Alabama State Minimum Car Insurance Law

Failure to maintain liability insurance can result in suspension of registration.

The state of Alabama requires all vehicles that are registered in Alabama or driven on public streets to be covered by liability insurance. Act 2000-554 made Section 32-7A-7, Code of Alabama 1975 effective as of Jan. 1, 2001. The act includes the methods that the state may use to verify liability insurance and the penalties for failure to comply.

Minimum Levels of Coverage

The liability coverage must be a minimum of $25,000 in bodily injury or death benefits for one person injured in an accident, $50,000 in bodily injury or death benefits for two or more people injured in any one accident, and $25,000 in property damage insurance for any one accident.

Acceptable Forms of Coverage

Drivers may purchase an insurance policy from a company licensed to sell automobile liability insurance in the state of Alabama. They may also post a minimum $50,000 cash deposit with the Alabama State Treasurer or obtain a motor vehicle liability bond for at least $50,000.

Acceptable Proof of Insurance

The insurance card, liability policy declarations page, actual policy, a copy of the insurance binder or a receipt for payment of the premium may be acceptable if issued by the insurance company. For a rental car, a copy of the rental agreement with corresponding insurance information will suffice. A vehicle purchased within the last 60 days will be considered as insured if the driver can furnish proof of purchase and documentation of liability insurance on the previous vehicle.

Enforcement

The Alabama Department of Revenue may randomly select registrations and send questionnaires to the owners requesting proof of insurance. Drivers who receive tickets for failure to furnish proof of insurance or those whose driver's licenses have been revoked or suspended may also receive questionnaires. Failure to respond to the questionnaires with the information requested may result in the suspension of the vehicle's registration. If the registration is suspended and it is the first offense, the owner must pay a $100 reinstatement fee and furnish proof of insurance. If another offense occurs, the registration will be suspended for four months and the reinstatement fee will be $200.

References

• Alabama Department of Revenue, Motor Vehicle Division: Mandatory Liability Insurance (MLI) FAQs