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Alabama follows a “fault” system regarding financial responsibility for injuries, vehicle damage and any other losses stemming from a car accident. That means whoever is found at fault is responsible for compensating anyone who suffered harm or damage as a result. Alabama car insurance laws state that drivers must have current insurance and the proof of insurance must be carried on them while driving. To avoid out-of-pocket bills, financial ruin and unnecessary stress, every Alabama driver should obtain the Alabama minimum car insurance.
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
Liability insurance in Alabama
Liability insurance coverage is the only required car insurance in Alabama. As noted above, this coverage is usually split into bodily injury and property damage. The bodily injury coverage pays for injuries and lost wages that are caused to another driver or their passengers. The property damage coverage covers 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.
So minimum liability coverage does not apply to you or your vehicle, and it also may not always be enough to cover your financial responsibilities if you are at fault for an accident. Any injuries or damages that exceed your liability coverage limits in such a case would likely have to be paid out of pocket by you. Upping your coverage limits can help with this second problem, while the addition of other types of coverage can help with the first. Comprehensive and collision car insurance — also known as full coverage when purchased together — is designed to cover your vehicle’s costs. Likewise, adding personal injury protection coverage can help with medical costs to you or your passengers if you are in an accident, even if you are at fault.
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% 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 auto 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 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
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.
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.
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.
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.