Alabama Casualty Study Guide

Alabama casualty has one doctrine that outweighs everything else on the paper, and it is the harshest rule of its kind left in American tort law. Get contributory negligence right and you have banked the state’s signature question. Then add a workers’ compensation threshold set higher than almost anywhere else, and 25/50/25 auto minimums, and the Alabama block is largely done.

Contributory negligence — one percent and you’re out

Alabama is one of a small handful of jurisdictions that still applies pure contributory negligence: if the injured party bears any share of the fault — one percent — recovery is barred entirely. Not reduced. Barred.

Almost every other state has moved to some form of comparative fault, where a claimant 30% at fault recovers 70% of damages, or where recovery stops at a 50% or 51% bar. Alabama never made that move, and the exam knows that your national prep material assumes otherwise.

Auto — 25/50/25, tort, and UM you have to refuse in writing

Alabama is a fault (tort) state with no mandatory PIP. Minimum liability limits are 25/50/25 under Ala. Code § 32-7-6 — $25,000 for bodily injury to one person, $50,000 per accident, $25,000 for property damage.

Uninsured motorist coverage must be offered, and under § 32-7-23 it is included in the policy unless the insured rejects it in writing. Underinsured motorist coverage works the same way. The tested distinction is between offered and mandatory: Alabama does not force UM on anyone, but silence does not decline it either — the rejection has to be written.

Drivers the voluntary market will not take go to the Alabama Automobile Insurance Plan (ALAIP), the assigned-risk mechanism, which has been operating since 1948 (§ 27-23-24).

Workers’ compensation — five employees, and a formula in two parts

Alabama requires workers’ compensation only of employers with five or more employees — and the count includes part-time workers, corporate officers and LLC members. That threshold is among the highest in the country; most states set the bar at one, two or three. A question about a four-person shop has “not required” as its answer in Alabama where the national reflex says otherwise.

The benefit formula has a rate and a pair of bounds:

• Rate: 66⅔% of the employee’s average weekly earnings at the time of injury (§ 25-5-57(a)(1)).
• Bounds: a maximum of 100% and a minimum of 27½% of the state average weekly wage (§ 25-5-68), recalculated by the Department of Labor and effective each 1 July.

Because those bounds move every July, no dollar figure is worth memorizing — the formula is the answer. A claim must be filed within two years of the accident (§ 25-5-80). Employers comply by insuring with a licensed carrier, qualifying as an individual self-insurer, or joining a group self-insurance fund.

Recordkeeping — three years, and shown to the insured

One licensing rule sits inside the casualty block and is easy to skip. Ala. Code § 27-7-33 requires a producer to keep complete records of transactions under the license for not less than three years — two years for business written under limited lines credit authority — at the place of business. Two duties ride on top: furnish verified copies to the commissioner on request, and exhibit the records to insureds during business hours. That second one, disclosure to the customer rather than the regulator, is the part candidates forget.