Auto Insurance Requirements in Alabama
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The Alabama Mandatory Liability Insurance (MLI) Law mandates that every Alabama motorist carry liability auto insurance in the amounts of 25/50/25 to legally drive, as well as register a car in the state — and maintain vehicle registration.
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Licensed Alabama insurers are required to enter insurance information into the Online Insurance Verification System (OIVS). However, in case a law enforcement officer or Alabama Department of Revenue (DOR) Motor Vehicle Division official cannot locate your information when you're pulled over or involved in an accident, you should have your insurance card with you at all times. A copy of the declarations page of your policy or an insurance binder will suffice as well. If you have one of the alternative proofs of insurance, then you'll need to present a copy of your certificate as proof.
Alabama required car insurance coverage
Required Min. Limits | |
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Bodily injury (BI) | $25,000 per person/$50,000 per accident |
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Property damage (PD) | $25,000 per accident |
Alabama car insurance minimum requirements
A policy that satisfies the MLI law will include bodily injury and property damage, which together are called liability insurance. Liability covers the costs you owe the other party for their damages (and not your own medical care or vehicle repairs). In Alabama, you will need to purchase coverage in at least the following amounts:
Bodily injury (BI): Minimum coverage of $25,000 per person and a total of $50,000 per accident (when there is more than one person injured) is required. BI kicks in when you cause an accident that results in injuries to the other party'. Whatever is beyond your BI insurance coverage limits will still be your responsibility and financial burden, so you may want to purchase higher BI. Limits vary by insurer in Alabama.
Property damage (PD): The minimum is $25,000 per accident for PD, which kicks in when you cause an accident that results in damage to someone else's property. Your insurer will cover damages such as the other driver's car repairs or collateral damage to someone's property — or even municipal buildings. Higher limits of PD are available in AL and vary by insurer.
Cheapest companies in Alabama for minimum liability
Optional coverage in Alabama
Insurance agents and other experts in the state will tell you that the minimum MLI coverage rarely provides enough to protect you. For example, if you run into a driver who does not have proper insurance (and who caused the accident), you will be left with no one to cover your medical bills and car repairs. Here are a couple of optional types of insurance coverage in Alabama that you may want to include in your policy:
Uninsured/underinsured motorist bodily injury (UM/UIMBI): When an uninsured motorist in Alabama causes a car accident and injures you, your insurer will step in to pay for your medical bills under UM/UIMBI. In the event that the negligent driver has insurance, but their BI limits are unable to cover the full costs of your injuries and are lower than your UM/UIMBI limits, this coverage will also kick in to reimburse you, up to the difference between the two amounts. In Alabama, UM/UIMBI coverage limits start at 25/50, but note that it can never be higher than your BI.
Physical damage: This is the insurance that pays for repairs to or a replacement for your car, regardless of fault. It comprises collision and comprehensive coverage and covers most damages incurred in an auto accident, up to the market value of your insured car. Most AL insurers will ask you to select a deductible amount — the out-of-pocket cost you'll need to bear before your insurance coverage kicks in — and the amount you choose will directly influence your premium.
Alternative proof of financial responsibility
Apart from a liability policy, the Alabama Department of Public Safety will also accept a certificate of compliance issued by the DOR. Specifically, you need to fulfill one of the following requirements to earn your certificate:
Liability bond: The DOR will grant a Motor Vehicle Liability Bond certificate if you apply for a bond issued by a licensed surety company. This bond is only valid if it is made payable for $75,000 — the amount an Alabama insurer would typically provide under a minimum liability policy. This is a bond of promise that indicates the surety company will pay in your place in case you fail to do so for damages you cause in an accident. (You will then need to repay the surety company.)
Cash deposit: In this case, the DOR will grant you a cash bond certificate if you deposit $75,000 in cash with the state treasurer's office. At the same time, you must also complete an Application for Cash Bond Certificate form and send it to the DOR, after which you should get your certificate. For any damage you cause in an accident, the payments you owe to the other party will come out of this deposit.
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