Basic automobile insurance coverage is pretty much the same in all US states. The type and amount of minimum liability coverage required is what makes the difference per state. In Alabama, each car owner is required to have minimum liability coverage of $25,000 for bodily injury for every person, $50,000 for multiple bodily injuries and $25,000 for damages of public or private property. Minimum liability coverage represents the highest amount of money that your insurer will cover for medical and property damages per accident. While the minimum liability offers low coverage, you may want to consider getting additional policies to increase your protection.
It is possible to ensure your financial responsibility through other means in Alabama. An alternative to having car insurance is buying a Motor Vehicle Liability Bond or a Certificate of Cash Bond in the minimum amount of $50,000.
Auto insurance in Alabama consists primarily of six areas of liability:
1. Bodily Injury
2. Property Damage
3. Personal Injury Protection
4. Collision Coverage
5. Comprehensive Coverage
6. Uninsured / Underinsured Motorist Coverage
Bodily Injury liability covers medical expenses and loss of income for the innocent party. Bodily Injury does not cover your medical bills. That is where Personal Injury Protection (PIP) comes in. PIP coverage covers your medical bills as well as any family members inside your car during an accident. Property Damage covers the expenses for the repair or replacement of property that was damaged because of an accident where you were the guilty party.
If you drive a financed car and are still paying for it, your lender will require you to have collision insurance on the car to pay for its collateral. Preventing this insurance to lapse will cause a lender to add the appropriate level of coverage to your monthly payment. The rates may not be the same as what the rates with your own insurance provider.
Comprehensive coverage is designed to cover for the value of damages caused by non auto-related accidents such as damage from floods or fire, extreme weather conditions such as hail or snow, or other factors such as theft or vandalism.
Both Uninsured and Underinsured Motorist coverage is not required in Alabama, but it would not hurt to be familiar with these types of liability coverage. Uninsured Motorist coverage will cover your expenses if your car is hit by someone without an insurance coverage, while Underinsured Motorist coverage will protect you if you were hit by someone who did not have sufficient coverage to pay for damages.
If you are not sure of which policy you should choose, talk to a car insurance agent so he or she can guide you in choosing the most appropriate policy.