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Alabama state law requires Bodily Injury Liability minimum coverage limits of $25,000 per injured person up to a total of $50,000 per accident and Property Damage Liability minimum coverage limits of $25,000. This coverage is normally referred to as 25/50/25 coverage. Note though that the minimum liability coverage policy for injuries or property damage may not be enough to comprehensively protect you from financial burden should you be in an accident. Policyholders may choose to purchase higher amounts of coverage but this would result in higher premium rates.

Drivers in the state of Alabama should consider four types of motorist coverage:

• Personal Injury Protection (PIP). With PIP, if you or any member in your household, becomes injured in an accident, no matter who is at fault, the insurance company will cover medical expenses, possible lost wages as well as replacement services.
• Liability Protection. If you have injured another driver or person by an accident, or another vehicle for that matter, the insurance company will cover the damage done, within the stated limits of the policy.
• Underinsured Coverage. This coverage is in addition to your PIP. Your insurance company will take over in case of an accident where the driver responsible for the accident does not have enough liability coverage to fully pay your medical expenses.
• Uninsured Coverage. Similar to the underinsured coverage, this provides you protection when the driver who is responsible for an accident is not covered by any insurance.

The state of Alabama offers an Alabama Automobile Insurance Plan (AAIP) to help ensure that all residents of the state can obtain auto insurance. The plan targets individuals who are unable to obtain coverage through the normal market. To be eligible for this plan, drivers must meet several conditions including the following:

• Must have a valid vehicle operators license
• Must have paid all insurance premiums due during the immediately preceding 12 months
• Must not have had an insurance policy cancelled within the past 12 months for failure to make a vehicle available for safety inspection
• If the applicant's automobile has an original cost over $50,000
Calculation of the rates under the AAIP program is based on the applicant's classification and the vehicle's territory. An applicant's classification varies based on gender, age and usage of the auto. The vehicle's territory is generally determined by where the vehicle is garaged or the applicant's residential address. Be sure to speak with your agent about the full list of requirements if you are seeking eligibility under the AAIP.

If you operate a vehicle in the state of Alabama, but do not have insurance you will be ticketed and guilty of a class C misdemeanor. The fine can be up to five hundred dollars ($500) for the first conviction. For subsequent convictions, the fine can be up to one thousand dollars ($1,000) and/or suspension of your driver's license for a period up to six months.