Alabama Auto Insurance: Understanding The Mandatory Coverage

Alabama has a high rate of uninsured motorists. To address this, the Alabama Mandatory Liability Insurance Act (MLI) requires that all drivers have liability insurance. This means that if you plan on driving in Alabama, you must carry proof of insurance, which must be shown to law enforcement officials when requested. The minimum liability coverage in Alabama is 25/50/25, meaning $25,000 bodily injury per person, $50,000 bodily injury per accident, and $25,000 property damage per accident.

Alabama's Mandatory Liability Insurance Law

The minimum liability coverage, often referred to as 25/50/25, includes:

• $25,000 bodily injury per person
• $50,000 bodily injury per accident
• $25,000 property damage per accident

Bodily injury coverage pays for injuries and lost wages caused to another driver or their passengers, while property damage coverage takes care of damage caused to the other driver's vehicle or someone else's property. It is important to note that liability insurance does not cover your injuries or damages to your car.

In Alabama, liability coverage is the only legally required car insurance. However, additional coverage options are available, such as comprehensive, collision, and uninsured motorist coverage. These optional coverages can provide further protection and peace of mind.

Drivers in Alabama must also carry proof of insurance while driving and present it to law enforcement officials when requested. Failure to provide proof of insurance can result in penalties, including fines, driver's license suspension, and vehicle registration suspension.

The Mandatory Liability Insurance Law ensures that drivers can financially cover at least some of the damages they may cause in an accident. It is essential for drivers in Alabama to understand their insurance requirements and options to comply with the law and protect themselves financially.

Minimum liability coverage

Alabama's Mandatory Liability Insurance Law requires drivers to carry a minimum amount of liability insurance to legally drive and register a car in the state. The minimum liability coverage in Alabama is 25/50/25, meaning:

• $25,000 for bodily injury per person
• $50,000 for bodily injury per accident
• $25,000 for property damage per accident

Bodily injury coverage pays for injuries and lost wages that you cause to another driver or their passengers, while property damage coverage takes care of the damage you cause to the other driver's vehicle. It's important to note that liability insurance never pays for your injuries or damages to your car. If you want coverage for yourself and your vehicle, you'll need to add additional coverage to your policy.

While Alabama only requires liability coverage, there are several other types of optional coverage that you can add to your policy to expand your insurance coverage and gain more protection. These include comprehensive coverage, collision coverage, loan/lease payoff coverage, medical payments coverage, rental car reimbursement, and roadside assistance.

It's recommended that drivers increase their liability coverage limits and add physical coverage to protect their vehicles. The state's minimum coverage may not be enough to cover all expenses in the event of an accident, leaving you financially vulnerable.

Proof of insurance

In Alabama, drivers must carry proof of insurance and be able to present it to law enforcement officials when requested. This can be in paper or electronic form. The most common evidence of current insurance is the insurance card, but electronic proof is also acceptable. To be acceptable, the proof of insurance must display the current effective date, insurer’s NAIC number, vehicle identification number (VIN), and policy number.

The Alabama Mandatory Liability Insurance (MLI) Law mandates that every Alabama motorist must carry liability auto insurance in the amounts of 25/50/25 to legally drive, as well as register a car in the state and maintain vehicle registration. This means that drivers must have:

• $25,000 of coverage for bodily injury to, or the death of, one person injured or killed in an accident
• $50,000 of coverage for bodily injuries to, or the deaths of, two or more people injured or killed in an accident
• $25,000 of coverage for property damage in an accident

Licensed Alabama insurers are required to enter insurance information into the Online Insurance Verification System (OIVS). However, if a law enforcement officer or Alabama Department of Revenue (DOR) Motor Vehicle Division official cannot locate your information, you should have your insurance card with you at all times. A copy of the declarations page of your policy or an insurance binder will also suffice.

If you are unable to provide proof of insurance, you may face penalties. Driving without insurance in Alabama is a Class C misdemeanour. The penalty for a first offence is up to three months in jail and a fine of up to $500. For second and subsequent offences, in addition to a fine and jail time, your driver's license can be suspended for up to six months.

Penalties for driving without insurance

Driving without insurance in Alabama can have serious repercussions. Individuals who are caught without a valid car insurance policy can receive a range of punishments, including fines, license suspension, and even jail time. Here are the penalties for driving without insurance in Alabama:

First Offense

For a first-time offender, the fine can be up to $500. Penalties may also include imprisonment of up to 3 months, a 45-day registration suspension, and a $200 registration reinstatement fee. To get your license back, you may need to provide proof of insurance for 1 year after reinstatement.

Repeat Offenses

For repeat offenders, the penalties can be more severe. Fines can increase to up to $1,000, and imprisonment can be up to 6 months. Repeat offenders may also face a license suspension of 6 months and a registration suspension of 4 months. The registration reinstatement fee increases to $400, and proof of insurance must be provided for 3 years after reinstatement.

Driving Without Insurance Verification

Alabama utilizes the Alabama Online Insurance Verification System (OIVSA) to monitor drivers' car insurance coverage. If the DMV cannot verify your coverage, they will send you a verification notice that can be completed online or in person. This means you can receive a ticket for no insurance without even being pulled over.

Accident While Uninsured

If you are in an accident while driving without insurance in Alabama, you will face additional penalties, even if you are not at fault. If you are found to be at fault, you will be responsible for all damages, including medical costs and vehicle repairs for the other parties involved. This can result in significant out-of-pocket expenses.

False Insurance Information

Providing false insurance information is a more serious offense and can result in a six-month suspension of your registration, a $200 reinstatement fee, and the requirement to carry an SR-22 for three years. Altering an insurance card to present false information is a felony and can result in fines of $500 to $5,000 and one to ten years in prison.

Optional car insurance coverage

Alabama law only requires liability coverage for drivers to be legal on the road. However, there are several other types of coverage that drivers can add to their insurance plans for more protection. Here are some optional car insurance coverage types to consider in Alabama:

Comprehensive Coverage

This type of coverage protects your vehicle from non-collision perils, such as theft, weather damage, or even hitting an animal. Comprehensive coverage is ideal for those who want to safeguard their investment in their vehicle, especially if it is valuable or new.

Collision Coverage

If you collide with another vehicle or object, collision coverage will cover the damages to your vehicle. This is an optional addition for vehicle owners in Alabama seeking extra protection beyond the required liability insurance. Even if you own your car outright, adding collision coverage can help pay for repairs or replacement if your vehicle is damaged, vandalized, or stolen.

Loan/Lease Payoff Coverage

Also known as gap coverage, loan/lease payoff coverage is helpful for those financing a vehicle that has been totaled. It covers the difference between the vehicle's actual cash value and the amount still owed on the loan. This type of coverage can be beneficial in ensuring you don't end up owing more than the car is worth if it is totaled or stolen.

Medical Payments Coverage

Medical payments coverage, or med pay, helps with medical expenses accrued by you or your passengers in an accident, regardless of who is at fault. This can be especially useful in Alabama, a fault-based auto insurance state, where the driver who causes the accident is legally responsible for all resulting damages.

Rental Car Reimbursement

If your car is unable to be driven due to an accident or repairs, rental car reimbursement coverage can help cover the costs of renting a vehicle until your car is fixed. This ensures that you don't have to incur additional expenses while your car is being repaired.

Roadside Assistance

Roadside assistance coverage typically helps with battery jumps, towing expenses, and flat tire fixes. The specific types of coverage provided may vary depending on the company and your plan. Roadside assistance can provide peace of mind and help you in unexpected situations while on the road.

Uninsured Motorist Bodily Injury Coverage

Unfortunately, there are still motorists who drive without insurance. Uninsured motorist bodily injury coverage helps protect you in the event of an accident with an uninsured driver. It covers your bodily injury expenses if you are injured by a driver who does not have insurance and cannot pay for your damages.

Frequently asked questions