Key Facts About Alabama Auto Insurance Requirements and Minimums
Like many other states, Alabama requires that anyone who registers or drives a vehicle in their state meet certain financial responsibility requirements in order to drive legally. Two ways some drivers do this is by obtaining either a Motor Vehicle Liability Bond or a Certificate of Cash Bond in the amount of no less than $50,000. But the more traditionl way of proving financial responsibility is to purchase automobile liability insurance from a reputable insurance carrier doing business in the state.
Drivers who just want to meet Alabama’s basic minimum insurance requirements should know that Alabama has 25/50/25 minimums. The first number refers to the $25,000 in insurance coverage required to cover any injury liability that occurs in the event of an accident. The second number refers to $50,000 in coverage for all bodily injuries occuring in the course of one accident. And the third number refers to $25,000 in insurance coverage that is the miminum amount required to cover the property damage that occurs during one accident. Compared with other states, Alabama’s minimum coverage requirements are neither among the lowest or the highest rates established.
Showing Proof of Financial Responsibility
It’s not enough in Alabama to have purchased the minimum requirement of 25/50/25 in liability coverage. Drivers must also carry proof of their insurance coverage in their vehicles at all times. This proof is needed to be shown to the other driver at any accident scene and must be shown to any police official upon request. There are several ways a driver can show proof of insurance. The best and easiest way is to keep a copy of the insurance card they received when they purchased their policy in the glove compartment or sun visor of the vehicle, or the certificate of liability policy they received when they paid their premium. A copy of a liability insurance policy also serves as proof, as does a copy of a Motor Vehicle Bond or Certificate of Cash Bond if the driver choose either of these options rather than traditional liability insurance. If the vehicle has recently been purchased new, a copy of the sales receipt and the insurance card for the old vehicle that was replaced can serve as valid proof of insurance for up to 60 days until a new insurance card has been issued. Drivers who are renting a vehicle should keep a copy of their rental agreement handy to show proof of financial responsibility in the event they are in an accident.
Alabama’s Motor Vehicle Division penalizes drivers caught without proof of financial responsibility by suspending their vehicle registration until they obtain insurance and pay a $100 reinstatement fee. For a second offense, registration tags are suspended for four months and a driver can only be reinstated by purchasing the required liability insurance and paying a $200 reinstatement fee.
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