Car Insurance Requirements in Alabama (2024)

Whether you’re moving to Alabama or you’re a homegrown, new Alabama driver, you’ll need car insurance to protect you behind the wheel. Alabama law requires a minimum amount of car insurance coverage.

Here’s what you need to know about the state’s car insurance requirements, insurance rates, penalties for driving without proper coverage, and more.

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Alabama car insurance requirements

Alabama drivers must obtain a certain amount of bodily injury and property damage liability coverage to meet state minimum insurance requirements.^[1]

You may also need additional coverage if you have an existing auto loan, as lenders often require collision insurance and comprehensive insurance on financed vehicles.

Here are Alabama’s minimum car insurance requirements.

Bodily injury liability insurance

Bodily injury liability insurance can cover medical expenses for other drivers, their passengers, pedestrians, and your unrelated passengers if you’re found responsible for a car accident. For instance, if the other driver is brought to the emergency room by ambulance after the accident, your bodily injury insurance would compensate them for that expense.

This coverage can also pay for other things, such as legal costs if you’re sued after an accident. And it can cover lost wages for injured parties and funeral costs if someone dies due to injuries from the accident.

Alabama requires drivers to obtain at least $25,000 in bodily injury liability insurance per person and $50,000 per accident.

Property damage liability insurance

You’ll also need property damage liability insurance to drive legally in Alabama. Like bodily injury liability coverage, this insurance offers financial protection if you’re at fault in an accident. It can pay for repairs to another driver’s vehicle after an accident or to an object like a mailbox, lamppost, garage door, or home. 

For instance, if you mistakenly put your car in reverse and back into the side of your friend’s home, your property damage liability insurance can compensate your friend for the damage.

You must have at least $25,000 in property damage liability insurance in Alabama.

Alabama car insurance laws

Alabama state legislators enacted the Mandatory Liability Insurance Law to help ensure the state’s drivers have proper auto insurance coverage.^[2] People who are found driving without proper car insurance are subject to civil penalties, including fines and driver’s license and car registration suspensions. Fines can be costly, totaling over $1,000 for repeat offenders.

Do you need more than state-minimum coverage in Alabama?

Alabama law only requires you to obtain liability insurance, but you may want more coverage depending on your needs and preferences.

Many drivers opt for full-coverage insurance for added protection on the road. A full-coverage insurance policy typically includes bodily injury and property damage liability, collision coverage, and comprehensive coverage.

Full-coverage car insurance often makes sense if you drive a new car and want help paying for any damage to it. Your lender may also require you to obtain full coverage if you’ve financed your vehicle.

People who drive an older-model, high-mileage vehicle might choose a liability insurance policy instead, especially if the full-coverage insurance premiums exceed the vehicle’s total value.

On average, Alabama drivers pay around $156 monthly for full-coverage car insurance. A liability-only policy averages $60 per month, but it also offers less protection.

The cost of liability-only car insurance in Alabama

Drivers who opt for liability-only car insurance in Alabama pay around $60 per month, according to Insurify data. These low rates are offset by the fact that liability-only insurance offers limited protection, only compensating others for their injuries and damages if you’re found responsible for a car accident.

Here’s a look at how much liability-only auto policies cost from different insurance companies.

The cost of full-coverage car insurance in Alabama

Full-coverage car insurance is more expensive than liability only, costing Alabama drivers an average of $156 per month. While it may cost more, it also provides more protection.

For instance, collision insurance can compensate you if your car is damaged in an accident and needs repairs. Comprehensive can cover the cost of fixing your car if it’s damaged due to a weather event, fire, burglary, or theft.

Here’s a look at the full-coverage rates Alabama insurers offer.

Penalties for driving without proof of insurance in Alabama

If you drive without the required car insurance in Alabama, you may be subject to the following penalties:

• Fines: You’ll pay a $500 fine the first time you’re caught driving without car insurance and $1,000 for each subsequent offense.

• Suspensions: Your driver’s license may be suspended for up to six months if you’re caught driving without insurance on multiple occasions.

• Reinstatement fees: You’ll pay a $200 fee to reinstate your car registration after your first offense and a $400 fee for each subsequent offense.^[3]

Optional car insurance coverages to consider

In many cases, you may want more than just minimum liability coverage. Additional car insurance coverage is often a good idea because it provides added protection and more peace of mind.

Here are some optional types of insurance Alabama drivers might consider:

• 

  Collision coverage

  If your car is damaged in an accident, no matter who’s responsible, your collision insurance can pay for the vehicle damage. It can also cover repair costs whether you’re involved in a single- or multi-car accident.

• 

  Comprehensive coverage

  If your car is damaged due to a natural event, like a hailstorm, your comprehensive insurance can compensate you for repairs. It also offers protection from things like fires, fallen tree limbs, burglary, and theft.

• 

  Uninsured/underinsured motorist coverage

  While penalties for being caught without proper auto insurance are hefty in Alabama, that doesn’t mean all drivers have coverage. Suppose you’re involved in a crash with an at-fault driver who’s uninsured. In that case, uninsured/underinsured motorist coverage can compensate you for your car repairs or the cost of medical bills.

• 

  Medical payments coverage

  Medical payments coverage, often called MedPay, can pay for your medical bills after a car accident. It can also cover funeral expenses if you die from your injuries.

Alabama car insurance requirements FAQs