Alabama has a series of laws that apply to auto insurance. When drivers fail to acquire the necessary insurance or allow their coverage to lapse, the consequences could be significant, including fines and the suspension of your driving privileges. Insurance companies in Alabama are required to report all new car insurance policies, and lapses and cancellations in auto insurance policies. This is done in real-time via electronic reporting.
What Are the Mandatory Car Insurance Requirements in Alabama?
Alabama law requires a minimum level of liability insurance coverage for every driver. Drivers are required to carry at least:
- $25,000 in bodily injury/death coverage per person
- $50,000 of bodily injury/death coverage per accident
- $25,000 of property damage per accident
These are only the minimum levels of coverage required by law. You are free to purchase additional coverage to ensure you are never left personally liable for an accident.
A minimum level of liability insurance is important given that Alabama is an “at-fault” state. In an at-fault state, drivers who are responsible for an accident are required to pay for any damages. Liability insurance protects you from third-party claims, covers those losses, and provides you with legal counsel if a lawsuit is brought against you.
It is important to remember that only liability insurance is mandatory. While insurance companies offer an array of helpful products other than liability coverage, these policies are never required under the law. Some popular types of voluntary policies include medical payments, uninsured motorist, and collision coverage.
What Is the Penalty for Driving Without Insurance in Alabama?
Alabama law treats driving without insurance seriously. Even first-time offenders face serious consequences. For a first-time offense, a conviction could result in up to three months in jail, a fine of no more than $500, and a 45-day suspension of your vehicle registration.
The penalties are steeper for second and subsequent offenses. A fine could run as much as $1,000 and your driving privileges could be suspended for up to six months. You also face the possibility of up to six months in jail.
The good news for drivers who had insurance but simply failed to provide proof is that these charges are often dropped or reduced with evidence of coverage at the time of the ticket.
What Factors Does Alabama Law Allow in Determining Your Premiums?
Insurance companies in Alabama use a variety of factors to set premiums. These factors have been found to play a part in how responsible a driver may be behind the wheel. Some of these factors include:
- Marital status
- Credit history
- Driving record
Some of these factors could balance out to result in a lower rate. For example, younger drivers face higher car insurance rates in general, but a clean driving record could help them lower their premiums.
Am I Required to Report an Accident in Alabama to Authorities?
You are required to report an accident to the police in Alabama under most circumstances. Any time there are bodily injuries involved in an accident, the law requires that you notify the police right away. The same is true for accidents involving serious property damage. Collisions with injuries and only minor damage do not have to be reported to the authorities.
The threshold for minor damages is $250. This is important, as even minor body damage to a vehicle could cost more than $1,000 to repair. The reality is most cars that sustain notable damage in an accident will require more than $250 to fix.
Reporting an accident to the police can protect you and your legal rights after an accident. Because Alabama is an at-fault state, it is important that you get the facts of the accident in the police report.
There is another step to consider when it comes to reporting an accident. Even in cases where you do not have to report an accident to the police, your policy language likely requires that you report your accident to your insurance company. Reporting an accident to your insurer as soon as it happens could help protect your right to file a claim. This is because the terms of your insurance policy likely require you to report every accident, even if you have no plans to file a claim. The failure to report your accident to the insurance company could have serious consequences, including denied claims or even revoked policies.