Car Insurance Legally Required to Carry in Alabama
As of 2025, Alabama car insurance laws require all drivers to maintain at least the state’s minimum liability coverage to legally operate a vehicle. This helps ensure that if you’re at fault in an accident, you can cover injuries or property damage to others. The current minimums are $25,000 for bodily injury per person, $50,000 per accident, and $25,000 for property damage.
- Bodily Injury Liability: $25,000 per person / $50,000 per accident
- Property Damage Liability: $25,000 per accident
This is known as 25/50/25 coverage.
Uninsured/Underinsured Motorist Coverage
Alabama requires insurance companies to offer uninsured/underinsured motorist (UM/UIM) coverage, but you may reject it in writing. This coverage helps protect you if you’re hit by a driver who doesn’t have enough (or any) insurance.
Optional Coverages in Alabama
- Comprehensive Coverage
- Collision Coverage
- Roadside Assistance
- Rental Reimbursement
You have a storm and a tree limb falls on your car, Comprehensive insurance pays. You hit a deer and mess up a bumper, a rock flies up and cracks your windshield, fire damage, just to name a few.
Collision insurance covers your vehicle if you were to hit a stationary object. Your backing up and you back into a post and damage a bumper.
Roadside assistance is just what it sounds like, you run out of gas or have a flat tire.
Covers a rental car while your vehicle is being repaired.
Note: If your car is leased or financed, your lender will require full coverage. This covers the finance company, if your car is damaged and undriveable, you are more likely to not pay.
what Are The Penalties In Alabama For Having No Insurance?
- Fines: $500 for first offense; $1,000+ for repeat offenses
- License and registration suspension
- Reinstatement fees
- Possible vehicle impoundment
- SR-22 filing requirement
which states still use pure contributory negligence and how it affects your ability to recover damages.
Alabama’s Strict Enforcement of Auto Insurance Laws (MLI)
Alabama doesn’t just require you to carry minimum liability insurance—it actively checks to make sure you have it, even if you haven’t driven your car in months.
If your vehicle is registered in Alabama and doesn’t have active insurance on file, you might receive a letter from the state asking for proof—even if the car is parked or broken down.
Why Did I Get a Letter If I’m Not Driving?
Most people assume insurance is only required if you’re on the road. In Alabama, that’s not the case. The moment you register a vehicle, you’re agreeing to keep it insured—whether it’s being driven or not.
Think of it this way: to the state, registration = readiness for road use. If you want to pause coverage, you’re expected to surrender the registration and plate before letting insurance lapse.
What Happens If I Ignore the Letter?
If you don’t respond in time or can’t prove you had coverage, you could face:
- A fine (often $200 for the first offense)
- Suspension of your vehicle registration
- A reinstatement fee to get things active again
In short, ignoring it creates more problems than it’s worth—even for a simple oversight.
But What If I Wasn’t Driving the Car?
If your car was sitting unused—maybe you were storing it for the winter, or it was waiting on repairs—you still need to formally notify the state. There’s a process for explaining that the car was “out of use,” but it must be done quickly and usually involves:
- Surrendering the plate
- Explaining the reason (e.g., mechanical issues, temporary storage)
- Possibly providing proof (like a mechanic invoice or notarized affidavit)
Unfortunately, you typically can’t just say, “I wasn’t driving it.” The state wants documentation and often requires that you acted within a short timeframe after the insurance lapsed.
What If I Sold the Car?
Selling the vehicle doesn’t automatically cancel your registration. If your name is still on file and there’s no insurance showing for that VIN, you’re still responsible—unless you report the sale to the state right away and remove the vehicle from your name.
Real-World Example
Let’s say you canceled your policy to save money while your car sat idle during the summer. Maybe it was in a garage and never touched the road.
Two months later, a letter arrives from the state: they want proof you had insurance on a certain date—or else.
At this point:
- If you can’t prove coverage for that day: you’re paying a fine.
- If you try to claim it was stored: you need to show you surrendered the tag around the same time.
If you didn’t do either, you’re stuck paying and possibly facing suspension.
Takeaway
In Alabama, if your vehicle is registered, it needs to be insured. If you’re not going to drive it:
- Don’t just cancel insurance—also turn in your tag.
- Document everything.
- Respond to any letters immediately.
- ✅ Keep insurance active on any registered vehicle
- ✅ Surrender your tag before canceling coverage
- ✅ Respond quickly to any verification letters
- ✅ Report sold vehicles to the DMV promptly
- ✅ Keep proof of repairs or storage if claiming exemption
🔗 Need to check your status? Visit Alabama’s official MLI portal at
BeSureToInsureAL.com for more information or to respond to a letter online.
Alabama Proof Of Insurance Options
Alabama drivers must present proof of insurance when requested by law enforcement or during an accident. Acceptable proof includes:
- Insurance ID card
- Digital proof via mobile app
- Electronic verification by the Alabama Insurance Verification System (ALIVS)
Frequently Asked Questions about Alabama Car Insurance
Is Alabama a no-fault insurance state?
No. Alabama is an at-fault state, meaning the driver who causes the accident is legally responsible for damages and injuries.
What is uninsured/underinsured motorist coverage, and is it required?
It’s optional but must be offered by your insurer. You can decline it in writing. This coverage helps pay your expenses if you’re hit by someone with little or no insurance.
Can I register a car in Alabama without insurance?
No. Alabama requires proof of liability coverage when registering any vehicle.
Does Alabama require full coverage for financed vehicles?
Not under state law, but your lender will. Full coverage—comprehensive and collision—is typically required for leased or financed cars.
What happens if I drive without insurance?
- Fines of $500+ per offense
- Suspended registration and license
- Reinstatement fees and possible SR-22 filing
- Vehicle may be impounded
How do I surrender my Alabama license plate?
If you cancel your insurance, you must also surrender the tag. Here’s how:
- Visit your local license office
- Bring your tag, registration, and photo ID
- Notify the clerk you’re removing the vehicle from road use
Some counties allow you to mail in your tag. Check with your county licensing office first.
What if I sold my car but didn’t notify the state?
If your name is still tied to the registration and no insurance is on file, you could be fined—even after a sale. Always report the transaction and remove the vehicle from your name immediately.
How do I respond to a letter from the state about no insurance?
You can respond online through the state’s MLI portal. Steps include:
- Check the date listed in the letter
- Gather insurance proof for that date
- If you didn’t have insurance, provide documents (sale, repair invoice, etc.)
- Visit the MLI Online Portal and upload your explanation
What if I missed the deadline to respond to the letter?
Delays can lead to registration suspension and fines. Visit this official FAQ to see your next steps.
Do I need to keep proof of insurance in my car?
Yes. You must present it to law enforcement if asked. Digital proof (like a phone app) is allowed, but traditional ID cards are still valid.
What is an SR-22 in Alabama?
An SR-22 is a form your insurer files with the state to prove you have liability coverage. It’s typically required after serious offenses like driving uninsured or DUI.
How does Alabama’s real-time enforcement (MLI) system work?
Alabama uses an electronic system that matches registered vehicles with active insurance records. If a match fails, the state may send a verification letter—even if you’re not driving the car.
Does Alabama allow a grace period if my insurance lapses?
Alabama does not have a formal grace period. Even a short lapse in insurance can trigger penalties if the state doesn’t see continuous coverage on file. If you’re switching insurers, make sure your new policy starts the same day the old one ends.
What happens if I’m in an accident and don’t have insurance?
If you’re uninsured and at fault in a crash, you can be held personally responsible for all damages, injuries, and legal costs. In addition to fines and registration suspension, you may also face lawsuits from the other party.
I just moved to Alabama. When do I need to update my insurance?
New residents must obtain Alabama auto insurance within 30 days of establishing residency. You’ll need proof of Alabama liability coverage before registering your vehicle or transferring your license plate.
Can I pause my insurance while my car is in storage?
No. In Alabama, a registered vehicle must be insured at all times—even if it’s not being driven. To avoid penalties while storing a vehicle, you must surrender your license plate before canceling coverage.
What kind of proof does the state accept for insurance verification?
Acceptable proof includes a copy of your insurance ID card, declarations page, or an official letter from your insurer showing coverage was active on the date in question. The document must include the VIN, policy dates, and insurer name. Do not send a quote or expired policy.
Final Thoughts about Alabama Car Insurance
When shopping for Alabama car insurance, it’s wise to compare quotes from multiple providers and consider factors like your driving history, credit score, and the type of vehicle you drive. Many insurers also offer discounts for bundling, safe driving, or using telematics apps. Because enforcement is strict—even for parked or non-operational vehicles—it’s critical to maintain continuous coverage or properly surrender your tag to avoid penalties. Understanding Alabama car insurance rules can help protect your driving record and your wallet.
Curious how insurance laws compare nearby? See requirements in
Tennessee,
Mississippi,
Georgia, or
Florida.