Alabama Car Insurance Laws

Like nearly all states, Alabama requires that drivers must be able to pay for injuries and property damages they cause. Most drivers buy auto liability insurance to comply with the law. We'll explain the basics of Alabama's liability insurance requirements, including how much coverage you're required to have, who's insured, what losses are covered, and more.

Alabama Is a Fault-Based Auto Insurance State

Alabama, like most states, has adopted a fault-based auto insurance system. A driver who causes an accident is legally responsible for all resulting personal injuries and property damages. In most cases, the at-fault driver's auto insurance pays compensation (what the law calls "damages") to those who are hurt or whose property is damaged or destroyed.

Alabama's Mandatory Liability Insurance Law

To make sure that drivers can pay for (at least some of) the damages they cause in an accident, Alabama law requires them to meet minimum financial responsibility requirements. (See Ala. Code § 32-7A-4 (2023).) Most people comply with this law by buying an auto liability policy having at least these minimum coverages:

• $25,000 for bodily injury to, or the death of, one person injured or killed in an accident
• $50,000 for bodily injuries to, or the deaths of, two or more people injured or killed in an accident, and
• $25,000 for property damage in an accident.

(See Ala. Code § 32-7-6 (2023).)

What damages does liability insurance cover? Your liability insurance pays drivers, passengers, and others you injure, or whose property you damage, in a wreck that's your fault. It covers, up to the limits of your insurance, damages like:

• medical bills
• lost wages
• property losses
• other out-of-pocket expenses
• pain and suffering
• emotional distress
• disability and disfigurement, and
• other intangible losses.

Who does liability coverage insure? You and anyone else who's named as an insured under your auto policy will be covered. Most often, your liability policy will also insure family members who live in your household, as well as anyone else who has your permission to drive your car. Finally, your coverage likely also applies if you get into an accident in a rental car or temporary loaner vehicle.

Should I carry more than the state minimum coverages? Yes, if you can afford it. A serious crash resulting in significant car accident injuries and property damage will burn through Alabama's minimum liability coverage amounts very quickly.

Keep in mind the basic idea behind fault-based insurance systems: A driver who causes an accident is legally responsible for all resulting damages. You're on the hook financially regardless of whether you have enough liability insurance. Carrying higher liability limits might save you from financial ruin. Speak to your insurance agent about the kinds and amounts of insurance coverage that are right for you.

Your liability insurance won't pay your own damages. Your liability insurance only pays for damages you cause to others. It doesn't pay for your medical bills, lost wages, property damages, or any other losses you suffer. To cover those, you'll need to buy additional insurance.

In Alabama, medical payments (MedPay) coverage will pay your medical bills, as well as those of your passengers, regardless of who's to blame for the wreck. Collision coverage pays to repair (or replace) your damaged vehicle after an accident, even if you caused it.

Alabama law requires that every auto liability policy must also insure against losses caused by an uninsured motorist. This uninsured motorist (UM) coverage will pay your damages—as well as those of your passengers—if you're hurt by an uninsured driver. A named insured under the auto policy can waive this coverage. (Ala. Code § 32-7-23(a) (2023).)

Proof of coverage. You're required to provide proof of liability insurance coverage at the request of a police officer. This proof can be in paper or electronic form. (Ala. Code § 32-7A-6 (2023).)

What's the Penalty for Driving Without Insurance in Alabama?

Driving in Alabama without the required auto insurance is a Class C misdemeanor. The penalty for a first offense is up to three months in jail and a fine of up to $500. For second and subsequent offenses, in addition to a fine and jail time, your driver's license can be suspended for six months.

These penalties likely pale in comparison to the financial hit you'll take if you cause a wreck and you don't have auto insurance.

How Can I Collect Compensation After a Car Accident?

If you've been injured or your property has been damaged in an Alabama car accident, you typically have three options to collect damages. You can file:

• a third-party claim with the at-fault driver's auto insurance carrier
• a lawsuit against the at-fault driver, or
• a claim with your own auto insurance company, if you have the proper coverage.

Most often—as long as the at-fault driver has enough insurance—you'll settle your insurance claim with the at-fault driver's insurance company and that will end the matter. In rare cases, you'll need to file a lawsuit, a costly and time-consuming process that you want to avoid if possible.

Why might you bring a claim against your own auto insurance? Bringing a "first-party claim," as it's sometimes called, can make sense if:

• the at-fault driver is uninsured or underinsured and you have UM coverage, or
• you need to get your car repaired quickly and you have collision coverage.

What's Next?

If you're looking for legal advice that's tailored to your situation, talk to a car accident lawyer in your area. You can also learn more about car accident insurance claims, settlements, and more:

• How to File a Car Insurance Claim
• Car Insurance Deadlines: How Long After an Accident Can You File a Claim?
• Getting a Vehicle Repair Estimate After a Car Accident
• What If My Car Insurance Claim Is Denied?
• The Insurance Company Says My Car Is a Total Loss. What Now?
• How Will the Insurance Company Investigate My Car Accident?
• Car Accident Claims and Settlements