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Alabama Car Insurance Rules and Regulations

Alabama car insurance rules and regulations are set into place by Alabama state law and administered by the state Department of Revenue to regulate insurance and set standards for every driver. The state requires auto insurance, as does nearly every other state across the country. The state of Alabama uses the split form model for auto liability coverage, a coverage that is required for every driver. Drivers in the state are expected to comply with auto insurance law, or face penalties put into place by state auto insurance law administered the Department of Revenue.

Alabama Requires Auto Liability Insurance

The state of Alabama requires auto liability insurance for all drivers. Split form liability coverage is in use by the state, as opposed to the single form which some states use. The split form is divided into three parts. Each part covers a specific aspect of the financial cost of dealing with a liability accident. In other words, drivers' liability policies only get used when they are at fault in car accidents. When the other driver is at fault, that driver's insurance takes care of the charges. The use of the liability policy is dependent upon fault in the accident.

The minimum requirements for split form liability coverage is 25/50/25 [1], numbers expressed in thousands of dollars. The first two parts of the policy deal with the costs of bodily injury while the third is set aside for paying for property damage. The bodily injury coverage in an Alabama split form policy itself is divided into two sections because each part has its own limit of coverage and deductible, which keeps the cost of the policy lower for covered drivers in the state.

Bodily injury liability is divided into single victim or multiple victim single occurrence coverage. Each of these two parts has their own limits and deductibles. The single victim limit is for accidents when the other vehicle has only a driver and no other passengers (or when the liable driver hits a pedestrian or bicyclist). The multiple victim part is used when more than one injured victim is involved in the accident, such as when the liable driver hits a carload of passengers or when more than two cars are involved in the accident.

Consequences of Lack of Insurance

The Department of Revenue in the state of Alabama does not have provisions like some states to constantly monitor a registration database and compare it against insurance records. What it does instead is do random insurance checks. These are in addition to opportunities law enforcement officials have to cite motorists for lack of coverage when they pull them over for traffic offenses. The Department of Revenue does these random checks in surveys, and it suspends the registration of those who do not have any liability insurance on their vehicles.

This suspension can be lifted by the driver getting creditable coverage and presenting proof of that coverage to the Department of Revenue and paying a $100 reinstatement fee. For subsequent violations a driver has to pay a $200 fee for reinstatement after serving a four month registration suspension [1]. These rules and punishment methods are set into place to deter drivers from driving without auto insurance by making it potentially expensive not to insure a vehicle. Many drivers who go without insurance do so for financial reasons, so this punitive part of the law levels the playing field a bit and deters financial motivation for failure to carry insurance.

Additional Options for Alabama Drivers

Liability protection is the only type of coverage required by the state of Alabama, but there are other optional forms of coverage an Alabama motorist could add to their policy. As a covered driver in the state, you could choose to add collision and comprehensive insurance to insure your own vehicle against property damage, for example. Uninsured and underinsured motorist protection could be added to protect against other drivers who do not carry insurance on their cars. And drivers can also choose to include medical payments coverage on their policies. This coverage insures passengers in the covered vehicle against the financial cost of medical care stemming from injuries sustained in an accident in that vehicle.

Drivers in the state of Alabama are legally obligated to abide by rules and regulations set into place governing auto insurance in the state. Those who wish to self insure their cars can do so by having a bond or cash deposit in the amount of $50,000 with the State Treasury [1], money which would be specifically set aside for dealing with the cost of a liability car accident. It is good to know your options as a driver in the state so that you can make informed choices about your insurance.

[1] http://www.ador.state.al.us/motorvehicle/mli_faq.html#mli1 Retrieved 2010-03-14.

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