Understanding Alabama Car Insurance Laws

In the state of Alabama, car insurance works similarly to many other states around the country; however, there are some states where car insurance laws vary, so it’s essential to be aware of each state’s specific policies. 

A woman living in Birmingham, for example, had just moved from Florida when she got into a car accident. Florida works on a no-fault insurance system, which is different than Alabama’s fault system. When she got into the crash, she had no personal injury protection (PIP) insurance like she was required to have in Florida. In order to get compensation for her injuries, she had to hire a Birmingham car accident lawyer.

While this sounds like a negative aspect of Alabama’s system, the woman from Florida ended up being pleasantly surprised by the outcome of her situation. Because she hired a lawyer and had to hold the other driver liable in a lawsuit, she ended up receiving a large settlement in her car accident case. In Florida, only eighty percent of the woman’s medical expenses would’ve been covered by PIP. 

Alabama Mandatory Liability Insurance Law

Alabama requires drivers to have liability car insurance coverage. This coverage doesn’t cover personal injuries, but it does cover injuries to other drivers and property when you cause an accident. The minimum requirement in Alabama is $25,000 for bodily injury to one person, $50,000 for bodily injury to two or more people, and $25,000 for property damages in any accident you cause. 

You can choose to carry more coverage or purchase separate personal injury protection if you desire, but this is the minimum requirement statewide.

Fault-Based Insurance System

The fault-based insurance system means that, once the above coverage is used up, you’re personally responsible for any damages you’ve caused in an accident. Other parties involved in the accident have the right to file a personal injury lawsuit against you, and if other parties caused your injuries, you have the right to file against them as well.

In no-fault insurance states, there are only certain circumstances in which personal injury claims can be filed. Many drivers in the state of Alabama see the at-fault system as a benefit because it allows them to seek the compensation they deserve when they get injured in an accident. The fault-based insurance system also saves them money on buying the personal injury protection insurance that no-fault states require.