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.

What is the minimum amount of liability insurance coverage required?

The insurance must provide a minimum of $20,000 for injury liability for one person in an accident, $40,000 for all injuries in an accident, and $10,000 for property damage in an accident. The policy must be issued by an insurance company qualified to issue motor vehicle liability insurance in Alabama.

Am I required to carry proof of liability insurance coverage in my vehicle?

Yes.

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.

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).

How do I obtain a motor vehicle liability bond?

Refer to Regulation 810-5-8-01 for further information.

How do I obtain a Cash Deposit Certificate?

Refer to Regulation 810-5-8-02 for further information.

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.

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.

Source: Alabama Dept of Revenue - Motor Vehicle Division