If you call the state of Alabama home and plan on driving there, the Alabama auto insurance requirements state that drivers must have current insurance and the proof of insurance must be carried on them while driving.
No one ever expects to be in an accident, but that’s why they are called accidents. Being prepared for one is the best way to protect you, your family and your assets. If you have no insurance, you can expect legal penalties, not to mention financial risks.
Alabama follows a “fault” system in terms of financial responsibility for injuries, vehicle damage and any other losses stemming from a car accident. This means whoever is found at fault is responsible for compensating anyone who suffered harm as a result.
To avoid out-of-pocket bills, financial ruin and unnecessary stress, every Alabama driver should obtain the Alabama minimum car insurance. In addition, you should increase those limits as much as you can reasonably afford and adding on some of the additional coverages as needed.
Car insurance laws in Alabama
Nearly every state requires a certain amount of insurance coverage for all motorists and Alabama is 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 limit per person
- $50,000 maximum for all bodily injuries to be paid for any one accident
- $25,000 maximum for property damage per accident
Liability insurance in Alabama
Liability insurance coverage is the only required car insurance in Alabama. This coverage is usually split into bodily injury and property damage coverages, as noted above. The bodily injury coverage pays for injuries and lost wages that are caused to another driver or their passengers. The property damage coverage takes care of damage you cause to the other driver’s vehicle.
Liability coverage never pays for your injuries (or your passengers’ injuries) or damages to your vehicle. This would require additional coverage.
Carrying only liability coverage is highly and commonly not recommended as this leaves you and your assets at risk. While Alabama’s liability limits are higher than some states, this still can equate to inadequate coverage for the other party and leaves you not covered at all. The Alabama minimum car insurance requirements also can still leave you at risk financially.
Medical expenses can stack up quickly especially with multiple passengers. As far as property damage goes, $25,000 doesn’t cover the average price of a new vehicle and this doesn’t even take into account if there are multiple cars involved and you are found at fault.
It’s highly recommended that all drivers increase their insurance limits in order to avoid being stuck with massive bills out of pocket or from being sued by the other party. According to the Insurance Information Institute (III), 78 percent of insured drivers purchase comprehensive coverage in addition to liability insurance, and 74 percent buy collision coverage.
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.
Additionally, “fault” can be shared between drivers. It is possible, for example, that one driver could be responsible for 25% of the accident while the second driver is 75% responsible.
Alabama is one of only five states that has contributory negligence laws meaning that you can’t sue if you share even 1% of the blame for the accident. Only if one driver is 100% 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 insurance laws and can face certain consequences or penalties. For the first offense, the fine is $500 and a 45-day registration suspension with a $200 reinstatement fee. For the second (or any subsequent) offense, the fine is $1,000 and a 4-month registration suspension with 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, 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 driveable, 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
What is the best car insurance company in Alabama?
Shopping around is the best way to find an affordable policy that fits your particular needs. According to our thorough research, these are the best car insurance companies in Alabama.
What is the cheapest car insurance in Alabama?
Alabama isn’t the cheapest or the most expensive state for car insurance. Despite it falling somewhere in the middle, it’s likely you still want to get the best bang for your buck. The average cost of car insurance in Alabama is $435 for minimum coverage and $1,672 for full coverage. According to our research, these are the cheapest car insurance companies in Alabama.
When is a vehicle considered a total loss?
According to Alabama codes, a total loss occurs when the damage to a vehicle is equal to or greater than 75% of the value of the vehicle.
What factors into your auto insurance rate in Alabama?
Regardless of location, car insurance companies typically look at factors such as your vehicle model, driving record and past insurance claims. In Alabama, the following can also factor in: age, credit score, education and occupation, gender, marital status and zip code.