Alabama Minimum Car Insurance Requirements, Penalties and Other Auto Insurance Laws

Alabama’s mandatory liability insurance law requires anyone who wants to drive, maintain or register a car to have insurance. Being an at-fault state, if you cause an accident in Alabama, you’ll be liable to pay for the other driver’s expenses should you injure them or damage their property. Drivers should have policies meeting at least the minimum car insurance requirements in Alabama, which are 25/50/25 ($25,000 for bodily injuries per person, $50,000 for bodily injuries per accident, $25,000 for property damage). If you drive with no insurance in Alabama, you can receive penalties ranging from paying fines to serving jail time.

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What Is the Minimum Car Insurance Requirement in Alabama?

If you’re wondering how much insurance you need, car insurance laws in Alabama dictate that your policy must have at least liability coverage of 25/50/25. This means:

  • Bodily injury coverage of $25,000 per person
  • Bodily injury coverage of $50,000 per accident
  • Property damage coverage of $25,000 per accident

Driving without insurance in Alabama is illegal. If you can’t provide proof of insurance at a traffic stop, you may be required to pay fines and face other penalties.

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What Does This Minimum Coverage Mean?

When you read through your car insurance policy, you may read your liability coverage limits as 25/50/25. These three figures indicate the maximum amount your policy covers if you are at fault in an accident.

It means that if you cause an accident, your policy protects you from third-party medical expenses up to $50,000 for the accident. If multiple people are injured, there is a minimum coverage limit of $25,000 per person. Your policy also protects you from costs incurred from property damage, up to $25,000.

You’ll be able to register your car with the Department of Motor Vehicles if you carry a policy that meets Alabama’s minimum car insurance requirements. Realistically, though, expenses from an accident may exceed your limits, which means you’ll have to pay for the remaining amount out of your pocket. You can choose to increase your coverage limits to avoid this.

How Much Does the Minimum Car Insurance Cost in Alabama?

The cost of car insurance in Alabama depends on several factors. Your age is a consideration, but so is your driving history. If you have a clean driving record, your provider may offer lower rates. Likewise, a good credit score tells insurance providers that you’re more likely to pay your annual premium, making you less risky to insure.

Policy rates also vary between insurance providers. In Alabama, the company that offers the most affordable policy is USAA. Their policy costs an average of $304 per year but is only available to military members and their families. A more widely available option is GEICO, which offers similar coverages for $375 per year.

Cheapest Minimum Liability Car Insurance in Alabama

Cheapest Minimum Car Insurance in Alabama
  • Company
    Annually
    Monthly
  • 1.
    $304
    $25
  • 2.
    $375
    $31
  • 3.
    $494
    $41
  • 4.
    $498
    $42
  • 5.
    $562
    $47

These prices are only estimates based on rates for an average Alabama driver and should not be used to compare insurance prices.

The table shows rates for policies with Alabama’s minimum car insurance requirements of 25/50/25. The driver profile was a 40-year-old male with a good credit score and clean driving record with a 2010 Toyota Camry.

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What Is the Minimum Car Insurance Requirement in Alabama While Leasing a Car?

Choosing to lease a car instead of owning one may present different insurance requirements. Leasing companies typically require you to carry a full coverage insurance policy with at least 100/300/50 coverage. Coverage limits for leased cars are determined by the leasing company, not the state. It explains why their preferred limit is higher than Alabama’s minimum insurance requirement. You should contact your financial leasing company directly if you want to find their exact requirements.

Although a policy with 25/50/25 coverage is enough to meet Alabama’s minimum car insurance requirements, MoneyGeek recommends purchasing full coverage insurance — preferably a policy with at least 50/100/50 liability limits. Medical costs and repair expenses in a collision are often more than what the minimum limit can cover, leaving you to pay the remaining amount from your pocket.

Although uninsured/underinsured motorist insurance isn’t mandatory in Alabama, carriers are required to offer it with the same limits as Alabama’s minimum car insurance requirements. You can choose to reject it in writing, but purchasing it may benefit you in the long term, especially if your policy is liability-only. 19.5% of drivers in Alabama are uninsured, which is the seventh-highest rate of uninsured motorists in any state.

It’s best to consider all these factors to determine how much car insurance you need.

Penalties for Driving Without Car Insurance in Alabama

Carrying a policy with at least the minimum car insurance coverage in Alabama is mandatory for all drivers. You can’t register your car without insurance. Alabama is a tort state, which means you’ll have to cover the other driver’s medical bills and costs for property damage. If you’re not covered, it means you’ll have to use your personal savings, which could cause financial problems.

If you’re unable to show proof of insurance — or if your limits fall below the minimum car insurance requirements in Alabama — you could be subjected to several consequences. Depending on the number of convictions on your record, the penalties you could face for driving with no insurance in Alabama are:

  • Fines up to $1,000, depending on the number of convictions on your record
  • Imprisonment up to six months, depending on the number of convictions on your record
  • Impoundment of vehicle
  • Suspension of registration up to four months
  • Suspension of driver’s license up to six months
  • Paying a $400 reinstatement fee
  • Carrying SR-22 insurance up to three years after reinstatement

You’ll need an SR-22 to have your driver’s license reinstated and prove to the state that your policy meets the minimum car insurance requirements in Alabama. An SR-22 filing, however, tags you as a high-risk driver, causing your insurance premium to increase substantially. Some providers may even choose to deny you coverage.

Frequently Asked Questions About Car Insurance in Alabama

Learn More About Car Insurance

About the Author


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Mark Fitzpatrick is a senior content manager with MoneyGeek specializing in insurance. Mark has years of experience analyzing the insurance market and creating original research and content. He graduated from Boston College with a Bachelor of Arts and Johns Hopkins University with a Master of Arts.


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