Alabama car insurance rates

Alabama's minimum is 25/50/25: $25,000 for one person's bodily injury, $50,000 for all injuries in one accident and $25,000 for property damage (Ala. Code 32-7-6(c)). The Mandatory Liability Insurance Act, Ala. Code 32-7A-4, applies those amounts to every vehicle registered in the state.

The compulsory requirement is liability security only. Section 32-7A-4 does not require personal injury protection or medical payments coverage. Uninsured motorist coverage must be written into each policy unless the named insured rejects it (32-7-23). Statute text below is from the Code of Alabama as published by the Alabama Legislature, read on 2026-10-22.

Four ways to satisfy Ala. Code 32-7A-4

Alabama accepts more than an ordinary auto policy. Under 32-7A-4 an owner can meet the requirement with any of the following, each at the 32-7-6(c) amounts:

• a personal liability insurance policy from an insurer authorized in Alabama;
• a commercial automobile liability policy;
• a motor vehicle liability bond conditioned on paying judgments arising from use of the vehicle in Alabama;
• a cash deposit with the State Treasurer.

A 2025 amendment (Act 2025-345) recognizes policies from non-admitted insurers placed through Alabama-licensed surplus lines brokers, provided the brokers report the insurance data the state requires. Vehicles registered in another state follow their home state's rules. Owners of more than 25 registered vehicles can apply to the director for a self-insurance certificate instead (32-7-34).

Uninsured motorist coverage and the rejection right

Ala. Code 32-7-23 bars delivery of an auto liability policy for a vehicle registered or principally garaged in Alabama unless it includes uninsured motorist coverage at the 32-7-6(c) bodily injury limits. The named insured may reject it. Once rejected, the same insurer does not have to add it back at renewal unless the named insured asks in writing.

Alabama's definition of an uninsured vehicle also reaches underinsured drivers. Under 32-7-23(b)(4), a vehicle counts as uninsured when the total liability limits available to the injured person are less than the damages that person is legally entitled to recover. The same section caps stacking inside one contract: the primary coverage plus additional coverage for other vehicles, but no more than two additional coverages. The UM/UIM coverage guide explains how stacking works in general.

Online verification, lapses and reinstatement fees

Alabama checks coverage through an online insurance verification system. When the state cannot verify coverage for a registered vehicle, 32-7A-11 requires the department to mail the registrant a notice giving 30 calendar days to prove continuous coverage. Without that proof, the registration is suspended. One exception covers a car that was stored, inoperable or unused, and it can be claimed only once per registration period. The owner must surrender the plate within 30 days, and the car cannot have been in an accident or cited during the lapse.

Roadside, 32-7A-16 makes driving without coverage a Class C misdemeanor. If a driver stopped or in a crash cannot show registration and insurance, the vehicle cannot keep going. On a first violation within a two-year registration period the officer has it moved to a safe place; on a second it is towed at the owner's cost; on a third it is impounded until coverage is in place and the fees are paid.

Accident suspensions and proof of financial responsibility

A separate track applies after a crash with injury, death, or more than $500 of damage to one person's property. If the director has no evidence of a release or other settlement 20 days after the accident report, Ala. Code 32-7-6 has the director set a security amount. Within 60 days of the report, the director suspends the license and registrations of an uninsured operator or owner who does not deposit it, with at least 10 days' notice. A driver who had a liability policy in effect at the time of the crash is exempt, and no reinstatement fee applies once that is documented.

When proof is required, the insurer can file a certificate showing the policy is in effect, or the proof can be verified through the online system (32-7-20). An insurer cannot cancel a certified policy until 10 days after filing a cancellation notice with the director (32-7-24). If the proof stops meeting the requirement, the director suspends the license and registration until new proof is filed (32-7-30). Section 32-7-31 sets the exit at three years from the date proof was first demanded; the filing can end then provided the director's records show no suspension-level conviction or forfeited bail during that span. See the SR-22 guide for how insurer filings like this work.

Alabama Automobile Insurance Plan

Ala. Code 32-7-35, rewritten by Act 2024-38, has the Commissioner of Insurance approve the Alabama Automobile Insurance Plan for applicants who cannot get a liability policy through ordinary methods. Every insurer authorized to write auto liability coverage in Alabama must subscribe. A governing committee approved by the commissioner runs the plan and may authorize service providers to issue policies in the plan's name and handle claims. A plan policy counts as proof of financial responsibility and of insurance under Chapters 7 and 7A.

An applicant or plan policyholder can appeal a governing committee ruling to the commissioner. Anyone aggrieved by the commissioner's order may petition the Circuit Court of Montgomery County within 10 days of notice. The committee must file an audited financial report with the commissioner every year.

Filing a complaint with ALDOI

The Alabama Department of Insurance asks consumers to contact the insurer or agent first, then use its online consumer complaint form or a PDF version. The department forwards the complaint, and the company or producer must respond to it. ALDOI says it will require corrective action when a company has not met its legal obligations. It also lists what it cannot do: it does not decide fault, value a claim, settle factual disputes between parties, or assist once the consumer has an attorney. Its phone line is 334-241-4141.

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