If you plan to register and operate a vehicle in Alabama, you must also plan to meet the state’s financial responsibility requirements to prove you’re financially covered in the event your vehicle is involved in an accident; otherwise, you can’t legally operate the vehicle on public roads.

Ways to Establish Financial Responsibility

To meet financial responsibility requirements, many vehicle owners choose to purchase liability coverage from carriers licensed to sell insurance in the state; however, you can also obtain proof of financial responsibility when you:

• Obtain a Motor Vehicle Liability Bond for no less than $50,000.

• Obtain a Certificate of Cash Bond for no less than $50,000.

Alabama Liability Insurance Requirements for Private Passenger Vehicles

If you choose to purchase traditional liability coverage from an insurance carrier rather than obtain a Motor Vehicle Liability Bond or Certificate of Cash Bond, your policy must include:

• $25,000 injury liability for one person

• $50,000 for all injuries in one accident

• $25,000 property damage in one accident

Purchasing basic liability coverage ensures you’re meeting the state’s minimum financial responsibility requirements, but there are many other kinds of coverage available to help you further protect yourself and your vehicle.

Proof of Insurance and Financial Responsibility

You must carry proof of insurance in your vehicle at all times. There are several ways you can show proof that you’re meeting the state’s financial responsibility requirements:

• An insurance card, premium receipt, binder, declarations page, or a certificate of liability policy from your provider.

• A copy of your liability insurance policy.

• A copy of the proof of vehicle purchase and the old insurance card for the vehicle your purchase replaced (only valid for 60 days after purchasing the new vehicle).

• A copy of the rental agreement if you’re renting the vehicle.

• A copy of your Motor Vehicle Liability Bond.

• A copy of your Certificate of Cash Bond.

Penalties for Failure to Maintain Financial Responsibility

The Motor Vehicle Division (MVD) can suspend your vehicle’s tag registration if you fail to maintain financial responsibility. The steps to reinstate the registration depend on the offense number:

• First Offense: You must obtain and provide proof of liability insurance and pay a reinstatement fee of $100.

• Second Offense: Your registration will stay suspended for four months, you must obtain and provide proof of liability insurance, and you must pay a reinstatement fee of $200.

Need more information about the state’s financial responsibility requirements, penalties for no proof of insurance, and how to reinstate your vehicle registration? Contact the MVD at (334) 242-3000.