Alabama Car Insurance Guide

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Carrying adequate car insurance coverage is a legal requirement in Alabama. It’s also a no-brainer. This guide explains what you need to know about getting insured in the State of Alabama, including driving laws and minimum insurance requirements for personal vehicles, commercial vehicles, and motorcycles.

Personal Auto Insurance

Auto insurance protects you from financial loss in the event of a car accident. It is a contract between you and your auto insurance company. You agree to pay the premium, and the car insurance company agrees to cover your losses as defined in your policy.

Alabama law requires all registered personal vehicles to be covered by an auto insurance policy. Auto insurance policies typically comprise two types of coverage: liability and physical damage. Alabama drivers are required to carry liability coverage at minimum, which includes protections for bodily injury and property damage.

Physical damage coverage includes collision and comprehensive insurance, which protect your car if it’s damaged in a collision or an incident other than a collision. While many drivers in Alabama opt for physical damage coverage, it is not required by law, but your lender may require it.

Alabama Driving Laws

Driving laws in Alabama do change, so it’s important to stay up to date on current state requirements. The new minimum insurance requirements and penalties for driving without insurance went into effect Jan. 1, 2020. It became illegal to text and drive in Alabama on Sept. 1, 2019, and novice drivers are not allowed to use handheld or hands-free cell phones.

Since 2003, law enforcement officers in Alabama can immediately verify a vehicle’s insurance status using the State of Alabama Online Insurance Verification System. If insurance cannot be verified through the system, drivers must be able to provide proof of insurance, either through a physical card or electronically, that displays the following information:

  • Current policy date
  • Insurer’s National Association of Insurance Commissioners number
  • Vehicle identification number (VIN)
  • Policy number

Drivers must also provide a valid state-issued driver’s license, non-driver ID car, or national driver’s license for each owner listed on the vehicle title.

Alabama Minimum Car Insurance Requirements

Alabama law requires all registered vehicles to carry a minimum amount of car insurance. Failure to maintain coverage can result in punishment and penalties, such as a monetary fine, license suspension, or even jail time. And it could cost you a lot more: under Alabama car insurance laws, you can also be held liable for property damage, medical expenses, lost wages, and pain and suffering.

As of Jan. 1, 2020, the Alabama Mandatory Liability Insurance Law requires all vehicles to be covered by insurance that includes these coverages:

  • $25,000 bodily injury liability coverage for bodily injury or death per person per accident
  • $50,000 bodily injury liability coverage for bodily injury or death to any two or more persons per accident
  • $25,000 property damage liability coverage for property damage caused by an auto accident

Drivers in Alabama have the right to reject uninsured/underinsured motorist coverage (UM/UIM). Alabama car insurance laws require insurance providers to offer UM/UIM coverage to all drivers, but drivers don’t have to accept it. You can waive this coverage if you tell your insurance provider in writing that you have chosen to opt out. However, forgoing UM/UIM could leave you totally financially responsible in the event of an accident with an uninsured driver. (More on UM/UIM below).

Penalties for Driving Without Insurance in Alabama

Even though the Motor Vehicle Division of Alabama’s Department of Revenue uses online verification, Alabama car insurance laws still require drivers to carry proof of insurance in all vehicles at all times in the form of a physical insurance ID card or an electronic image of your insurance ID on your cell phone.

The penalty for a first offense is up to a $500 fine and/or a six-month driver’s license suspension, plus a $200 registration reinstatement fee. For second or subsequent violations, the penalty is up to a $1,000 fine and/or a six-month license suspension, as well as a $400 reinstatement fee.

Vehicle owners must also be able to provide current proof of insurance to reinstate the vehicle registration.

Penalties for Driving with a Suspended License in Alabama

It’s against the law to operate a vehicle without a valid driver’s license in Alabama. The exact penalty for driving without a license or driving with a suspended license in Alabama depends on a few factors, although it generally involves fines, jail time, or both.

Driving with a suspended license is a misdemeanor that can result in any of the following:

  • $100-$500 fine, plus a $50 traffic fund penalty
  • Imprisonment for no more than 180 days
  • Immediate vehicle impoundment
  • License suspension increase of six months
  •  

Common Types of Car Insurance Coverage

Familiarizing yourself with these commonly used car insurance terms will help you better understand what a car insurance policy entails. Click the links for in-depth explanations of some common car insurance coverages and terms:

Alabama SR-22 Insurance

SR-22 “insurance” is not actually type of auto insurance. It is a document that an auto insurance company files with the state to certify that an individual has a current insurance policy that meets the state’s minimum liability coverage or financial responsibility requirements.

An SR-22 is usually required if you have been convicted of a DUI/DWI, have failed to maintain car insurance coverage in the past, or have committed serious driving violations. “SR” stands for “safety responsibility.”

Non-Standard Car Insurance

Insurance companies consider some drivers “high risk” if they have a history of accidents, traffic citations, or DUI/DWI convictions. Non-standard auto insurance, or high-risk auto insurance, covers these drivers.

Uninsured/Underinsured Motorist Coverage in Alabama

Under Alabama law, drivers are not required to carry uninsured/underinsured motorist coverage (UM/UIM). Although Alabama car insurance laws require that insurance providers offer UM/UIM coverage to all drivers at the time of policy purchase, drivers can opt out of it if they tell their provider why in writing.

Rejecting this coverage is a way to save money on car insurance, but it also means you assume greater financial risk if you’re involved in a hit-and-run or an accident with an at-fault driver who either does not have liability insurance (is uninsured), or doesn’t have enough of it to cover your claim (is underinsured).

Alabama is a fault state, meaning the at-fault party is responsible for paying damages. If the at-fault driver in your case doesn’t have insurance, the financial responsibility will fall on you or your insurance provider if you have the right coverages. This probably won’t be a big deal if you have UM insurance coverage, but if you turned it down, your provider could deny your claim, leaving you on your own.

Unlike liability coverage, which helps pay for the other person’s expenses, uninsured motorist coverage helps you pay for your expenses (i.e., medical bills, legal fees, etc.) that are a result of an accident caused by a driver who is uninsured or underinsured.

Click here to read more about Uninsured Motorist Coverage.

Where to Get Cheap Car Insurance in Alabama

Wondering where to get cheap car insurance in Alabama? Alabama car insurance rates and discounts are based on a range of factors, including:

  • Your vehicle
  • How much you drive
  • Your driving record
  • Your age
  • Your ZIP code
  • The amount of insurance coverage you choose

Direct Auto offers affordable insurance for cars, commercial vehicles, and motorcycles. Plus, you also have the option to make your coverage more affordable by customizing your payments. Choose your down payment amount, your monthly payment amount, and the day of the month your payment is due. We also offer these car insurance discounts and more:*

  • Military discount
  • Safe driver discount
  • Senior citizen discount
  • Multi-car discount
  • Mileage discount

Commercial Auto Insurance in Alabama

All business-owned vehicles in Alabama must be covered by a commercial auto insurance policy. Commercial auto insurance is typically for drivers who use their car or truck to do activities related to their occupation or business (other than commute).

The minimum commercial auto insurance requirements in Alabama vary depending on the size, type, and weight of the vehicle, the number of passengers it carries, and whether it carries hazardous materials, is a for-hire taxi, or is a tow truck, among other factors.

However, the typical small business owner doesn’t drive a heavy truck or transport hazardous materials. As such, the minimum commercial car insurance requirements in Alabama for what’s referred to as a “light” vehicle, such as a sedan or pickup truck, are the same as the minimum requirements for a personal vehicle.

The minimum commercial car insurance requirements in Alabama include:

  • $25,000 bodily injury liability coverage for bodily injury or death to one person
  • $50,000 bodily injury liability coverage for bodily injury or death to any two or more persons, per accident
  • $25,000 property damage liability coverage for property damage caused by an auto accident

Common Commercial Auto Insurance Coverages

Although bodily injury and property damage liability coverage are the only coverages required by law, there are many types of commercial car insurance coverages that allow business owners to customize a policy for their business.

The most common commercial auto insurance coverages are split into two categories: liability coverage and physical damage coverage.

Liability Coverage

Commercial car insurance liability coverages include:

  • Bodily injury liability: required by Alabama law
  • Property damage liability: required by Alabama law
  • Hired auto & employer’s non-ownership: optional coverage that can cover vehicles your business hires, leases, rents, or borrows and provide liability protection for bodily injuries or property damage caused by you or an employee while driving for work purposes

Physical Damage

“Physical Damage” refers to several insurance coverages that protect commercial vehicles. These coverages include:

  • Collision insurance: pays to repair or replace your vehicle if it rolls over or collides with another vehicle or object
  • Comprehensive insurance: protects your vehicle if it’s damaged by something other than collision, such as vandalism, theft, fire, etc.
  • Fire and theft with combined additional coverage (CAC): also known as limited comprehensive insurance and specified perils insurance, provides coverage (usually for heavy trucks) if your vehicle is damaged by specific incidents other than collision

Other Commercial Auto Insurance Coverages

Some business owners select a variety of the following coverages options to help protect their business and their employees:

  • Medical payments
  • Uninsured/underinsured motorist
  • Loss of use coverage
  • Towing & labor reimbursement coverage
  • Permissive use
  • Temporary substitute auto

Direct’s commercial auto insurance policies are competitively priced and offer flexible payment options, available discounts, and policy terms for 6 and 12 months.** Learn more about the different types of commercial auto insurance.

To purchase commercial auto insurance in Alabama, stop by a participating Direct Auto office in Birmingham, Cullman, Mobile, Decatur, Gadsden, Albertville, Florence, Huntsville, Athens, or Russellville. Or, call 1-877-GO-DIRECT (1-877-463-4732).

Commercial Auto Insurance & Uninsured Motorist Coverage

Commercial auto insurance policies can also include uninsured/underinsured motorist coverage (UM/UIM). In a commercial auto insurance policy, UM coverage can help cover the expenses incurred after you or a covered employee are involved in a hit-and-run or accident with an at-fault driver who is uninsured or underinsured.

Like personal auto insurance, Alabama auto insurance companies must offer business owners UM/UIM coverage at the same limits as liability coverage. Business owners do not have to accept it. Rejection of UM/UIM must be in writing.

Are you a small business owner in Alabama? Adding UM/UIM coverage to your commercial auto insurance is a smart way to protect your employees and the business you’ve built.

Direct offers commercial auto insurance in Alabama that can insure a fleet of up to 20 vehicles. Our commercial auto insurance policies are competitively priced and offer flexible payment options, discounts, and policy terms for 6 and 12 months.** Learn more about the different types of commercial auto insurance.

To purchase commercial auto insurance in Alabama, stop by a participating Direct Auto office in Birmingham, Cullman, Mobile, Decatur, Gadsden, Albertville, Florence, Huntsville, Athens, or Russellville. Or, call 1-877-GO-DIRECT (1-877-463-4732).

Alabama Motorcycle Insurance Laws

Motorcyclists are also required by law to be covered by motorcycle insurance. The required financial responsibility for motorcycles in Alabama is the same as it is for automobiles.

Not all motorcycle policies in all states cover passengers. Never assume that motorcycle guest passengers are automatically covered by motorcycle liability insurance. In states where they are not, motorcycle guest passenger liability (GPL) must be purchased in order to cover passengers. This coverage will cover passengers if you are found to be liable or legally at fault for any accident.

Always practice safety precautions when riding a motorcycle. Safety gear and safe driving are important. For more information, check out our motorcycle safety tips.

More Information

If you still have questions, want to learn about other Alabama auto insurance coverages, or would like to get a free quote on affordable auto insurance coverage, contact us online, over the phone at 1-877-GO-DIRECT (1-877-463-4732), or stop by a Direct store near you.

Other Alabama Insurance Resources

 

*Rates and savings vary. **Commercial auto and motorcycle insurance are produced by Direct Auto Insurance agents for related and unrelated carriers. Not available in all stores. Rates, pay plans, discounts and coverages subject to terms and conditions.

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