Alabama car insurance laws
It’s important for Alabama drivers to understand the basic requirements that are in the state’s car insurance laws. The Cotton State has regulations in place meant to protect you from the financial consequences of an accident, by requiring all drivers to purchase a policy with a minimum amount of liability coverage. You cannot drive legally in the state without this minimum coverage, and if you do and are found to be at fault in an accident, you may have to pay for damages or injuries out-of-pocket. Bankrate’s insurance editorial team took a close look at Alabama car insurance laws to help you understand what is required for drivers in the state.
Car insurance laws in Alabama
Nearly every state requires a certain amount of insurance coverage for all motorists and Alabama car insurance requirements are no different. While there are a number of options when it comes to car insurance in Alabama, the most important thing to know is the mandatory requirements. The Alabama minimum car insurance liability limits are commonly stated as 25/50/25. This shorthand stands for:
- $25,000 bodily injury liability per person
- $50,000 for all bodily injuries to be paid for any one accident
- $25,000 for property damage per accident
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Powered by Coverage.com (NPN: 19966249)
Coverage.com, LLC is a licensed insurance producer (NPN: 19966249). Coverage.com services are only available in states where it is licensed. Coverage.com may not offer insurance coverage in all states or scenarios. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way.
Liability insurance in Alabama
In Alabama, liability insurance, which includes bodily injury and property damage coverage, is the mandatory type of car insurance. Bodily injury coverage helps pay for injuries and lost wages of other drivers or passengers in accidents you cause, while property damage coverage pays for damages to the other driver’s vehicle. It’s crucial to note that this coverage does not extend to your own injuries or vehicle damages.
Additionally, minimum liability coverage might not suffice to cover all financial responsibilities if you’re at fault in a significant accident. To address this, you can increase your coverage limits. For further protection, consider comprehensive and collision insurance — collectively known as full coverage — which covers your vehicle’s costs. Personal injury protection coverage can also be added to help with medical expenses for you and your passengers, regardless of fault in an accident.
Is Alabama a no-fault state?
Alabama is not a no-fault state. This means that the driver who causes the accident uses their insurance to pay for the other driver’s bills from the collision. Police and insurance companies determine fault by utilizing any available evidence. The at-fault driver’s insurance pays to cover the other driver’s damages. The at-fault driver is responsible for any costs exceeding their insurance coverage limits.
Additionally, “fault” can be shared between drivers. It is possible, for example, that one driver could be responsible for 25 percent of the accident while the second driver is 75 percent responsible.
Alabama is one of only five states that has contributory negligence laws, meaning that you can’t sue if you share even 1 percent of the blame for the accident. Only if one driver is 100 percent responsible or “at-fault” can the other party sue.
Penalties for driving without insurance in Alabama
Drivers who choose to forgo insurance while driving are in violation of Alabama auto insurance laws and can face certain consequences or penalties. For the first offense, you may pay a fine of $500 and have a 45-day registration suspension with a $200 reinstatement fee. For the second (or any subsequent) offense, the fine can be up to $1,000 with a four-month registration suspension, a $400 reinstatement fee and up to six months license suspension.
Depending on the severity of the offense(s), further penalties may occur including jail time and a requirement to carry an SR-22 certificate, a document on file with the state proving you have car insurance that meets the minimum coverages required by law. This is also known as a “Certificate of Financial Responsibility.”
Additional auto insurance coverage options in Alabama
Alabama may only require liability coverage; however, there are many additional coverage options to expand your coverage and protection.
- Comprehensive: This coverage protects your vehicle from non-collision occurrences including, but not limited to, theft, hitting an animal and hail damage.
- Collision: This coverage protects your vehicle if you collide with another vehicle or object.
- Loan/Lease payoff: Also known as gap coverage, this is most important for those who are financing a vehicle. If the car is totaled, this coverage covers the difference between your vehicle’s actual cash value and the amount you still owe on the loan.
- Medical payments: MedPay helps with medical expenses accrued by you or those in your vehicle in an accident.
- Rental car reimbursement: If your car is unable to be driven, this covers rental car costs associated with getting a rental until your car is repaired. If your car is drivable, you likely can’t utilize this coverage until your car goes in for repair.
- Roadside assistance: This helps with battery jumps, towing expenses and flat tire expenses. This coverage can vary by the insurance company so make sure to double-check.
- Uninsured motorist bodily injury: Uninsured motorist coverage is highly recommended as it covers bodily injury expenses if you are injured by a driver who has no insurance and can’t pay for your damages.
Frequently asked questions
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Identifying the best car insurance company in Alabama is a personalized process, as the ideal choice varies based on individual factors. While thorough research can suggest top companies, the most suitable option for you depends on your specific needs and circumstances. Factors like your driving history, vehicle type, coverage needs and budget play a significant role in determining which company aligns best with your requirements. Additionally, considering customer service reputation, claim processing efficiency and available discounts can also influence your decision. To find an affordable policy that meets your unique needs, experts suggest comparing quotes and offerings from multiple insurers in Alabama.
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The average cost of car insurance in Alabama is $514 for state-mandated minimum coverage, while full coverage, which includes optional collision and comprehensive coverage, is available for an average cost of $2,116. This is below the national averages, which are $644 for minimum and $2,314 for full coverage insurance. Maintaining a clean driving record and solid credit history are two ways to keep your premium rate low. You may also want to ask for quotes from a few of the companies that, according to Bankrate’s research, generally offer low-cost insurance to drivers in Alabama.
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According to Alabama codes, a total loss occurs when the damage to a vehicle is equal to or greater than 75 percent of the value of the vehicle. So, for example, if your car has a value of $8,000, but it sustains damage that would cost more than $6,000 to repair it to its pre-accident condition, it would be considered totaled.
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Several variables go into determining your auto insurance rates in Alabama. These factors include, but are not necessarily limited to, your age, driving record, gender, marital status, ZIP code, vehicle type, insurance history and credit history. In general, insurance companies try to utilize every variable they can that serves as a good predictor of how likely a driver is to have an incident or file a claim. Some states prohibit the use of gender, age or credit , but these variables are permitted in Alabama.
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