Rules of Alabama Car Insurance

Just like the other 50 states in the United States, Alabama has very definite regulations regarding auto insurance. Complying with each of these insurance laws is a very important part of operating your vehicle within the state of Alabama.

What Alabama Law Requires

Since May 15, 2000, all vehicles are required to be covered by liability insurance. Without insurance, you will not be able to operate or register a vehicle in the state of Alabama. The following are the minimum liability insurance amounts required by Alabama law:

  • $25,000 coverage for bodily injury/death for one person in an accident
  • $50,000 coverage for all injuries/deaths in an accident
  • $25,000 coverage for property damage in an accident

Alabama law also requires that you carry proof of insurance in your vehicle at all times. Proof of insurance can be shown with an Alabama insurance card, a temporary insurance card given by an insurer, a premium receipt or insurance binder, a current declarations page of a liability insurance policy, the actual issued liability insurance policy, proof of purchase within the previous 60 days, a valid insurance card or a copy of the rental agreement. Warning and or tickets will be given to those without proof of insurance, leading to a ticket fee and a reinstatement fee of $100.

Taking Advantages of Discounts

In Alabama you have the opportunity of taking advantage of multiple discounts on your car insurance. For instance, if you have more than one car listed under the same insurance policy you are eligible for a discount. Alabama insurance also offers drivers discounts for cars with anti-lock breaks as well as for cars with driver, passenger or side air bags. Other discounts for Alabama drivers include anti-theft devices, good driving records and good school grades.

Alternatives to Liability Insurance Requirements

Instead of purchasing the required liability insurance, Alabama state laws offers the following two options: motor vehicle liability bond and deposit of cash. The bond must be no less than $50,000 and must be filed with the Department of Revenue, Motor Vehicle Division. The bond will cover any costs arising from injury, death or damage due to an accident in which you are held responsible. The deposit of cash is also no less than $50,000 and must be deposited with the State Treasurer. For both the bond and the cash deposit, proof must always be carried in the car.