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Important Notice Concerning Mandatory liability Insurance Law provided by OVIS

In Alabama, the uninsured motorist rate is estimated to be 22%, which ranks 6th worst in the nation.* The Alabama Mandatory Liability Insurance Law provides that no person shall operate, register, or maintain registration of a motor vehicle designed to be used on a public road or highway unless it is covered by a liability insurance policy. The law was passed to protect consumers when they are involved in an accident.

Liability insurance policies must be issued by insurers licensed to do business in Alabama for no less than:

$25,000 for death or bodily injury to one person;

$50,000 for death or bodily injury to two or more persons; and

$25,000 for damage or destruction of property

Minimum liabilty insurance is required on all self-propelled motor vehicles. Some vehicles that are exempt from the law include trailers, goverment-owed vehicles and vehicles covered under a commercial automobile liability insurance policy. Section 32-7A-5, Code of Alabama 1975, provides a list of other vehicles that are specifically exempt from the law.

Complying with the Law

Beginning January 1,2013, license plate issuing officials will attempt to verify liability insurance utilizing the State of Alabama Online Insurance Verification System, which will allow  license plate issuing officials to immediately verify the insurance status of a vehicle at any point in time.

If insurance cannot be verified through the Online Insurance Verification System, vehicle owners must provide evidence of insurance to the license plate issuing official. The insurance card is the most common evidence of current insurance. To be acceptable, the proof of insurance must display the current effective date, insuer's NAIC number, vehicle identification number (VIN) and policy number.

In addition to providing evidence of insurance, a valid state issued driver's license, non-driver identification card, or national driver's license must be provided for each owner reflected on the vehicle  title. If the vehicle owner is a company, the federal employer identification number (FEIN) is required.


The mandatory liability insurance law is enforced by the following methods:

1. Verification of insurance by law enforcement during traffic stops or accidents.

2. Verification of insurance by county license plate issuing officials prior to vehicle registration or renewal .

3. Verification of insurance by the Department of Revenue by sending requests for insurance information to vehicle owners:

                a. whose registrations have been suspened;

                b. who have been convicted of mandatory liability insurance violations; or

                c. whose driving privileges have been suspended or revoked.

Vehicle operators must provide evidence of insurance upon request to any law enforcement officer. Beginning January 1,2013, law enforcement officers will attempt to verify liability insurance utilizing the State of Alabama Online Insurance Verification System, which will allow law enforcement officers to immediately verify the insurance status of a vehicle.

Penalties for Violations

An owner or operator convicted of a mandatory liability insurance violation may be fined up to $500 for the first violation and up to $1,000 for the second or subsequent  violation and/or a six month driver's license suspension.

In addition to the above violation, if a vehicle is registered or operated without liability insurance, the vehicle registration will be suspended and the vehicle owner will be subject to the following:

 * First violation- $200 reinstatement fee.
 * Second or subsequent violations-$400 reinstatement fee and a mandatory four month registration suspension.

Evidence of current insurance must also be provided in order to reinstate the vehicle registration.

Evidence of current insurance along with the reinstatement fee may be submitted to the county license plate issuing official in the vehicle owner's county of residence, or any of the Alabama Department of Revenue Taxpayer Service Centers located throughout Alabama. Please visit www.revenue.alabama.gov for Taxpayer Service Center locations.

This Article was provided by OVIS

Posted 3:45 PM

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