Alabama motorists starting in August will be required to purchase increased levels of auto liability insurance under a measure signed into law Friday by Governor Bob Riley.

Minimum limits will be raised from $20,000 for one person in an accident to $25,000; from $40,000 for all persons injured to $50,000; and from $10,000 for property damage to $25,000.

The change is the first time limits have been raised since 1984, according to Julie Pulliam, director of public affairs, Southeast region for the American Insurance Association (AIA).

She added that increases in repair costs, health care costs and other related expenses contributed to the need to raise the limits. The state had considered similar legislation for several years, Ms. Pulliam noted.

Liz Reynolds, Southeast state affairs manager for the National Association of Mutual Insurance Companies (NAMIC), said of the auto limit bill, “That's been a long time coming.” She noted that the insurance industry is generally “very leery” of raising limits, because it translates into higher premiums, but in Alabama, she added, insurers and the Legislature were able to find agreeable language for the legislation.

Ms. Reynolds said that a nearly identical bill passed the Legislature last year, but it was sent to the governor without an implementation timeframe. The industry had asked the governor to veto the bill with the understanding that insurers would support the measure this year once an implementation timeframe was included.

The bill that passed this year calls for an implementation period of 90 days for new policies and 180 days for renewal policies, according to AIA. The association called this “a reasonable amount of time for carriers to adjust their operational procedures and for policyholders to be given timely notice.”

Other insurance bills that were passed by the Legislature and signed by the governor include SB 296, a measure to codify the authority of the Alabama Insurance Underwriting Association, the state's beach pool plan that is the insurer of last resort for coastal homeowners, and SB 3, which allows captive insurance companies to write homeowners insurance along the coast.

Ms. Pulliam said the legislation dealing with the AIUA makes no changes to the structure of the beach pool plan; its authority was simply codified into a state law as opposed to an Insurance Department regulation.

Ms. Pulliam said AIA has also been trying to get Alabama to set up standardized statewide building codes, but that proposal has been opposed by local governments that currently wield building code authority.

Opponents of the proposal contend that local governments are best suited to determine building codes for their specific areas, while Ms. Pulliam said AIA believes the state would be more efficient at establishing a uniform code that could be enforced at the state level.