Alabama, which is know affectionately as “Yellowhammer,” is well known within the insurance industry as having the most expensive policies for automobile insurance coverage. In fact, the average auto insurance premium in the state is $573.90 per year. In some cases, auto insurance premiums in Alabama can even be more than $1,000 per year.
In order to determine the amount of the coverage, the auto insurance companies look at the habits of all of Alabama’s drivers, including legal fees and settlement fees. The average is then determined based on the average of all drivers. The individual driving record, city of residents, driving record, and type of vehicle are also considered when determining the rate.
In addition to its high cost, Alabama is a tort state. This means that the driver is held financially responsible for any damage or any injury that he or she causes when in an automobile accident.
As with every state, Alabama requires its drivers to carry liability insurance. In the state, this equates to 20/40/10 coverage. This means that the minimum car insurance coverage a driver can carry is $20,000. Drivers must also carry a minimum of $20,000 in coverage for injuries caused by an accident and must have $40,000 in coverage for all accidents. In addition, Alabama drivers must carry $10,000 in property damage insurance.
The mandatory coverage in Alabama includes Bodily Injury Liability, which is also known as BI. This type of insurance is used when the driver is at fault during an accident and it pays for any injury or death that results from the accident. The minimum coverage in this cases is $20,000 per person with a $40,000 per accident minimum.
Alabama drivers also must carry Property Damage insurance, which is referred to as PD. Property Damage insurance is insurance that is used when the driver is at fault and it pays for the replacement or the repair of property or of the other person’s car. The minimum amount of PD coverage an Alabama driver must carry is $10,000 per accident.
Alabama’s auto insurance laws are quite strict. All vehicles that are registered or that are operated in Alabama need to be covered with liability insurance. In addition, drivers are required to carry proof of their liability insurance coverage. This can be easily accomplished by simply carrying a card that is issued by the auto insurance company. These cards contain several pieces of information, including the model year of the vehicle, the make of the vehicle, the identification number of the vehicle, the name of the person covered by the insurance, the name of the insurance company, the insurance policy number, the expiration date of the policy and when the policy became effective.
In addition to using the insurance card to prove coverage, Alabama drivers can prove their coverage with a temporary insurance card, a premium receipt, an insurance binder, or the current declarations page from the liability insurance policy. Drivers can also use the actual policy to prove coverage or they can show their proof of purchase of a motor vehicle within the past 60 days. When renting a vehicle, the driver must have a copy of the rental agreement showing that the vehicle has coverage.