If you own and drive a motor vehicle, you probably have automotive insurance of some variety. Auto insurance is one of the most important things to have if you are even in a motor vehicle accident. What most drivers will not be aware of, however, is that different states have different requirements for minimum auto insurance coverage. This can be especially true if one of the drivers involved in a motor vehicle accident is not from the state.
In Alabama, all drivers are required to have auto insurance, and that insurance must meet certain minimum requirements laid out in statutes. That being said, many drivers will have insurance that provides coverage for things beyond the minimum required by law. Additionally, there are some specific insurance rules for certain types of businesses, like taxi companies or rideshare companies like Uber or Lyft. Finally, there are a handful of exempt entities from Alabama insurance requirements. These mostly apply to vehicles that are from another state or belong to the government.
If you need help with any automotive insurance-related matters, call our Alabama car accident lawyers from Howe Law at (844) 876-4357 to get a free analysis of your claim.
Minimum Auto Insurance Requirements in Alabama
Alabama has mandatory minimum auto insurance requirements that each motorist must meet. These requirements are determined by statute. One of the reasons minimum automotive insurance requirements exist in Alabama is because it helps to guarantee that anyone involved in a car accident will be able to have their injuries covered by insurance. Our Alabama personal injury lawyers can look at your particular accident and figure out whether any drivers involved did not meet the minimum insurance requirements of the state. That may be a fact that can be used against them in court.
We’ll go into the details of Alabama’s minimum insurance requirements below.
Minimum Liability Insurance Requirements
Minimum auto insurance requirements in Alabama are set by Ala. Code § 32-7A-4. In short, no motor vehicle can operate on Alabama roads without being covered by an automobile insurance policy. These policies must have coverage of at least $25,000 for an accident involving one covered person or $50,000 for accidents involving two or more people covered by the policy per Ala. Code § 32-7-6(c). Additionally, these policies must include $25,000 in coverage for damage to property. These insurance policies must be issued by companies that are authorized to do business in Alabama or are licensed with the Department of Insurance. Generally, the latter applies to out-of-state drivers who do not have an Alabama insurance company.
Evidence of Insurance
Drivers in Alabama must also have evidence that they are covered by insurance as laid out in Ala. Code § 32-7A-6. There are many different ways that a driver can prove that they have an auto insurance policy. First, and probably most obviously, you can have an insurance card on your person indicating that you have auto insurance. You can also prove that you have insurance coverage by showing a rental agreement that has the insurance information of the rental company, an Alabama certificate of liability insurance, or other means listed in the statute.
Anyone involved in a car accident in Alabama must present evidence that they are insured to a police officer if they ask for it. Refusing to do this is considered a criminal misdemeanor.
You can show evidence of insurance either in a physical format or electronically, if you have that option available.
Exceptions to Alabama Insurance Requirements
There are some exceptions to Alabama’s minimum liability insurance requirements. These exceptions are detailed in Ala. Code § 32-7A-5.
All trailers are exempt from having automobile insurance in Alabama. This includes commonly owned recreational trailers like those used for camping and storage of boats as well as large trailers like those connected to big 18-wheeler commercial trucks.
Vehicles owned and operated by the Alabama government or the United States government are exempt from Alabama’s minimum insurance requirements.
Any vehicle regulated by the Federal Motor Carrier Safety Administration (FMCSA) is not required to meet Alabama minimum insurance requirements per Ala. Code § 32-7A-5(3). This exception applies so long as the owner/operator of the vehicle has filed evidence of financial responsibility of at least equal coverage to the Alabama requirements, so you should not be concerned if you were hit by a commercial truck that they will not have insurance.
If a vehicle is insured in another state or jurisdiction, it does not need to meet Alabama’s minimum insurance requirements. This will generally apply to out-of-state drivers going through Alabama.
One final exception from the minimum insurance requirements in Alabama is something called “self-insurance.” Self-insuring something essentially indicates that you are foregoing having insurance and are committing to pay for anything that would usually be covered by insurance out of your own pocket. This term is usually used in the context of incredibly wealthy companies for whom it is cheaper to pay for every incident than buy insurance coverage. In an Alabama insurance context, self-insurance is governed by Ala. Code § 32-7-34. Any individual who has more than 25 motor vehicles registered in their name can get a certificate of self-insurance provided that they are financially capable of providing similar coverage to an insurance company should they be liable for someone’s injuries.
Similar to self-insurance, you can also be exempt from Alabama auto insurance requirements by having a bond. An insurance bond is a sum of money you leave with the state treasurer that will be used to pay for any damages that would traditionally be covered by insurance. One way to think of this is as a form of self-insurance where you leave money waiting for when it is needed.
Penalties for Not Having Auto Insurance in Alabama
If you do not have auto insurance in Alabama, there are penalties that can be levied against you. These penalties are outlined in Ala. Code § 32-7A-12. The primary penalty for driving without insurance in Alabama is suspension of your vehicle registration. This will happen even if you obtain appropriate insurance after the fact. To get rid of this suspension, you will need to pay a fee. For first offenses, the fee is $200. For second offenses, the cost goes up to $400. Additionally, your name and other identifying information are placed in a database to track whether you comply with insurance requirements thereafter.
In addition to penalties set by statute, you also put great personal risk on yourself by not having auto insurance or not meeting the requirements. First, insurance protects you in the event that it is determined that you caused an accident. If there is no one to pay for a victim’s damages on your behalf, you can be taken to court and end up needing to compensate the victim or their insurance company yourself. This can be incredibly expensive. Second, If you are injured and want to file a lawsuit, the defense may use the fact that you do not have insurance against you, and that can hurt your case. The bottom line is that it is always better to have insurance than not. It is required by law and always beneficial.
Transportation Network Company Insurance Requirements in Alabama
A “transportation network company” is a company that provides a service to get people from one place to another. Traditionally, this meant taxi-cab companies. At present, this refers to rideshare services like Uber or Lyft. There are specific insurance requirements for these companies under Alabama law laid out in Ala. Code § 32-7C-2.
Drivers for transportation network companies, also called “rideshare companies” need to have special auto insurance that is active when they are working as a driver for their company. This insurance will cover incidents that happen when they are waiting for or transporting a customer but will not cover them in their day-to-day life.
The insurance requirements for transportation network companies are slightly different than those for ordinary drivers. A transportation network company’s insurance must provide coverage in amounts of $50,000 for death and bodily injury per person, $100,000 for death and bodily injury per person, and $25,000 for any property damage. This coverage is required in addition to the minimum requirements discussed earlier. These insurance requirements can be split between the rideshare company and the driver, although these companies generally recommend on their websites that their driver have both kinds of coverage individually.
Optional Auto Insurance Coverage in Alabama
In addition to the minimum auto insurance requirements in Alabama, there are additional policies that cover common types of damage to automobiles that you can have. Our Birmingham car accident lawyers can examine your insurance information or the information of anyone else involved in the accident to determine what kinds of coverage are present. Below are some examples of coverage that is not required by law in Alabama but still can be extremely useful to have on your insurance policy.
Uninsured or Underinsured Motorist Coverage
Uninsured/underinsured motorist coverage is a very common type of coverage present on many insurance policies. This type of coverage protects against accidents where another driver does not have enough insurance coverage – or indeed no coverage at all – to pay for your injuries and damages. In these instances, your uninsured/underinsured motorist policy pays for your injuries since the other driver does not have insurance and would be unable to compensate you.
In some instances where your uninsured or underinsured motorist coverage kicks in, the insurance company may require you to file a lawsuit. This will vary depending on each individual policy, so it is best to talk to our lawyers so we can assess your particular situation.
Comprehensive vs. Collision Coverage
Insurance policies may be a comprehensive policy, a collision policy, or both. As the name would suggest, comprehensive coverage protects you against many things. This type of coverage will pay for damage due to the environment, such as a falling tree limb or hail, as well as if your vehicle is stolen and cannot be recovered. However, comprehensive coverage does not protect against car accidents. That is the purview of collision coverage. Collision coverage protects against damage caused by run-of-the-mill car accidents, as well as single-vehicle incidents like hitting a pothole or impacting a guardrail.
How Alabama Auto Insurance Requirements Matter in Lawsuits
Car accident lawsuits generally happen either when an insurance provider is not happy about paying out an insurance policy after an accident or when a policy does not cover a particular type of damage or set of circumstances in a car accident. Sometimes, insurance proceedings will be amicable and go off without a hitch, while other times, you may have to fight for the compensation you are entitled to.
Alabama is an “at-fault” insurance state. This means that unlike in a “no-fault” state, where insurance will provide coverage for your injuries regardless of who caused the accident, only the insurance of the driver who is “at fault” for the accident is obligated to cover damages. Naturally, insurance companies do not like being told it is their fault, so they may be unwilling to pay out their policies. They could even claim that their client is actually not at all liable for a car accident. Accordingly, you may have to take both the insured driver and the insurance provider to court in order to recover damages.
Out-of-State Insurance in Alabama Auto Accident Lawsuits
If you were driving through Alabama and were involved in a motor vehicle accident, you may be wondering how Alabama’s insurance laws will affect a potential lawsuit you may have. There is a high likelihood that your case will be heard in an Alabama state court because since the accident happened in Alabama, that is where all of the witnesses and important evidence about the accident are going to be.
As long as you have the required auto insurance coverage for the state you live in, you should be able to sue an Alabama driver in Alabama. Do not worry that you do not have Alabama insurance if you are injured in the state and need to file a lawsuit.
Talk to Our Alabama Car Accident Lawyers Today
For assistance with your case, call our Biloxi car accident lawyers from Howe Law at the number (844) 876-4357.