The basics on Alabama’s Mandatory Insurance Laws
Get the details on what drivers need to do to comply with the Alabama Mandatory Liability Insurance law, plus other basics on auto insurance in Alabama.
Like most states, Alabama has legislation requiring vehicle owners to carry certain minimum amounts of liability car insurance, in the event that they cause a traffic accident on the state’s roads and highways. In this article, we’ll explain what the Alabama “Mandatory Liability Insurance” law requires, and we’ll touch on other key details related to auto insurance in Alabama.
Alabama is a “Fault” Car Accident State
Alabama follows a “fault” system when it comes to financial responsibility for injuries, vehicle damage, and other losses stemming from a car accident. This means that the person who was at fault for causing the car accident is responsible for compensating anyone who suffered harm as a result (although from a practical standpoint it’s typically the at-fault driver’s insurance carrier that will cover these losses, up to policy limits).
In Alabama, a person who suffers any kind of injury or damage due to an auto accident usually can proceed in one of three ways:
- by filing a claim with his or her own insurance company, assuming that the loss is covered under the policy (in this situation, the insurance company will likely turn around and pursue a subrogation claim against the at-fault driver’s insurance company)
- by filing a third-party claim directly with the at-fault driver’s insurance carrier, or
- by filing a personal injury lawsuit in civil court against the at-fault driver.
Note: In no-fault car insurance states, claimants don’t have this same range of options. If you’re injured in a car accident in a no-fault state, you must turn to the personal injury protection coverage of your own car insurance policy for the payment of medical bills and other out-of-pocket losses, regardless of who caused the accident. Only if your claim reaches certain statutory thresholds can you step outside of no-fault and make a claim directly against the at-fault driver. But Alabama drivers don’t need to worry about no-fault for an in-state accident.
The Alabama Mandatory Liability Insurance Law
In Alabama, the state’s Mandatory Liability Insurance law requires vehicle owners to have the following minimum amounts of liability car insurance coverage:
- $25,000 for bodily injury liability per person injured in an accident you cause
- $50,000 for total bodily injury liability when two or more people are injured in an accident you cause, and
- $25,000 for property damage per accident you cause.
This basic coverage pays the medical bills, property damage bills, and other costs of drivers, passengers, and pedestrians who are injured or have their vehicle damaged in a car accident you cause, up to coverage limits. You can (and in some situations should) carry more coverage to protect you in case a serious crash results in significant car accident injuries and vehicle damage. Remember, once policy limits are exhausted, you are personally on the financial hook, so higher insurance limits can help protect your personal assets in the event of a serious crash.
Your liability coverage will kick in if any family member is driving your vehicle, or if you’ve given someone else permission to use it. It will likely also cover you if you get into an accident in a rental car.
You’ll need to provide evidence of insurance to any license plate-issuing official or law enforcement officer who requests it.
Finally, remember that the liability coverage we discussed here doesn’t apply to your own injuries or vehicle damage after a car accident. You’ll need different (additional) coverage for that if you’re involved in a car accident and no one else’s coverage applies to your losses. For example, personal injury protection (PIP) or MedPay coverage can be used to pay your car accident medical bills, and collision coverage can pay for repairs to (or replacement of) your damaged vehicle after a car accident.
Penalties for Driving Without Car Insurance in Alabama
If you violate Alabama’s Mandatory Liability Insurance law, you could face a fine of at least $500 for a first offense. A second (and subsequent) violation can result in a $1,000 fine and/or the suspension of your driver’s license for six months. Note that these penalties will likely pale in comparison to the financial hit you could take if you’re in a car accident and you don’t have car insurance.