Alabama Auto Insurance Laws, Minimums, Requirements
What mandatory auto insurance laws exist in the state of Alabama?
- All Alabama drivers must be covered by liability insurance or an acceptable alternative i.e. motor vehicle liability bond or deposit of cash. The motor vehicle liability bond must be filed with the Department of Revenue’s Motor Vehicle Division. The deposit of cash with the Alabama State Treasurer shall be a sum of not less than fifty thousand dollars ($50,000).
- Alabama requires that driver’s provide proof of insurance at time of registration.
- Proof of insurance is required at the time of accidents.
- You must carry proof of insurance at all times while in a vehicle.
- In the state of Alabama, you must carry minimum liability coverage of at least $25,000 for bodily injury to one person, $50,000 for all bodily injuries, and at least $25,000 for property damage. Alabama raised its limits in 2008 from 20/40/10 to 25/50/25. The new law went into effect on August 30, 2008.
What is the Minimum Liability Coverage (Bodily Injury amounts per person, per accident, and property damage amounts):
If you buy automobile insurance in Alabama, your policy must include minimum liability coverage of:
$25,000 for bodily injury liability for one person in an accident,
$50,000 for all injuries in an accident,
and
$25,000 for property damage in an accident
What are the Rental Car Insurance Requirements?
If your auto insurance or credit card does not cover car rentals, the state of Alabama requires that you carry a copy of the rental agreement when renting a motor vehicle, which specifies the insurance coverage.
What are the rules pertaining to Uninsured/Underinsured Motorist Coverage?
Alabama does not require Uninsured/Underinsured Motorist coverage.
What are the rules pertaining to the exclusion from coverage of a driver living in household?
In the state of Alabama, all drivers in the household must be covered by liability insurance.
What are the rules regarding whether a driver has prior insurance? That is, how does state law handle it if a driver has no prior insurance or has let their previous insurance lapse?
In the state of Alabama, all registered vehicles require insurance coverage at all times. If your insurance lapses, this means that you are not covered during this time. If you become involved in an accident, and your insurance has lapsed, this is as good as driving without insurance. If you are caught driving without insurance, your license will be suspended and you will be fined up to $500 in fines and penalties if it is your first offense.
With regard to obtaining auto insurance from an auto insurance provider, if you currently have an automobile insurance policy or have had a policy in the past, you will need to provide the name of the company, the dates you were insured, and the liability coverage limits you carried. Some Alabama auto insurance companies will offer you a better price if you have carried liability limits higher than the minimum required limit. If you have not owned a vehicle, meaning, you were not legally required to carry insurance, and have not violated the Alabama Mandatory Insurance Act, lack of prior insurance coverage may not be considered as a factor.
What are the rules and guidelines auto insurance companies must follow regarding the use of Personal Credit History in selecting applicants and setting rates?
In the state of Alabama, the use of Personal Credit History is permissible to determine your insurance premium. Your Personal Credit History may also be used to determine whether you will be making monthly or quarterly payments or if you will be required to pay the entire premium upfront. Personal Credit History is also used to create a “insurance risk score.” This score also helps determine your auto insurance rates. In order to enjoy a lower insurance premium, pay your bills on time in an effort to improve your score. This will also help improve your credit history so that in the long run, you can save money on your car insurance premium.
Is the state a No Fault or Tort state? What does either mean to the policy owner?
Alabama is a Tort state. This means that the driver who is at fault in the accident must pay the victims medical expenses and the victim has the ability to file a court claim against the driver found to be responsible for the accident for any additional and related damages including pain and suffering and lost wages.
What is the average auto insurance premium in the state of Alabama? As of what year?
As of 2006, Alabama’s resident’s average insurance premium was approximately $684, the 37th most expensive in the nation. This was up 0.7% from the previous year. The national average was $817.
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