Choosing the minimum amount of liability coverage in Alabama will save you the most money on your car insurance premiums, but it could end up costing you a lot more if you get into an accident. Here’s why:

Liability insurance won’t pay for your own costs after an accident. Liability insurance exists to protect you from a lawsuit after an accident—it only pays for damages to the other party. You’ll have to add optional protection if you want your own vehicle repairs and medical bills to be covered.

The state minimum might not cover all damages. According to the Insurance Information Institute (III), the average bodily injury insurance claim after an accident was $22,734 in 2021, and the average property damage claim was $5,3142. While the average accident would be covered by Alabama’s minimum liability, a serious accident could easily surpass that.

You could face a lawsuit if you cause more damage than your insurance pays for. If you crash an expensive car or cause someone to suffer serious injuries or death, you’ll quickly max out your liability coverage. The other party could take you to court, leaving you to pay additional damages, court costs, and lawyer fees out-of-pocket.

It’s almost always a good idea to supplement your policy with additional coverage.

At a minimum, increase your liability limits—you’ll be better protected from a lawsuit after an at-fault accident, and it usually only raises your insurance rates by a few extra dollars a month.

Josh Damico

Vice President Insurance Operations

I recommend at least $100,000/$300,000 of liability coverage, but you may need more coverage depending on your financial situation.

To ensure your own repair costs and medical bills are covered after an accident, consider adding coverage like physical damage protection (collision and comprehensive) and MedPay to your auto insurance policy.

You can use the

Jerry

app to customize your car insurance coverage levels when you shop for quotes, so it’s easy to see exactly what your insurance costs would be if you increased your liability or added protection for your own vehicle.

It’s never been faster to see what you’ll pay for more coverage.

Jerry

helps you compare quotes from multiple carriers in seconds, and makes it easy to adjust your coverage levels right in the app.

If you lease or finance your vehicle, your lienholder will require you to add collision and comprehensive coverage to your insurance policy—and maintain it until the lease is finished or the loan is paid off.

Average cost of car insurance in Alabama

As of May 2023, the average cost of a full-coverage car insurance policy in Alabama was $2,092 per year. For minimum coverage liability car insurance in Alabama, you’d pay about $1,340 per year or about $112 per month.

Remember: Average car insurance rates can’t give you much of an idea of what you’ll pay for your own policy. Car insurance companies use various factors to calculate rates, so yours will vary based on your age, gender, location, driving record, vehicle make and model, coverage needs, and more.

Request quotes, then browse different levels of coverage all on one screen.

You’ll see options for state minimum coverage, minimum liability plus full coverage, and high liability plus full coverage.

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Optional coverages in Alabama

Here are some additional types of auto insurance coverage you can add to your policy in Alabama:

Collision insurance

: Collision coverage helps pay to repair or replace your vehicle after a collision with another vehicle or object.

Comprehensive insurance

: Comprehensive coverage helps pay to repair or replace your vehicle after non-collision-related damages like theft, vandalism, severe weather, or falling objects.

Rental reimbursement

: If your car is damaged in a claimable loss, this will help you pay for a rental car while your vehicle is being repaired or replaced

Towing & labor

: Sometimes called roadside assistance, this will help if you have a minor emergency in your vehicle—like if you run out of gas, need a jumpstart, have a flat tire, or lock your keys out of your car.

Gap insurance

: If you total a financed vehicle and you owe more than the actual cash value (ACV) of your car, gap insurance will cover the difference.

Uninsured/underinsured motorist bodily injury coverage (UMBI/UIMBI)

: Helps pay for medical expenses for you and your passengers if you’re in an accident with an uninsured driver, or if the other driver’s liability limits don’t cover all of the costs.

Medical payments (MedPay)

: MedPay helps pay for medical expenses up to your coverage limits for yourself and your passengers after an accident, regardless of fault. It can not be combined with family compensation coverage.

Family compensation: Family compensation is similar to MedPay, but it may cover additional expenses, like an extended hospital stay. It cannot be combined with MedPay coverage

Some types of coverage, like collision and comprehensive insurance, will require you to pay a deductible before your insurer will cover the remaining damage.

Penalties for driving without insurance in Alabama

If law enforcement discovers that you’re

driving without insurance

in Alabama, the penalties could include: 34

Up to a $500 fine

Suspension of your motor vehicle registration for 45 days, with a $200 reinstatement fee

For a second offense, you could face:

Up to a $1,000 fine

Suspension of your motor vehicle registration for 4 months with a $400 reinstatement fee

Driver’s license suspension for up to 6 months

Subsequent offenses could lead to jail time and an

SR-22 requirement

FAQs

What are Alabama’s minimum car insurance requirements?

Alabama mandatory liability insurance law requires drivers to carry $25,000 of bodily injury liability per person, $50,000 of bodily injury liability per accident, and $25,000 of property damage liability per accident.

What are the Alabama auto insurance requirements when you buy a car from a dealer?

You’re required to carry insurance that meets Alabama’s minimum liability limits, and if you finance your vehicle, your lender may require you to carry comprehensive and collision coverage.

Can you show digital proof of insurance in Alabama?

Yes, you can use a digital ID card as proof of insurance in Alabama, as long as it shows the current effective date and policy number, your insurer’s NAIC number, and your car’s VIN.

Is Alabama a no-fault state?

No, Alabama is an at-fault state, meaning you are financially liable for any medical expenses incurred by others due to a car accident that you caused

SOURCES

https://www.aldoi.gov/consumers/AutoFAQ.aspx

https://www.iii.org/fact-statistic/facts-statistics-auto-insurance

https://www.revenue.alabama.gov/ultraviewer/viewer/basic_viewer/index.html?form=2022/02/MLI-Instructions-and-Appeal-Rights.pdf

https://www.revenue.alabama.gov/ultraviewer/viewer/basic_viewer/index.html?form=2022/04/BSTI-Brochure-2017-1.pdf