If you are a registered driver in the state of Alabama you have three ways that you can prove financial responsibility. You can purchase automobile insurance through a registered agent, obtain a motor vehicle liability bond in the minimum amount of $50,000 or purchase a certificate of cash bond for not less than $50,000
The mandatory insurance coverage through an auto insurance carrier is dictated by the insurance commissioner of each state. There are six major areas of coverage available for your auto insurance needs, but your state will dictate the minimum amount of liability coverage that you must have to drive in the Alabama.
When you register your vehicle, you are committing to carrying insurance coverage in the following areas: $25,000 bodily injury liability for one person involved in an accident; $50,000 for all injuries in one accident; and $25,000 for property damages in one accident. These amounts are the highest level that your insurance company will pay for each level of coverage.
Your bodily injury coverage will pay for the injuries or death of the person or persons who were involved in the accident with you if you are the one responsible for the accident. Property damage liability will pay for damages to another person’s property that was damaged or destroyed as a result of an accident where you were at fault.
Personal injury protection, or PIP, is not mandatory coverage but unless you have excellent health insurance you should seriously consider including it in your policy. It will cover the medical expenses for you, all relatives who live in your home, drivers who are authorized to drive your car, you and your family members if you are injured while in someone else’s car, and if you are a pedestrian hit by a vehicle.
The above requirements are the mandatory levels dictated by your state. You may want to add additional coverage to further protect yourself and your family. One addition you might want to make is collision coverage. If you still owe money on your vehicle, you will be required to carry collision coverage by your lender.
Comprehensive coverage protects the value and replacement of your car in the event that it is damaged as a result of anything other than an accident, including theft or damage by flooding or storms.
Uninsured or under-insured motorist coverage pays your expenses if you get hit by someone who does not have any insurance coverage or not enough coverage to pay the required expenses. Uninsured motorist coverage also covers you if you are the victim of a hit and run accident.
It is against the law to not have automobile insurance in Alabama and you must be able to provide proof if you are stopped by a law enforcement officer. Proof of insurance is acceptable in the following forms: insurance card, receipt of your insurance, binder or declarations page or a certificate from your carrier. You can also use a copy of your insurance policy, a copy of your certificate of cash bond, or your motor vehicle liability bond.
If you cannot provide proof of insurance or financial responsibility you could pay a reinstatement fee of $100 for your first offense. A second offense could get you a suspended registration for four months and a reinstatement fee of $200.