Alabama Insurance Laws You Need to Know
Alabama is a "tort" state, meaning the at-fault driver pays for damages. This makes liability insurance critical—but most Alabama drivers carry dangerously low limits.
Alabama Mandatory Auto Insurance Requirements
Why These Minimums Are Dangerous
Alabama's minimum $25,000 bodily injury limit was set in 1975. Medical costs have increased 800% since then. A single ER visit after a car accident often exceeds $25,000. If you cause serious injury, you're personally liable for everything above your policy limit—including wage garnishment and asset seizure.
Alabama Homeowners Insurance Laws
Alabama does not require homeowners insurance by law. However, if you have a mortgage, your lender will require:
- Dwelling coverage equal to the replacement cost of your home (not the purchase price or loan amount)
- Wind and hail coverage (Alabama is in a high-wind zone)
- Liability coverage of at least $300,000 (we recommend no less than $300,000 with $5,000 medical payments to others)
- Lender named as mortgagee/loss payee on the policy
Alabama Uninsured Motorist Laws
Alabama has one of the highest uninsured driver rates in the US—approximately 15-18% of drivers carry no insurance. Alabama law requires insurance companies to offer uninsured/underinsured motorist (UM/UIM) coverage, but you can reject it in writing.
We strongly recommend accepting UM/UIM coverage. If an uninsured driver hits you, your own UM coverage pays for your injuries and damages. Without it, your only option is suing an uninsured driver (who likely has no assets to collect).
Minimum Auto Liability vs Real-World Risk in Alabama
Alabama's 25/50/25 minimum coverage sounds adequate until you see what actually happens in a serious accident.
Real Alabama Accident Scenarios
What happens next: The injured parties sue you personally. Alabama allows wage garnishment of up to 25% of your take-home pay until the $55,000 is paid. Your home, savings, and other assets can be seized.
What We Recommend for Alabama Drivers
- 100/300/100 liability
- 100/300 UM/UIM
- $5,000 medical payments
- Collision & comprehensive
- $500-$1,000 deductible
Typical cost: $120-180/month for clean record
- 250/500/100 liability
- 250/500 UM/UIM
- $5,000 medical payments
- Collision & comprehensive
- $1M umbrella policy
Typical cost: $180-240/month + $300-500/year umbrella
How Alabama Wind, Hail, and Roof Claims Actually Settle
Alabama sits in a high-wind, high-hail zone. Understanding how roof claims settle—and why many fail—is critical for Alabama homeowners.
Alabama's Roof Claim Reality
Alabama experiences severe weather year-round: spring tornadoes, summer hailstorms, and hurricane remnants from the Gulf. Roof damage is the #1 homeowners insurance claim in Alabama. But most homeowners don't understand how these claims actually pay out.
The Two Types of Roof Coverage in Alabama
Pays to replace your roof with new materials at today's prices.
Example Payout:
Pays replacement cost minus depreciation. For a 15-year-old roof, depreciation is typically 60-80%.
Example Payout:
You're $15,100 short. Most homeowners can't afford the gap and delay repairs—leading to secondary damage and claim denials.
Why Alabama Roofers Refuse ACV Policies
Many Alabama roofing contractors won't work with ACV policies because homeowners can't afford the out-of-pocket gap. This delays repairs, causes water damage, and often results in full claim denials for "failure to mitigate further damage."
Alabama-Specific Roof Claim Issues
Alabama sees frequent hailstorms, especially in North Alabama (Huntsville, Cullman, Decatur). Insurance adjusters often dispute hail damage claims, arguing that roof damage is from "wear and tear" rather than storm damage.
What we see work:
- Get an independent roofing inspection immediately after hail
- Document the storm date and hail size (NOAA reports)
- Take photos of hail damage on multiple roof areas
- Request a second adjuster if the first denies the claim
Alabama's high winds (tornadoes, thunderstorms, hurricanes) cause significant roof damage. But insurers often deny claims if they can argue the roof was poorly maintained or past its lifespan.
What triggers denials:
- Roof over 20 years old with no maintenance records
- Missing or damaged shingles before the storm
- Moss, algae, or visible deterioration
- Previous repairs not documented
Some Alabama policies now include "cosmetic damage" exclusions for roofs. This means if hail dents your shingles but doesn't compromise their function, the insurer won't pay to replace them—even though the roof looks terrible and hurts resale value.
Always ask if your policy has a cosmetic damage exclusion. We can find carriers without this restriction.
Escrow and Lender Insurance Requirements in Alabama
[Content about Alabama escrow requirements, force-placed insurance, lender requirements, and what happens if coverage lapses]
Replacement Cost vs Actual Cash Value in Alabama Policies
[Content about RC vs ACV for dwelling, personal property, and other structures—with Alabama-specific examples]
Why Cheap Insurance Policies Fail Most Often in Alabama Claims
[Content about low-limit policies, ACV-only coverage, excluded perils, and real Alabama claim denial examples]