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Alabama Car Insurance

When driving a State of Alabama registered vehicle, insurance is required.
Alabama minimum car insurance requirements are:

  • Auto Insurance policy with limits of at least 25/50/25:
    • Liability coverage
    • $25,000 of bodily injury to another person
    • $50,000 of bodily injuries to all other persons
    • $25,000 of injury to or destruction of property of others in any one accident

Although personal injury protection is not required by the state of Alabama, many drivers choose to purchase it in order to cover any expenses they may accumulate from an accident.

Alternative Options to Insurance:

Self Insurance Certificates are available in Alabama if the following requirements are met:

  • You or your company must have at least 26 registered vehicles
  • You must qualify by application through the Director of Public Safety of the State of Alabama:
    • Driver License
    • Department of Public Safety
    • P.O. Box 1471
    • Montgomery, AL 36102-1471

In Alabama, you have the option to use a liability bond or cash deposit instead of insurance if the following requirements are met:

  • Liability bond for at least $50,000
    • Bond must be filed with the Department of Revenue’s Motor Vehicle Division
  • Cash deposit of at least $50,000
    • Cash must be deposited with the Alabama State Treasurer

Required Proof of Insurance in Alabama

Insurance Card provided by Insurance company, including all of the following:

  • Name of Insurance Company
  • Insurance Policy Number
  • Effective Date/Expiration Date of Policy
  • Year, make/model, and vehicle identification number of registered vehicle
  • Name of Insured Driver

Self Insurance certificates are issued by the state and must include the following:

  • Certificate Number issued by Department of Licensing
  • Effective Date of Certificate
  • Accurate description of year, make/model of registered vehicle
  • Name of driver covered by certificate

Certificate of Deposit must include the following:

  • Certificate number issued by State Treasurer
  • Name of driver covered by certificate of deposit

Liability Bond must include the following:

  • Name of company issuing bond
  • Bond number
  • Name of driver covered by bond

Alabama State Department of Insurance
Office of the Insurance Commissioner – Jim L. Ridling
201 Monroe St., Ste. 1700
Montgomery, AL 36104

Obtaining a Driver License

Here are the requirements to obtain your learner’s permit (Stage 1 license):

  • Be at least 15 years old
  • Pass the written examination based on the Alabama Driver Manual
  • Drivers with a learner’s permit must be accompanied by a licensed driver who is at least 21 years old riding in the front seat of the vehicle at all times
  • Exam fee of $5
  • Learner’s permit fee of $23.50 (subject to change)

Here are the requirements to obtain your restricted license (Stage 2 license):

  • Be at least 16 years old
  • Have permission from parent or legal guardian to drive unsupervised
  • Complete a State Department of Education approved driver education course or at least 30 hours of driving with parent or legal guardian or certified driving instructor
  • Pass a road skills examination based on the Alabama Driver Manual
  • Restricted license fee of $23.50 (subject to change)

Here are the requirements to obtain your unrestricted or regular license (Stage 3 license):

  • Be at least 17 years old
  • Have a restricted license for at least six months
  • Restricted license fee is $18.50 (subject to change)

To apply for a driver license, visit your local DMV and bring the following:

  • Photo-identification
  • Your social security card
  • School enrollment form or proof of graduation
  • Certificate of Completion from a certified driver education course or proof of at least 30 hours of driving practice
  • Enough cash to pay for the fee, checks and credit cards are not accepted at most locations
  • If you are going to take the driving test, you must be accompanied by a licensed driver and have an insured and registered vehicle

Here are the requirements to obtain your first license for residents over the age of 18:

  • Complete a driver license application
  • Pass knowledge test (must complete before scheduling driving test)
  • Pass vision screening and color recognition test
  • Pass driving test

Completing Driver Education

When a person reaches the age of 15, they may enroll in a Driver Education Program. To be eligible, a student must have the following:

  • A completed Form DL1/93
  • High school diploma, GED certificate, or certificate of graduation from high school

To complete a program, a student must meet the following:

  • A total of 30 hours of classroom instruction
  • Behind-the-wheel training
    • This is based on performance, not time. You must successfully master nine areas in order to pass. There is not a required number of hours, just a recommended minimum of 6 hours of behind-the-wheel training

It is recommended that you research any driver-training program that you enroll in. You want to make sure they meet the following standards:

  • Instructors are licenses and have certificates from the State of Alabama
  • They meet the state curriculum requirements
  • Check if they have received any disciplinary action for violations
  • Make sure there are enough instructors to meet student needs

You can also check if your student’s school offers any driver training programs. These programs meet the state requirements and have licensed instructors.

Knowing the Rules of the Road

Alabama provides their rules of the road online. Carefully obey these rules to quality for the lowest possible car insurance rates. A complete list is available in Code of Alabama Section 32-5A:

  • Obedience to Police and Firefighters — 32-5A-4
  • Highway markings and traffic-control devices — 32-5A-30 to 32-5A-37
  • Unattended vehicles — 32-5A-50
  • Obstructed view — 32-5A-53
  • Emergency vehicles — 32-5A-58 to 32-5A-58.2
  • Passing and overtaking vehicles — 32-5A-81 to 32-5A-86
  • Following too closely — 32-5A-89
  • Right-of-way — 32-5A-110 to 32-5A-116
  • Turning, starting, and stopping — 32-5A-130 to 32-5A-139
  • Speed restrictions — 32-5A-170 to 32-5A-178
  • School zones — 32-5A-180 to 32-5A-186
  • Reckless driving — 32-5A-190
  • DUI — 32-5A-191
  • Pedestrians’ rights and duties — 32-5A-210 to 32-5A-222
  • Motorcycles — 32-5A-240 to 32-5A-245

There are three general insurance coverage markets that the residents of Alabama fall into: the preferred market, available for low-risk drivers with spotless driving records and offers the lowest premiums; the standard market, which is offered to the average driver with a fair driving record; and the non-standard market, available for less-experienced drivers and those with multiple traffic tickets or accidents, as well as those who have at least one drunk driving offense. This offers the highest premiums. This means that to enjoy the lowest auto insurance rates in Alabama, you should try to fall into the preferred market.

Know Your Rates

When calculating auto insurance rates, or trying to get an accurate Alabama car insurance quote, all of the licensed drivers in the household, even if they are not related to you by blood, such as permanent roommates and spouses, are taken into consideration. The base rate that is used to evaluate all drivers is then adjusted, according to several factors, including:

  • Gender. Statistical evidence shows that males younger than 25 are involved in more accidents than women in the same age group. Because of this, male drivers typically must pay higher insurance rates than female drivers.
  • Age. Statistics suggest that drivers under the age of 25 are involved in more accidents than those between 25 and 65 years old. For this reason, drivers under 25 years old are considered a higher risk, resulting in higher insurance rates for a household with one or more drivers in this age group.
  • Marital status. According to statistics, married couples tend to have far fewer accidents than those who are unmarried, so married couples may be offered a the best car insurance rates in Alabama when shopping around.
  • Driving record and claims history. The more accidents, tickets, and insurance claims you have, the higher risk you are to insure, so those with poor driving records will see higher insurance rates.
  • Geographical area. Those who live in a part of town where the crime rate is higher will likely see higher insurance rates. Similarly, those who live in an area that experiences regular traffic collisions will experience higher insurance rates because they will be more likely to damage their vehicles than those living in less hazardous areas.
  • Credit history. Simply put, the better your credit score, the less your insurance rate will be. The main reason insurance companies look at your credit history is to determine the likelihood that you will make your payments.
  • Make, model, and year of the vehicle. The general rule of thumb is that insurance rates go up with the cost and performance level of the vehicle due to the fact that expensive, high-performance vehicles are more likely to be stolen.

Lower Your Rates

An insurance agent will be able to tell you exactly what your insurance plan will cover for the price you are paying. This will help you to make sure you are getting the best price for the best coverage, not just settling for the cheapest plan that may not offer much. Talk to different companies, shop around, and compare prices to find the best car insurance rates in Alabama. When you are considering a company, remember to make sure the company is permitted to do business in Alabama. If you are suspicious about any insurance company, call the Alabama Department of Insurance at 334-269-3550. In addition, if an agent or company attempts to sell ERISA or union plans, contact the Alabama Department of Insurance to report the activity.

Insurance companies often offer discounts that are not advertised, such as discounts for young drivers with good grades, drivers who have completed a driver’s education course, drivers with a history of accident-free driving, and mature driver discounts for senior citizens. Remember to ask each company about any discounts when shopping around so you can increase your chances of finding affordable auto insurance in Alabama.

Also, pay close attention to your other insurance plans, such as medical insurance, which can overlap in coverage areas with your auto insurance plans.

Picking an Insurance Agent/Broker

Insurance agents work for insurance companies and earn commission based on their sales. Insurance brokers, on the other hand, do not represent an insurance company. Instead, they work with individual clients, assessing their clients’ needs and finding different insurance companies and policies to fit those needs. Insurance brokers also receive a commission for the sales they make from different insurance companies.

Before you choose to use an insurance agent or broker, make sure they are licensed with the Department of Insurance. In addition, you can request information on agents and brokers from the Department of Insurance.

The Department of Insurance also provides consumers with a list of current insurance companies. If you have had issues with an insurance company, file a complaint online. If you would like to file a complaint against a particular agent or broker, you may do so online as well. The Department will investigate the matter and get back to you if any formal disciplinary actions will take place. The Department of Insurance suggests that before you file a complaint with them, you should contact the offending company, agent, or broker first in an attempt to resolve the issue.

The Alabama Department of Insurance offers smart shopping advice for consumers looking to purchase insurance.

After an Accident

Accidents are common and nearly everyone is involved in one eventually. If you have been involved in a collision resulting in the injury or death of someone, you must immediately notify the Alabama State Patrol, city police, or county sheriff. If you or someone else is injured, you may request emergency medical services at that time. Those involved in the accident should exchange names, addresses, and vehicle registration numbers. Aid should be rendered to anyone injured during the accident. Drivers should stay at the scene of the collision until released by a police officer. To expedite procedures, be prepared to give a thorough account of the events leading up to the collision to responding law enforcement members, and also take down information such as the names of the police officers and witnesses you spoke with for your own accident report. Failure to deliver an accident report in cases involving property or vehicle damage is considered a Class A misdemeanor. Failure to deliver an accident report in cases involving injury or death is considered a Class C felony.

In addition, you must also report the incident to your insurance company as soon as possible. Your insurance company will have procedures for filing a claim that you can follow. If your collision involved another driver, you must obtain their name, address, phone number, insurance information, driver’s license number, and the make and model of the car they were driving during the collision. You should also provide the driver(s) with your information. When authorities arrive on the scene, be prepared to report how the accident happened, what occurred during the accident, the extent of the damage to all vehicles involved, and the names and contact information of any witnesses. Any police report filed must also be copied and sent to your insurance company.

When all of your information has been received, your insurance company will investigate your claim within 30 days. Your claim will be paid within 15 days of the settlement papers being signed. If your claim is delayed, the insurance company must notify you every 30 days until it is processed. In the event that your claim is denied, your insurance company will notify you in writing.

When the other party was at fault for the accident and you had to use your insurance to cover your expenses, your insurance company may also seek subrogation in order to recover the money. Your insurance will cover the costs of any medical or repair bills you had, but your insurance will then reach out to the at-fault driver’s insurance company for compensation. You should provide your insurance company with full cooperation during this process to ensure that this process goes smoothly. If you intend to settle with the at-fault driver or their insurance company, be sure to notify your insurance company.

Insurance for High-Risk Drivers

If your driving record is bad enough, it may prevent you from receiving insurance coverage, especially if you have a lengthy history of accidents, tickets, or drunk driving. But it is worse to have no car insurance in Alabama than being an insured, high-risj driver. In fact, the state of Alabama makes it possible for nearly every driver to find insurance opportunities through the Alabama Automobile Insurance Plan. This plan is designed to help all eligible people to obtain insurance.

If you are caught driving without insurance, caught driving under the influence, cause an accident without insurance, have too many traffic violations and tickets within a short time span, or have had your license suspended or revoked, you may also be asked to provide a SR-22 form for the Department of Motor Vehicles. Your insurance company should do this for you, but not all companies provide this service.

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