Alabama Insurance Requirements for Drivers
Updated: Feb 24, 2020
There are more than 3,800 miles of highways across the state of Alabama and an estimated 3.7 million licensed drivers. Accidents happen every day; some result in serious injury and death. No matter what part of the state you live in, having adequate car insurance is the law and plain commonsense. Insurance protects you as well as the other driver, in case you are involved in an accident. This is a personal guide to the insurance requirements in Alabama.
Alabama State Law
Since 2013, Alabama state law has required every driver to carry mandatory liability insurance to legally drive, register and maintain vehicle registration. Failure to have insurance could result in severe penalties, such as fines or even jail time. You could also be liable for actual damages, which are expenses associated with property damage and medical costs, lost wages and/or earning capacity, and emotional pain and suffering.
The bare minimum insurance requirement is 25/50/25:
$25,000 bodily injury per person per accident
$50,000 bodily injury for all persons per accident
$25,000 property damage liability
Alabama requires every driver to also purchase Uninsured/Underinsured Motorists Bodily Injury Coverage, and the minimum amount for that is $25,000 per person/$50,000 per accident. Uninsured/Underinsured Motorist Bodily Injury is when an uninsured motorist in Alabama causes a car accident and injures you. Your insurance provider will pay for your medical bills under UM/UIMBI. In the event that the negligent driver’s bodily injury limits are lower than yours and unable to cover the full costs of your injuries, this coverage will also reimburse you up to the difference between the two limits.
Collision and Comprehensive
You are not required to carry additional personal liability of Collision and Comprehensive. However, it’s best to protect yourself, especially if you own property and other valuable assets. Physical damage is insurance that pays for replacements or repairs to your car, regardless of fault. It’s what’s known as collision and comprehensive coverage, and it covers most damages from ones incurred in an auto accident to falling tree branch hitting your hood, up to the market value of your insured car. Most insurance providers will ask you to select a deductible amount, which is the out-of-pocket cost you you have to pay before your insurance coverage kicks in for each accident. That amount will affect your premium.
Proof of Insurance
You may be subject to penalty if you don’t abide by the state law’s minimum requirement. Licensed Alabama insurers are required to enter your insurance information into the Online Insurance Verification System. However, in case either the law enforcement officer or Motor Vehicle Division official cannot locate your information, have your insurance ID card with you at all times. A copy of the declarations page of your policy or an insurance binder will suffice as well. If you have one of the alternate proofs of insurance, then you need to present a copy of your certificate as proof.
Without proof of insurance, you could face a six-month suspension of your driver’s license and/or fines up to $1,000 plus a $200 reinstatement fee. Proof of insurance will also be necessary to have your license reinstated.
Counterfeiting proof of insurance is a Class C felony, and you will be subject to a fine of $500 to $5,000 and/or imprisonment from one to ten years.
Liability covers the costs of damage you owe to the other party (and not your own medical care or vehicle repairs. Bodily injury kicks in when you cause an accident that results in the other party’s injuries. Whatever is beyond your insurance, bodily injury coverage limits will still be your responsibility and financial burden, so you may want to purchase higher bodily injury. Limits vary by insurance providers. Property damage kicks in when you cause an accident that results in someone else's property damage. Things that your insurer will pay for you include: the other driver’s car repair and collateral damage to a fellow Alabamian's property or even municipal buildings. Higher limits of property damage are available depending on your insurance provider.
Insurance premiums are regulated by the Alabama Department of Insurance. Insurance companies are allowed to charge premiums and give discounts based on several factors that include:
1. The type of car you are insuring
2. Prior auto insurance coverage
3. How much you drive
4. Your driving record
5. Your age
6. Your gender
7. Your marital status
8. Your geographic location
9. How long you’ve been driving
10. Whether or not you use your car for business
And Alabama law also allows insurance companies to consider your credit history in determining the premiums you pay.
To get the cheapest insurance policy, you can ask your provider about:
· Available discounts for good driving habits
· Anti-theft devices
· Multiple cars on your policy
· Bundling your home and auto
· Automatic payments
· Driving a hybrid or electric car
· Compare price quotes from several insurance providers
· Eliminate coverage you don’t need
Laws change frequently, and it is your responsibility to stay informed about the legal requirements in Alabama.
These laws have been in enacted and may affect your coverage:
· You are responsible for obeying all traffic laws. If you are arrested for violating them and are convicted, you may lose your driver’s license may be suspended or you may lose them permanently, and you will also be subject to additional punishment handed down by the court.
· Your license can be canceled for a number of reasons, which include failure to give required or correct information on your application or committing fraud when making an application.
· You can lose your license if you are convicted of certain offenses regarding Alabama traffic law. However, you may apply for a new license after the revocation period expires.
· If you are convicted of manslaughter or homicide resulting from the operation of a motor vehicle, a second or subsequent conviction for driving while intoxicated, using a motor vehicle during the commission of a felony, failure to stop, render aid or identify
yourself in the event of a motor vehicle accident resulting in death or personal injury of another person, three reckless driving convictions within a 12-month period and unauthorized use of a motor vehicle belonging to another person.
· There is also a ban on cell phone use while driving for beginning drivers, which includes handheld and hands-free. There is a ban on texting for ALL drivers.
State officials can verify liability insurance using the state online insurance verification system, which immediately verifies the insurance status of a vehicle at any time.