders, including roadside assistance, rental car coverage, and uninsured/underinsured motorist protection. Their agents help you determine the proper coverage limits based on your assets and financial situation.

They design coverage packages for Alabama drivers and know the state requirements inside out. If you’re not sure what you might be missing, they’ll spot those exposures for you.

You can tweak your policy with their team as your needs change. They break down all the insurance jargon in plain English, so you actually know what you’re paying for.

This kind of guidance matters, especially when you’re picking between UM/UIM coverage levels. It’s not always obvious what fits best, but they’re there to walk you through it.

Unsure if your UM/UIM limits match your liability? Get a side-by-side quote comparison with Woodall & Hoggle Insurance Agency and adjust coverage. Schedule an appointment.

Frequently Asked Questions 

Is UM/UIM coverage required in Alabama?

In Alabama, insurers must include uninsured motorist coverage on auto policies unless the named insured rejects it in writing. You can decline UM/UIM, but keeping it in place helps protect you if the at-fault driver can’t pay.

What does uninsured motorist (UM) cover in Alabama?

Alabama UM coverage can help pay for injury-related losses when an uninsured driver or a hit-and-run driver hits you. Depending on policy terms, it may also address certain property damage, but don’t assume it’s automatic.

What’s the difference between UM and UIM coverage?

Uninsured motorist (UM) applies when the at-fault driver has no insurance or can’t be identified. Underinsured motorist (UIM) applies when the at-fault driver has coverage, but their liability limits are too low for your damages.

Does UM cover a hit-and-run in Alabama?

UM often responds to hit-and-run injuries, but prompt reporting and documentation matter. Call the police, obtain the report number, take photos, and notify your insurer promptly. Your carrier will evaluate whether an unknown vehicle caused the crash under your policy.

Does UM/UIM pay for damage to my car?

UM coverage is primarily for bodily injury. If you want help fixing your car after an uninsured driver crash, you may need collision coverage or a specific uninsured motorist property damage option, depending on your insurer and Alabama policy terms.

When does underinsured motorist (UIM) coverage pay out?

UIM comes into play after the at-fault driver’s liability coverage is confirmed and proves insufficient for your documented damages. Your payout is capped by your UIM limits and coordinated with other available coverage, so clean medical and wage documentation matters.

How much UM/UIM coverage should I carry in Alabama?

A common strategy is to match UM/UIM limits to your liability limits so your protection isn’t weaker when the other driver is uninsured or underinsured. If you commute frequently or have higher assets, consider higher limits after reviewing the quote options.