Alabama Hikes Penalty for Driving Without Insurance

August 2, 2011

Alabama drivers are facing stiffer penalties for failing to have liability insurance under a bill recently signed into law by Gov. Robert Bentley.

In 2001, state lawmakers required all state drivers to carry motor vehicle liability coverage. However, drivers purchasing or renewing a tag didn’t have to show proof of insurance, but could instead sign a document attesting to the fact they had the coverage.

Under the new law, persons found to be driving without carrying liability coverage must pay a $200 fee and show current proof of insurance. Any subsequent failure to have the coverage results in a $400 fine and a four month suspension of their car registration. The only exception is for first time offenders who have the coverage but did not produce the necessary proof of insurance when stopped by a police officer. In those cases, the person must report to the local tag office and provide proof of coverage, in which case the ticket will be dismissed.

The current liability coverage minimums are 25/50/25/: $25,000 for death or bodily injury sustained by one person, $50,000 to cover fatalities or bodily injuries suffered by two or more people, and $25,000 for damages or destruction to another’s property.

The law does exempt some vehicles such as government vehicles, trailers, cars covered under a dealer’s blanket coverage, and self-insured motor pools with 25 or more vehicles.

In addition to the fines and other changes to the motor vehicle liability law, lawmakers also set up a process whereby state and county officials have instant access to a driver’s information through an electronic database by 2013.

The Alabama Insurance Institute estimated that between 25 and 28 percent of all state drivers fail to carry the mandatory liability insurance.

The Alabama Advisory Council for Motor Vehicle Liability Insurance has been charged with establishing the regulations for the database. The council is made up of state Department of Insurance members, officials from the state’s Department of Public Safety, and representatives from various auto insurers.

The Insurance Industry Council on Motor Vehicle Administrators is expected to maintain the electronic database, a role it plays in other states.

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