The state of Alabama is intersected by major Interstate Highways like I-65 and I-59 that are frequently traversed by residents of the Southern States. Due to the fact that this state is considered as the “crossroads” of the Southern States, Alabama lawmakers and insurance providers have created stricter auto insurance laws in recent years. State laws require all car owners to have sufficient insurance coverage. A better understanding of Alabama auto insurance basics can keep you free of worries and legal hassles.
Alabama auto insurance laws require each car owner to have a minimum liability coverage of $25,000 for bodily injury per person, $50,000 for multiple bodily injuries and $25,000 for public or private property damage. This is locally known as the 25/50/25 policy. Minimum liability requirements in Alabama are similar to the ones in neighboring states, Georgia and Mississippi, creating uniformity in all three Southern States.
The consequences can be pretty severe in Alabama for drivers who fail to show proof of insurance or a car liability bond. The state conducts randomized surveys of drivers to monitor if every registered driver complies with state auto insurance laws. If you fail to provide proof of coverage, your motorist's registration will be suspended until you get your vehicle insured and pay an additional $100 registration fee. A second offense will get your driver’s license suspended for four months plus you have to pay an additional $200 registration fee.
Requirements for proof of insurance in Alabama are very liberal to make sure that drivers can drive on state roads. If you do not have an auto insurance card with you, an official receipt from a paid policy provider is acceptable. Alabama’s Motor Vehicle Division also accepts your actual auto insurance policy or its declarations page as proof of your liability coverage. For newly purchased cars, you can carry your new car’s receipt as well as your previous insurance card to avoid registration suspension. This is valid for up to two months. For Alabama residents and out-of-state drivers with rented vehicles, an acceptable proof would be a copy of the rental agreement showing the insurance policy along with a rental insurance form.
Alabama is one of the states that stick to the no-tort liability system. Under the tort liability system, a particular party is at fault during a car accident. That party is thereby required to pay for the necessary expenses. Alabama state insurance laws do not set a financial limit on judgments in car insurance cases, allowing the injured party to increase their financial claims for serious bodily injuries and damages from the negligent party.