Alabama Car Insurance


Coming to Alabama to cheer on the Crimson Tide? Whatever your reasons for traveling through the Heart of Dixie, it’s important to be protected. Road accidents are often unpredictable, but if ever you get into auto trouble somewhere in Alabama, state-specific insurance coverage will help you get through it.

Alabama has an above-average rate of uninsured motorists compared to the rest of the U.S., so the local government recently updated its Mandatory Liability Insurance Act. Authorities introduced the Alabama Online Insurance Verification System that enables them to verify a car’s insurance status immediately. If you are found guilty of driving without insurance, you risk penalties such as paying a hefty fine or suspension of your vehicle registration and driver’s license.


Alabama Car Insurance Requirements

The Mandatory Liability Insurance Act, as enforced by the state law enforcers and officials, states that the required minimum car insurance coverage in Alabama must be:

Bodily Injury Liability: $25,000 per person and $50,000 per accident

Property Damage Liability: $25,000 per person

Uninsured/Underinsured Motorist Bodily Injury: $25,000 per person and $50,000 per accident*

Optional Car Insurance in Alabama

*This coverage can be rejected.

Types of Optional Car Insurance Coverage

For policyholders whose liability insurance policy does not cover bodily injuries and/or property damages, it is advisable to take optional car insurance coverage into consideration. This is especially true in Alabama, which is an “at-fault” state, meaning to say, the driver(s) at fault will hold legal responsibility for the accident-related damages, bodily injuries, or death. Listed below are some of the options you may purchase from your insurer:

  • Medical and funeral
  • Collision
  • Uninsured drivers
  • Comprehensive
  • Keep in mind to discuss more about each type with your insurance agent.

Factors affecting Alabama Car Insurance Rates

Insurance companies in Alabama have different rates for their auto insurance policies. Several factors may affect an insurance coverage’s rate, so it is important to shop around before buying one.

In Alabama, there are two factors that determine the things you pay for in your insurance. These two factors are called underwriting and rating. Both factors analyze the risk and characteristics that you may present. In underwriting, your insurer will evaluate the risks that you may pose to other people. After passing this process, it is only then you may become eligible for an insurance coverage. Meanwhile, in rating, it talks about the results of the evaluation conducted by the insurer on your characteristics and risks. Therefore, the price of your insurance depends on the rating you have acquired and on the insurer’s own estimation of your risk. The insurer’s role is to help you determine your potential financial responsibility for a person’s compensation claim.

Other Underlying Factors that will determine your Rate

Gender – In Alabama, more males are involved in road accidents than the opposite sex so men may be offered with a higher rate.

Marital status – Research shows that accidents are higher for single car insurance owners.

Age – Based on statistics, there are certain age groups that have filed more claims than the other groups.

Geographical location – Some counties or states have higher claims records than other places because of heavy traffic, crimes, among other violations.

What you drive – Car makers that have tallied a high(er) number of claims and compensation cost will be rated highly.

How you use your vehicle – If you use it often and for long road trips, expect the car to have a high-risk exposure, so will the insurance premium.

Driving record – Ever involved in a traffic violation or accident?

Any existing insurance coverage – Previous insurance records such as any claims history and cancelled premiums due to non-payment will help insurers customize the right car insurance coverage for you.

Alabama Car Insurance Discounts

Here are some of the many car insurance discounts offered in the state:

  • Do you own multiple cars?
  • Does your car have low mileage?
  • Do have clean records as a driver for years?
  • Are you a homeowner?
  • Are you a good student (e.g. Grade B or above)?
  • Do you pay your policies in full?
  • Are you willing to receive an insurance quote online?

If you said yes to each of these questions and you are an Alabamian, then you are entitled to get friendly discounts on your car insurance. It is also advisable to speak with your insurer regarding other actual discounts and know how much money you could save.

Alabama Car Insurance Quick Facts

Stolen Cars – In 2013, the top ten most stolen cars in Alabama are Full-size Chevrolet Pickup, Ford Pickup, Honda Accord, Chevrolet Impala, Toyota Camry, GMC Pickup, Dodge Pickup, Nissan Altima, Ford Explorer, and Small-size Chevrolet Pickup.

Teen car accidents – The Insurance Institute for Highway Safety reports that in 2012, 70 percent of the insurance claims for accident-related property damages and bodily injuries were caused by teen drivers aged anywhere between 15 and 19.

Number of uninsured motorists in AL – According to the 2009 IRC report, 22 percent of Alabamian motorists were uninsured. Therefore, protecting yourself with an uninsured driver coverage policy might be the best option.

Lawsuit after the accident – In Alabama, the statute of limitations for settling a case starts on the day the accident took place. For injury, the time limit is within two (2) years, while for property damage, time limit is within six (6) years.

Grounds for insurance policy cancellation

If you suffer from heart attack, epilepsy, or any other health condition that could harm public safety while you’re driving.

Being involved in criminal activities (i.e. felony, criminal negligence, fraud, including drug addiction).

As for non-payment of premium, Alabama requires the insurer to submit a ten-day notice of policy cancellation to the insured driver before any discontinuation in coverage takes place.

Proof of insurance in Alabama

Residents are required to provide proof of Alabama car insurance if requested by a police officer. Failure to provide proof of insurance can result to a fine of $500 to $1,000 if you’re convicted of driving uninsured.