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Alabama Car Insurance Regulations & Required Coverage

Alabama insurance laws are quite harsh for drivers who do not maintain minimum car insurance requirements. The state follows a tort system and provides several options to maintain financial responsibility. Staying up to date on current Alabama insurance rules and regulations is important not just to make sure you're following the law but also to keep you and your passengers safe and protected.

The state of Alabama follows a tort system which means that someone will always be found at fault for causing an accident. Once the at fault party is determined, they are then held liable along with their insurer to provide monetary compensation for damages resulting from the accident.

Required Coverage

All personal vehicles in Alabama require the following liability coverage requirements:

  • Bodily Injury
  • Property Damage
Minimum Alabama Car Insurance Requirements
Bodily Injury Liability $25,000 / $50,000 Limit
Property Damage Liability $10,000 Limit

Additional insurance coverage can include:

  • Uninsured / Underinsured Coverage
  • Comprehensive and Collision Coverage

Uninsured or Underinsured coverage helps protect you if you are involved in an accident with someone who does not have insurance or does not have enough coverage to cover all of the damages. This extra coverage will pay for expenses exceeding what is covered by the at fault person's coverage.

Comprehensive coverage is often referred to as non-collision coverage because it covers damages for all non-collision related incidents such as a hurricane or fire. Collision is simply coverage that will help cover repairs and or the replacement of your vehicle after it's been in a collision. Check the list of most stolen vehicles in Alabama to see if you vehicle is on the list. Even if it isn't, having comprehensive coverage should be considered.

Proof of Insurance and Financial Responsibility

Establishing proof of insurance and financial responsibility

  • Get a standard liability car insurance policy
  • Post at least $50,000 to receive a Motor Vehicle Liability Bond
  • Post at least $50,000 to receive a Certificate of Cash Bond

Required Documentation

In order to provide proof of insurance, you can provide one of the following:

  • Insurance ID card
  • The declaration page of your insurance policy
  • Copy of insurance policy, premium receipt or binder
  • Copy of your Motor Vehicle Liability Bond
  • Copy of your Certificate of Cash Bond
  • Copy showing proof of your vehicle purchase and your old insurance card (this is only valid for 60 days after the purchase of a vehicle)
  • Copy of your rental agreement (if the vehicle is being rented)

You must maintain proof of insurance and financial responsibility and present it:

  • When asked by a police officer
  • After an accident
  • When registering a vehicle
  • Anytime you are operating a vehicle

Failure to Maintain Financial Responsibility Penalties

If you are unable to show proof of insurance when asked, you can face the following penalties:

  • First offense - Suspended vehicle registration and reinstatement fee of $100 once you can show proof of insurance
  • Second or subsequent offense - Suspended vehicle registration for 4 months and reinstatement fee of $200 once you can show proof of insurance
  • Additional fines may be applied including a fine up to $500 for a first offense and up to $1,000 for subsequent offenses. Second or subsequent offenses may also result in the suspension of your driver's license for 6 months

Alabama Insurance Agents

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