A recent Alabama Supreme Court decision has delivered a powerful reminder to Alabama drivers about the critical importance of understanding the fine print in their insurance policies, particularly when those policies cross state lines.
The June 20, 2025, ruling in favor of State Farm Mutual Automobile Insurance Company illustrates how contractual language can supersede expectations and leave injured parties without the coverage they believed they had.
The Case That Changed Everything
At the heart of this legal battle was Eric Jackson, a commercial tractor-trailer driver from Kentucky who suffered injuries in a devastating crash with another tractor-trailer in Morgan County, Alabama, in December 2020.
What seemed like a straightforward underinsured motorist (UIM) claim quickly became a complex legal dispute that would ultimately reach Alabama’s highest court.
Jackson held personal auto insurance with State Farm, but there was a crucial detail that would prove to be his undoing: although the accident occurred in Alabama, his policies were issued in Kentucky and delivered to his Kentucky address.
This seemingly minor administrative detail would have major legal consequences.
The Devil in the Details
The State Farm policies included UIM coverage, which should have protected Jackson when the at-fault driver’s insurance proved insufficient.
However, buried within the policy language was a provision that would prove devastating to Jackson’s case: claims for bodily injury under UIM coverage had to be filed within the timeframe set by Kentucky law—specifically, a two-year limitation period established under the Kentucky Motor Vehicle Reparations Act.
Even more critically, another provision in the policies stated that “without regard to choice of law rules,” Kentucky law would govern any legal action under the policy. This choice-of-law clause would become the linchpin of State Farm’s defense.
A Costly Delay
Jackson initially focused his legal efforts on pursuing the at-fault driver, filing suit in Alabama in 2022. However, he waited nearly three years before attempting to bring State Farm into the litigation.
By October 2023, when he amended his complaint to add State Farm and pursue his UIM claim, he was well past Kentucky’s two-year statute of limitations.
This delay would prove fatal to his case.
The Legal Battle Unfolds
When State Farm denied the claim, pointing to the policy’s language and the governing Kentucky statute, Jackson mounted a vigorous defense.
He argued that since he filed the suit in Alabama, the state’s six-year statute of limitations for contract claims should apply instead.
Jackson’s legal team cited Alabama’s general policy of applying its own procedural rules to lawsuits filed within the state and claimed the contractual two-year limit was void under Alabama law. It was a reasonable argument that might have succeeded in different circumstances.
Supreme Court Delivers Decisive Ruling
But the Alabama Supreme Court saw the matter differently. In a unanimous decision that sent shockwaves through the legal community, the justices ruled that Jackson was bound by the contract he entered into in Kentucky. T
he court found that the policy language was not vague—it clearly incorporated Kentucky’s two-year statute for personal injury claims, and the choice-of-law provision made it enforceable.
“This case involves Kentucky parties who negotiated, in Kentucky, contracts… to which the parties agreed that Kentucky law – including a specific statute of limitations applicable in that state – would apply,” the court wrote in its decision.
The court emphasized that this wasn’t a case of trying to circumvent Alabama’s public policy. Instead, it was a matter of respecting a contractual agreement made in another state and applying it as written.
What This Means for Alabama Drivers
This ruling has profound implications for Alabama residents who hold insurance policies issued in other states, as well as out-of-state drivers who travel through Alabama. The decision demonstrates that:
- Contract language matters: Insurance policies are legal contracts, and courts will enforce them as written, even when the results seem harsh.
- State lines don’t protect you: Being injured in Alabama doesn’t automatically mean Alabama law will apply to your insurance claim.
- Time limits are strictly enforced: Missing statutory deadlines can completely bar your claim, regardless of the merits of your case.
- Choice-of-law provisions have teeth: When you agree to let another state’s laws govern your policy, courts will honor that agreement.
The Broader Impact
For insurance professionals, this case serves as a poignant reminder of the power of well-drafted policy language and the importance of clear jurisdictional boundaries. It highlights how a properly written choice-of-law clause can withstand scrutiny even when a claim crosses state lines.
The ruling also highlights a critical gap in consumer understanding of insurance policies. Many policyholders assume that being injured in Alabama means they can rely on Alabama’s more generous statutes of limitations and procedural rules. This case proves that assumptions can be dangerously wrong.
Protecting Your Rights
The Jackson case demonstrates why it’s essential for Alabama drivers to:
- Carefully review policy language before purchasing insurance.
- Understand which state’s laws govern your policy.
- Act quickly when injuries occur, regardless of where you think you should file.
- Seek legal counsel immediately after any serious accident.
In Jackson’s case, a potential UIM payout never reached the negotiating table simply because the clock ran out.
This harsh reality underscores the importance of understanding your insurance coverage and taking swift action to protect your rights.
Facing Insurance Disputes or Personal Injury Claims in Alabama?
Don’t let complex insurance policy language or confusing state law issues jeopardize your right to compensation. The experienced attorneys at Baxley Maniscalco understand the intricate details of insurance law and cross-jurisdictional issues that can make or break your case.
Our dedicated legal team has decades of combined experience fighting insurance companies and protecting Alabama families from unfair claim denials. We know how to navigate complex policy language, statute of limitations issues, and choice-of-law provisions to ensure our clients get the coverage they paid for.
If you’ve been injured in an accident and are facing insurance disputes or UIM claims, don’t wait—time limits can be shorter than you think.
Contact Baxley Maniscalco today at (256) 770-7232 for a confidential consultation, or schedule your appointment online. We’re here to fight for your rights and ensure you get the compensation you deserve.
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