Car insurance in Alabama: required coverage, penalties and costs

What Alabama requires you to carry

Every vehicle registered in Alabama must be covered by liability insurance, or by one of the other forms of proof the state accepts, such as a bond or a cash deposit. The policy must be written by an insurer qualified to sell motor vehicle liability insurance in Alabama.

The legal minimum has three parts:

• $25,000 for injuries to or the death of one person in a crash you cause
• $50,000 for all injuries and deaths in that crash
• $25,000 for damage to other people's cars and property

Liability insurance pays other people when you are at fault. It does not repair your own car and it does not pay your own medical bills. That is why many Alabama drivers add collision and comprehensive coverage, and a lender or leasing company will usually require both. Our guide to what liability insurance covers explains the limits in more detail.

Because Alabama is a fault-based state, the driver who causes a crash is responsible for the damage. If the bills are larger than your limits, the injured person can try to recover the rest from you directly.

For example, if a crash you cause leaves another driver with $80,000 of medical bills and your policy has a $50,000 per-person limit, your insurer pays $50,000 and the other $30,000 can be claimed from you.

Uninsured motorist coverage is built in unless you say no

Alabama law requires uninsured motorist coverage to be part of every auto liability policy, with limits at least equal to the liability minimums. The named insured can reject it, and a rejection carries over to later renewals with the same insurer.

Alabama's definition of an uninsured vehicle also covers a driver whose liability limits are too low to pay what they owe you, so the same coverage protects you against underinsured drivers.

This matters in Alabama. The Insurance Research Council estimates that 16.8% of Alabama drivers were uninsured in 2023, compared with 15.4% nationally. If one of them hits you, your own uninsured motorist coverage may be the only reliable source of payment for your injuries. Think carefully before signing a rejection form.

What happens if your car is uninsured in Alabama

The Alabama Department of Revenue runs the Mandatory Liability Insurance program. If it finds that a vehicle was not insured as the law requires, it suspends the vehicle's registration.

To get the registration back you must show proof of current liability insurance and pay a reinstatement fee:

A ticket for driving without insurance can also bring court costs and fines set by the court, and a gap in coverage usually makes your next policy more expensive. See our guides to car insurance lapses and SR-22 filings if you have had a gap or a serious violation.

How much Alabama drivers spend on car insurance

The National Association of Insurance Commissioners (NAIC) reports two averages for every state:

Both Alabama figures are below the national average. The average expenditure works out to about $90 a month. These are averages across all insured vehicles, including people who carry only the minimum, so your own price can be much higher or lower depending on your ZIP code, driving record, age, car and the coverage you choose.

Road risk in Alabama and why it matters for your premium

Insurers price the chance of claims, and crash numbers are one input. According to the Insurance Institute for Highway Safety (IIHS), 962 people died in motor vehicle crashes in Alabama in 2024.

Alabama's death rates per person and per mile driven are both above the national rates, and a larger share of deaths happen on rural roads. Serious crashes produce large liability and medical claims, which is one reason minimum limits can be used up quickly.

Buying a policy in Alabama: a short checklist

1. Start from the legal minimum and decide whether higher liability limits fit what you own and earn.
2. Keep uninsured motorist coverage unless you have a clear reason to reject it, given the share of uninsured drivers.
3. Decide on collision and comprehensive based on your car's value; the deductible chooser helps with the trade-off.
4. Ask each insurer about discounts and compare quotes from several insurers at each renewal.
5. Keep proof of insurance in the car and avoid any lapse, even for a few days.

Neighboring states set different rules. Compare Mississippi, Tennessee, Georgia and Florida, or see every state on the car insurance by state page.