Auto Insurance Requirements in Alabama

Minimum auto insurance requirements vary from state to state and are determined by the individual legislatures in each state. Therefore it is important to understand a state's insurance laws when moving there because an insurance policy that may be perfectly acceptable in one state may not conform to the laws of another. Alabama has several major interstates running through it and as a major crossroads of the Southeast has some fairly stringent requirements for auto insurance compared to the rest of the region.

Every Alabama motorist must purchase a policy with a minimum of $25,000 in injuries to a single person, $50,000 in injury coverage to all victims of an accident, and $25,000 to cover damages to property. Alabama does not require uninsured coverage. This covers insured drivers who are involved in accidents with an uninsured driver. These requirements are identical to neighboring Georgia and Mississippi. This uniformity across the Midsouth is convenient for drivers.

Alabama allows drivers to forgo auto insurance by posting a bond of $50,000 to cover injuries and property damages from accidents. This is designed to protect against bankruptcy from costly accidents by insuring that every driver can pay medical, legal, and repair costs after an accident. However, very few Alabamans post the bond and almost all seek out insurance policies that meet Alabama's minimum requirements.

Unlike many states, Alabama does have tort liability in auto insurance cases. This means that judges can assign blame for an accident to a particular driver and make that driver liable for all costs of the accident. This makes it advisable for Alabama drivers to take out more than the minimum coverage. If they cause an accident and the legal, medical, or repair costs of that accident exceed the coverage their policy provides they can be held personally liable for those costs.

Driving without insurance can result in numerous financial and legal difficulties in Alabama. Alabama randomly surveys registered drivers, and drivers who are caught driving uninsured face suspension of their vehicles registration that is only lifted when they purchase insurance and pay an additional one hundred dollar fine. A second offense carries a two hundred dollar fine and four month suspension of their driver's license.