Alabama residents can benefit enormously from shopping around for car insurance. While auto insurance rates in the state tend to be pretty competitive, they vary from one insurance company to the next. Furthermore, factors like age, driving history and location affect rates too. Before collecting car insurance quotes in Alabama, drivers should educate themselves about minimum insurance requirements for the Yellowhammer State. Learning about the basic demographics of licensed drivers in the state can be useful too because it demonstrates why more extensive car insurance coverage may be in order.
Drivers in Alabama
People are sometimes confused and even upset by the fact that car insurance is legally required in Alabama. When they are presented with facts about drivers in the state, though, they usually change their minds. The fact of the matter is that accidents can happen anywhere at any time. However, they are more likely in densely populated areas. Most of the state of Alabama is rural, but there are pockets of higher densities of people. Regardless of where someone primarily drives in the Cotton State, he should maintain valid coverage at all times.
The U.S. Census Bureau estimated that the population of Alabama was 4,822,623 in 2012. 3,798,552 of those people are licensed to drive, which equals about 78.8 percent of the population. That's not to say that each and every licensed driver is on the road every day. It just highlights the fact that millions of people can and do take to the freeways and streets of Alabama on any given day.
According to the Federal Highway Administration, male drivers accounted for 1,850,949, or 48.73 percent, of all licensed drivers in the state in November 2012. Female drivers accounted for 1,947,603, or 51.27 percent of all residents with driver's licenses. Insurance companies do not take gender into consideration when calculating insurance rates. However, they can and do consider age, which makes sense because younger drivers are less experienced in general and are more likely to be involved in accidents.
In November 2012, there were 109,213 licensed drivers under the age of 19 in Alabama, which equals about 2.9 percent of all drivers. Drivers between the ages of 50 and 54 accounted for 4.4 percent of all licensed drivers. However, drivers between the ages of 20 and 24, who tend to be a lot less experienced, accounted for 4.3 percent. In other words, licensed drivers tend to span many age groups fairly equally. At any moment, there is probably a mix of experienced and inexperienced drivers sharing the road, which highlights why high-quality auto insurance is so crucial to have in Alabama.
Auto Insurance Requirements in Alabama
Like many states, Alabama gives residents a couple of options in order to drive legally. The most important thing is having proof of financial responsibility. This can be accomplished be either maintaining valid liability auto insurance or by obtaining a Motor Vehicle Bond or Certificate of Cash Bond in the amount of $50,000 or more. The problem with the latter option is that $50,000 may not actually cover all of the damages and injuries that happen as a result of an accident. If it doesn't, the responsible party may have to pay the difference in cash or risk being sued for the money in court.
At the absolute minimum, liability insurance in Alabama must:
- Include at least $25,000 in property damage coverage
- Include at least $25,000 in liability coverage for the injury of one person
- Include at least $50,000 in liability coverage for the injury of all people
There are pretty serious consequences for driving without proof of financial responsibility in Alabama. The Motor Vehicle Department may suspend a person's license for doing so. For the first offense, reinstatement involves showing proof of financial responsibility and a fine of $100. For the second offense, reinstatement involves a four-month suspension, showing proof of financial responsibility and a fine of $200.
Regardless of a person's driving record, it's always in his best interests to collect auto insurance quotes before buying car insurance in Alabama.