Alabama residents enjoy astonishing biodiversity, with more species of plants and animals than any other state east of the Mississippi. You’ll even find more types of freshwater fish there than in any other state in the country. But whether you’re enjoying nature while driving through the state’s backcountry or its cities, you’ll need good car insurance. Read on to find out what the state requires for coverage and road safety.
Alabama Vehicle Insurance Requirements
Alabama has required drivers to carry liability insurance since 2000, but the state recently recorded one of the highest rates of uninsured drivers in the country. In 2012, nearly 20 percent of drivers lacked insurance, according to the Insurance Research Council. To combat this problem, the state created an online verification system in 2013 to identify and fine drivers without insurance.
Who Needs Vehicle Insurance in Alabama?
In Alabama, any car that is registered must have liability insurance (or another proof of financial responsibility – see Alternatives to Insurance, below). If you have an old junker that’s inoperable or a stored vehicle not meant to be driven on public roads, the state’s mandatory insurance law doesn’t apply to it.
Proof of Insurance
Alabama drivers are required to carry some proof of insurance, usually an insurance card, that must stay in the car at all times. Cards should have the following information:
- The car’s make, model, year and vehicle identification number
- The name of the person who is insured
- The insurance company name and its National Association of Insurance Commissioners code
- The policy number (except for temporary cards) and the dates for which it is active
Drivers have to show evidence of Alabama auto insurance on at least three occasions:
- If a law enforcement officer asks to see your license during a traffic stop. Not doing so is a misdemeanor.
- When you register your vehicle. The state will not renew its registration without proof of liability insurance.
- If you are in an accident. You’ll need to share your information with the other party.
If you’re not carrying your insurance card, the Alabama Administrative Code allows you to show the same proof on your cell phone or computer.
Minimum Liability Insurance Requirements
Alabama requires this level of liability insurance for all drivers:
- $25,000 to cover the death or injury of one person
- $50,000 to cover the death or injury of multiple people
- $25,000 to cover property damage
Keep in mind that this is the bare minimum coverage required by law, and most drivers will need more insurance to be adequately protected (see below: “How Much Vehicle Insurance Do You Need?”).
Alternatives to Insurance in Alabama
There are only two legal alternatives to auto insurance in Alabama, and neither one is cheap. The first is a motor vehicle liability bond for at least $50,000, which is filed with the Department of Revenue though a surety company. The second is a cash deposit with the state treasurer for the same amount.
Drivers who opt for the former will receive a motor vehicle liability bond certificate, while those who get the latter will receive a cash bond certificate. Copies of these certificates must be carried in the car, just like proof of insurance.
The advantage of surety bonds is that holders only need to put down a portion of the total, anywhere from one to 15 percent, depending on their credit. The disadvantage is that they are still responsible for paying the full amount if they are at fault in an accident. Drivers holding a cash bond that does not meet the full costs of an accident, meanwhile, have just 30 days to come up with the remainder.
What Happens If You Don’t Have Car Insurance in Alabama?
Driving without insurance is a misdemeanor in Alabama, with first-time fees up to $500. But even if you’re not pulled over, you can still be caught. Sherry Helms of the Alabama Department of Revenue explains that the state checks out insurance whenever a car is registered. Drivers that aren’t properly insured must pay a $200 fee to have insurance reinstated. According to Helms, 35 percent of registrants are required to pay reinstatement fees “because their insurance is out of date.”
The state periodically checks on the insurance status of drivers, and it will send out a questionnaire to anyone suspected of letting insurance lapse. In 2015, almost 471,000 questionnaires were sent out to registrants, Helms says.
If your insurance has run out, you must get insurance and pay the $200 reinstatement fee for registration. If you dropped insurance coverage because the car was in storage or inoperable, you can explain this but will have to re-register the car before driving it again.
How Much Vehicle Insurance Do You Need?
While the state has a $25,000/$50,000 policy minimum, industry experts generally recommend getting at least $100,000/$300,000 worth of coverage. In other words, it’s usually wise to stay away from cheap car insurance.
Alabama Lack Vehicle Insurance? 19.6% National Average: 12.6 %
Many also say that collision and comprehensive coverage are a good idea for all cars worth more than $1,000. Collision will pay to repair or replace your car if you’re in a crash (provided it’s worth more than the deductible), and comprehensive insurance will cover non-traffic disasters like fire, robbery, floods, and hurricanes.
Given Alabama’s high rate of uninsured drivers, people should also consider purchasing uninsured motorist coverage, which covers them when the other motorist doesn’t have enough insurance to cover the cost of an accident he or she caused (or if they’re the victim of a hit and run).
For more on the subject and the type of discounts you may qualify for, see the MoneyGeek guide to car insurance.
Teen Drivers in Alabama
Expect to pay more for your insurance premiums when your teen gets a license. With most insurers, it’s less expensive to add your teen to your own policy than to pay for a separate policy. Check out possible discounts for good students and/or making sure your child drives a crash-worthy sedan, which costs less to insure than a new sports car or SUV.
Alabama Car Insurance: The Difference a Teen Makes
Median annual price change for families with a teen driver on their policy:$2,172 increase This is an increase of 150%.
Average annual premium hike if your teen gets a speeding ticket while driving 11 to 15 mph over the speed limit:
Insurance Discounts for Teens in Alabama
Impact on annual premium with Good Student and Defensive Driving discounts:$428 saved
Compare Auto Quotes from Alabama Insurers
Policy costs vary more than you may think, so shop around. Check out the annual average premiums for a married couple with a 16-year-old teen driver in Alabama:
How Car Choice Affects Alabama Premiums
Do insurers consider sports cars a more risky choice for teens than sedans and minivans? They do, according to industry insiders — and premium rates reflect it.
Average premium for two 2014
Average premium for two 2008
Town and Country Limiteds
Annual benefit of minivans:
College Students in Alabama
Many insurance companies offer a good student discount to students who main a 3.0 GPA during their college years. If you’re going to school out of state, notify your insurance company. You may need to match your new state’s insurance requirements.
College vs. High School Drivers in Alabama
Median annual premium change with a college student vs. high school driver$1,113 decrease This is a decrease of 28%.
How a College Student Affects Your Alabama Premiums
Each year, take a look at your policy before it renews to see whether you could get a better deal. Case in point: Here are the average premiums for a married couple and a 19-year-old college student in Alabama.
Distance Discount: Savings for Alabama College Drivers
You may see a slight break in your family’s premium if your student lives 150 miles away from home.
Average premium for a 19-year-old male
- $3,361 at home
- $2,763 at school
- $598 in savings
Average premium for a 19-year-old female
- $2,845 at home
- $2,444 at school
- $401 in savings
How Car Choice Affects Premiums in Alabama
Your college student driving a minivan will cost less than if he or she drives a sports car — a reflection of the lower risk to insurers.
2014 Mustang GTs (2)$3,749
2008 Town and Country Limited minivans (2)$2,272
Annual benefit of minivans
Military Drivers in Alabama
Veterans and the more than 9,000 active duty military personnel living in the state can expect discounts on car insurance exclusively for them and typically for their spouses as well. Although non-residents are not required to register their vehicles while stationed in Alabama, they must still carry the state’s required minimum coverage, so it pays to shop around for a military discount.
Many companies licensed to sell auto insurance in Alabama also offer discounts for buying two or more policies, such as auto and homeowners, so military vets and enlisted can save even more. Visit the Alabama Department of Insurance for benefits available to military personnel and veterans.
Disabled Alabama vets who own a vehicle that was financed through the Veterans Administration are also exempt from registration and taxes on the vehicle, though insurance is still mandatory. The Veterans Administration provides a complete list of benefits available here to Alabama veterans and military personnel.
Alabama Service Members:
How the Vehicle You Drive Affects Your Premium
SUVs and pickups are more likely to be involved in rollover crashes, according to insurance industry research, but an older model SUV is less likely to drive up your premium than a recent model sports car.
Comparison of Premium Ranges by Driver Age and Vehicle for a Military Driver
Age Savings for Alabama
Median auto insurance
for service members:
Compare Average Rates Available to Alabama Military Personnel
When looking for a good premium, it pays to do some comparison shopping. Check out the average annual rates you can get in Alabama.
Seniors in Alabama
Alabama requires insurers to offer a mandatory discount to seniors who complete the AARP Smart Driver Course. The class covers everything from blind spots, the safest way to change lanes and the proper use of air bags and antilock brakes to the impact of medications on driving.
Undocumented Workers in Alabama
In general, Alabama does not allow undocumented immigrants to get licenses. However, the federal government’s Deferred Action for Childhood Arrivals program allows some undocumented immigrants who arrived in the U.S. before they were 16 to get licenses, provided they meet other criteria, such as being 30 years old or younger on June 15, 2012. A full list of guidelines can be found here.
Ridesharing Insurance in Alabama: Are You Covered?
Driving a car for personal use is one thing, but using it to drive other people around for pay is another, at least in the eyes of insurance companies. In general, personal insurance policies don’t apply to business use.
In Alabama, state and local legislators are still determining how to regulate ridesharing companies like Uber and Lyft. Though ridesharing companies offer their own insurance, such policies do not necessarily cover all the costs of an accident. Rideshare drivers should talk both with their employer and their insurance agent to make sure they and their passengers are covered for not just minimum liability in an accident, but also the injuries and damage caused by uninsured drivers.
Car Accidents: How to File a Claim in Alabama
There were more than 126,000 car accidents in Alabama in 2013, according to the Alabama Department of Transportation. Drivers unfortunate enough to be in an accident should take the following steps:
- Stay at the scene. Drivers can lose their license by fleeing an accident.
- Get out of the way and avoid further accidents by pulling to the side of the road and putting on hazard lights.
- Call the police. Alabama assigns fault for accidents in order to determine who is liable for accidents. A police report will help establish the facts of the accident.
- Exchange insurance and contact information with the other driver (and witnesses, if any). You may need the other driver’s information in order to file a claim with his or her insurance company.
- Notify the Alabama Department of Public Safety within 30 days if the accident caused injury or at least $250 of damage.
- If the driver at fault was not insured, file an SR-31 form with the Safety Responsibility Unit of the Alabama Law Enforcement Agency.
- If the other driver was at fault, file a claim with that driver’s insurance company or, if there is collision insurance on the vehicle, file a claim with your insurance company. Your company will then settle up with the other driver’s insurance. If you were at fault, file a claim with your insurance company.
Best and Worst States for Drivers: How Does Alabama Rank?
Alabama is in the top 15 states with the highest rate of traffic fatalities in the United States, the top 10 for the highest rate of fatal crashes involving drunk driving, and the top six for crash deaths involving passengers not wearing seat belts, according to data from the National Highway Traffic Safety Administration (NHTSA). In 2012, for instance, over half of people killed in crashes in the state weren’t wearing seatbelts. The state’s “Buckle Up, Alabama!” campaign is trying to drive down that figure by encouraging universal seat belt use, and it enforces severe penalties for drunk driving.
Alabama Driver Safety Ranking
The driver safety table shows the different safety factors that contribute to your state's overall safety rank (in the green box). The overall safety ranking and the National Ranking column scores in each category (including crash fatality rates) are from safest to most dangerous, with 1st being the safest and 51st the least safe.
How did we create the safety rankings?
We created a traffic safety ranking of all US states plus the District of Columbia by combining data from the National Highway Traffic Safety Administration and the Insurance Institute for Highway Safety. We looked at fatality rates by distance traveled as well as by population and gave more weight to behaviors that were riskier and preventable (i.e., drunk driving, not using a seat belt), as well as to accidents that involved more than one party (i.e., multi-vehicle).
|Driver Safety Profile||Number of Fatalities||Fatality Rate
The fatality rate is the rate per one billion vehicle miles traveled, except for pedestrian and bicyclist fatality measures, which are per measured per a population of 100,000.
Rankings are in order of safest to least safe. A state with the lowest fatality rate would be the safest, and thus ranked #1.
|Drunk Driving-Related Fatalities||264||4.06||42nd|
|Passenger Vehicle Unrestrained Fatalities||369||5.67||45th|
|Unhelmeted Motorcycle Fatalities||1||0.02||2nd|
|Multiple Vehicle Fatalities||351||5.40||35th|
|Total Vehicle Fatalities||852||13.10||37th|
Sources: National Highway Traffic Safety Administration, Insurance Institute for Highway Safety
Alabama: Protecting You from Injury on the Road
Alabama has some strong driving safety laws, including mandatory ignition interlocks for drunk driving. Seat belt laws are more problematic: state law mandates that drivers, children and front-seat passengers be buckled up, but Advocates for Highway and Auto Safety, an alliance of public health officials, consumer advocates and insurers, urges Alabama to enforce seat belt laws for adult passengers in rear seats as well. (The safety group also encourages Alabama to adopt stronger cell phone laws and raise its minimum age for a full license to 18.)The state’s laws for motorcyclists are optimal, however, since they require motorcyclists of all ages to wear helmets. In fact, Alabama had only two deaths in 2013 involving motorcyclists without helmets, according to NHTSA.
|Mandatory seat belts||Law is enforced for driver and riders in the front seat and/or children under 15|
|Child passenger safety||Children under one must be in a rear-facing child seat; 1- to 4-year-olds can be in a forward-facing child seat; and 5-year-olds must be in a booster seat|
|Driving under the influence (DUI)||Legal limit is 0.08 blood alcohol content. First conviction: mandatory 3-month license suspension; DUI class, fines; sentence may include up to a year in jail. Higher penalities for multiple convictions|
|Ignition interlock after DUI||Partial||Comes into effect if there are multiple convictions|
|Talking on cell or texting while driving||No one can text while driving, and 16- and 17-year-olds with an intermediate license may not use cell phones at all in the car|
|Protections for young drivers||Alabama has a graduated driver’s license law. 16-year-old drivers with intermediate licenses can only have one non-family-member passenger in the car; additionally, they cannot drive between midnight and 6 a.m., among other restrictions|
|Motorcycle helmet law||All motorcyclists must wear helmets|
|Bicycle helmet law||Partial||Bicyclists under the age of 16 must wear helmets|
Source: Governors Highway Safety Association, 2016
Car Insurance Resources for Alabama Residents
This consumer’s guide walks users through the regulations and how they should shop for insurance based upon the state’s tort systems.
Before purchasing a policy, consumers can use the search tool here to make sure the company is registered to operate in the state.
If you’re unable to resolve an issue with your insurance company, you can use this website.
This division is responsible for enforcing the Mandatory Liability Insurance Law and registering vehicles.
Though not specific to insurance, the March 2015 Alabama Driver Manual has important information about state traffic laws.
This has a robust page on Alabama and teen drivers.