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Mandatory Liability Insurance FAQs
Click on a question below to view the answer.
Are vehicles
registered or operated in Alabama required to be covered by a liability insurance
policy?
What
is the minimum amount of liability insurance coverage
required?
Am I required to carry
proof of liability insurance coverage in my vehicle?
What is considered proof of
liability insurance coverage?
Are there any alternatives to
motor vehicle liability insurance requirements for motor
vehicles?
How do I obtain a motor vehicle
liability bond?
How do I obtain a Cash Deposit Certificate?
I was involved in an
accident. Can the Department of Revenue determine whether or not
the other party in the accident had a liability insurance policy in
force at the time of the accident and provide this information to
me?
How
does the Department of Revenue adminster the liability insurance
law?
Are vehicles
registered or operated in Alabama required to be covered by a liability insurance
policy?
Yes.
No person shall operate, register
or maintain registration of, and no owner shall permit another
person to operate, register or maintain registration of, a motor vehicle designed to be
used on a public highway unless the motor vehicle is
covered by a liability insurance policy.
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What
is the minimum amount of liability insurance coverage
required?
The insurance must provide a
minimum of $25,000 for injury liability for one person in an accident,
$50,000 for all injuries in an accident, and $25,000 for property damage
in an accident (Act 2008-393). The policy must be issued by an
insurance company qualified to issue motor vehicle liability
insurance in Alabama.
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Am I required to carry
proof of liability insurance coverage in my vehicle?
Yes.
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What is considered proof of
liability insurance coverage?
The best proof of liability insurance is
the insurance card issued by the insurance company. The insurance cards
are issued by companies qualified to issue motor vehicle liability
insurance in Alabama, and contain the vehicle year model, vehicle make,
vehicle identification number, name of the insured, the name of the
insurance company, the policy number, and the effective and expiration
dates of the policy. Insurance companies often issued cards two or
more times a year. Motorists must be sure that the insurance card
carried within the vehicle is current.
Other
acceptable documents to prove insurance include:
- A temporary
insurance card issued by the insurer.
- A premium receipt or insurance binder issued
by the motorist's insurance agent.
- The current
declarations page of a liability insurance policy.
- The actual
liability insurance policy issued for the vehicle.
- A
certificate of liability insurance policy issued by either the insurer
or an authorized agent.
- Proof of
purchase of a motor vehicle with the previous 60 days and a valid
insurance card issued for the motor vehicle replaced by such purchase.
The proof of purchase is to be a copy of the bill of sale if the
vehicle is a pre-1975 year model, or the owner's permit (yellow) copy
of the application for certificate of title for a 1975 and subsequent
year model vehicle.
- A copy of
the rental agreement when renting a motor vehicle which specifies the
insurance coverage.
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Are there any alternatives to
motor vehicle liability insurance requirements for motor
vehicles?
Yes. In lieu of liability insurance the vehicle may be covered by a motor
vehicle liability bond or deposit of cash. The motor vehicle liability
bond shall be in the amount of not less than fifty thousand dollars
($50,000). The bond shall be conditioned on the payment of the amount of
any judgment rendered against the principal in the bond or any person
responsible for the operation of the principal’s motor vehicle with his
or her express or implied consent, arising from injury, death, or damage
sustained through the use, operation, maintenance, or control of the
motor vehicle within the State of Alabama. The deposit of cash with the State
Treasurer shall be a sum of not less than fifty thousand dollars
($50,000).
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How do I obtain a motor vehicle
liability bond?
Refer to Regulation 810-5-8-01
for further
information.
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How do I obtain a Cash Deposit Certificate?
Refer to Regulation
810-5-8-02 for further information.
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I was involved in an
accident. Can the Department of Revenue determine whether or not
the other party in the accident had a liability insurance policy in
force at the time of the accident and provide this information to
me?
No. The Department
of Revenue does not maintain a database of insurance policy
information.
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How
does the Department of Revenue adminster the liability insurance
law?
The Department of Revenue randomly surveys vehicle owners to determine if the
owners are maintaining liability insurance. If not, the Department will
suspend the vehicle tag registration. The registration reinstatement fee will
be $100 for the first suspension, and the owner will be required to provide
proof of liability insurance. For subsequent registration reinstatements,
the fee will be $200 after the owner has served a four month suspension
and upon presentation of proof of liability
insurance.
The Department of Revenue will also suspend
the vehicle tag registration of any motor vehicle the driver of which
has been convicted of operating the vehicle without liability insurance coverage,
displaying false proof of liability insurance coverage or failing or
refusing to comply with a request by a law enforcement officer to
display evidence of
insurance.
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