Out-of-State Insurer’s Nationwide Uninsured-Motorist Coverage Does Not Confer Alabama Jurisdiction

Introduction

The Supreme Court of Alabama’s decision in Ex parte Kentucky Farm Bureau Mutual Insurance Company (In re: Henderson v. Kentucky Farm Bureau Mutual Insurance Company, 2025) addresses whether an out-of-state insurer that issues an insurance policy providing nationwide uninsured-motorist (UM) coverage subjects itself to personal jurisdiction in Alabama for a contract claim. Rebecca Henderson, a Kentucky resident injured in Alabama by an uninsured motorist, sued her insurer, Kentucky Farm Bureau, in Baldwin County Circuit Court for breach of contract—specifically UM benefits—after concededly obtaining and holding a policy issued in and delivered from Kentucky. Kentucky Farm Bureau petitioned this Court for a writ of mandamus, arguing that it lacked “continuous and systematic” contacts with Alabama and thus could not be haled into an Alabama court for Henderson’s contract claim.

Summary of the Judgment

The Supreme Court of Alabama granted the insurer’s petition and issued a writ of mandamus directing the trial court to dismiss Henderson’s contract claim for want of personal jurisdiction. Relying on established precedent—most notably Ex parte Georgia Farm Bureau Mutual Automobile Insurance Co. (889 So. 2d 545 (Ala. 2004))—the Court held that simply providing UM coverage throughout the United States does not establish the “minimum contacts” or “purposeful availment” required by the Due Process Clause when the insurer has no other contacts with the forum state. Henderson’s affidavit that her policy extended coverage in all fifty states did not overcome Kentucky Farm Bureau's prima facie showing of no Alabama contacts under Rule 12(b)(2), Ala. R. Civ. P.

Analysis

Precedents Cited

• Ex parte Georgia Farm Bureau Mutual Automobile Insurance Co. (889 So. 2d 545 (Ala. 2004)): Established that an insurer’s agents and marketing in border counties do not constitute purposeful direction at the forum, nor do website access or television broadcasts without direct solicitation of business in the forum.
• Ex parte Starr (Ala. 2024): Reaffirmed that Alabama personal jurisdiction extends only to the limits of due process and requires “some minimum contacts” that are “purposefully directed” at the forum state.
• Burger King Corp. v. Rudzewicz (471 U.S. 462 (1985)): Fundamental U.S. Supreme Court precedent setting out the purposeful-availment requirement to satisfy due process.
• Helicopteros Nacionales de Colombia, S.A. v. Hall (466 U.S. 408 (1984)): Defined general jurisdiction requiring “continuous and systematic” contacts.
• Mercantile Capital, LP v. Federal Transtel, Inc. (193 F. Supp. 2d 1243 (N.D. Ala. 2002)): Clarified the burden-shifting framework on a personal-jurisdiction challenge under Rule 12(b)(2).

These authorities influenced the Court’s holding that Henderson’s reliance on broad coverage to infer contacts with Alabama amounted to third-party or unilateral acts (her travel and collision) rather than insurer conduct purposefully directed at Alabama.

Legal Reasoning

The Court applied the two-step analysis for personal jurisdiction:

1. Due process permits jurisdiction only if the defendant has minimum contacts with the forum.
2. Contacts must reflect either general jurisdiction (continuous and systematic business) or specific jurisdiction (contacts arising from the cause of action and purposefully directed at the forum).

Kentucky Farm Bureau made a prima facie showing—via affidavit—that it is incorporated and operates solely in Kentucky, issues no policies in Alabama, has no agents, does not solicit in Alabama, and has no systematic contacts there. Henderson then bore the burden to produce evidence of insurer-directed contacts sufficient to confer jurisdiction. Her affidavit simply asserted that the policy “covers … in all 50 states,” which the Court treated as insufficient. It reiterated that an insurer’s agreement to defend an insured nationwide in tort does not equate to consenting to a contract suit in every jurisdiction where coverage might apply. The Court thus concluded that Alabama courts lack jurisdiction over Kentucky Farm Bureau regarding the contract claim.

Impact

This decision clarifies and strengthens limits on Alabama’s personal jurisdiction over out-of-state insurers in contract claims:

• Insurers issuing policies in another state cannot be sued in Alabama on those policies absent other insurer-directed contacts.
• Policyholders must evaluate personal-jurisdiction considerations when joining insurers in out-of-state courts; alternative remedies include separate suits in the state of issuance.
• Courts will continue distinguishing between tort-defense obligations (liability coverage) and contractual breach claims in jurisdictional analyses.
• Insurers may consider clarifying forum-selection clauses or consent-to-suit provisions in their policies to manage jurisdictional risks.

Complex Concepts Simplified

• Personal Jurisdiction: A court’s power over a defendant. Requires that the defendant’s own actions create sufficient connections to the forum state.
• Minimum Contacts: The defendant must have certain quality or nature of contacts with the forum so that maintaining the suit does not offend “traditional notions of fair play and substantial justice.”
• General vs. Specific Jurisdiction:
  • General: Defendant’s continuous and systematic business in the forum (e.g., headquarters, substantial operations).
  • Specific: Defendant’s actions giving rise to the claim occur in or are directed at the forum.
• Purposeful Availment: The defendant must have purposefully acted to invoke benefits and protection of the forum’s laws, thereby anticipating being haled into court there.

Conclusion

The Supreme Court of Alabama’s ruling in Ex parte Kentucky Farm Bureau reaffirms that an insurer’s issuance of a policy providing nationwide UM coverage does not, by itself, impose personal jurisdiction in a forum where the insurer has no other contacts. Policyholders seeking UM benefits must either join their insurer where the policy was issued or accept that an Alabama court lacks authority over an out-of-state insurer on a contract claim absent purposeful insurer conduct in Alabama. This decision tightens jurisdictional boundaries in insurance disputes, preserving due-process protections for out-of-state defendants.