In 2000, the Alabama state Legislature passed a law requiring all Alabama motorists to have liability insurance. Despite the law, however, state officials estimate that roughly 22 percent of Alabamans don’t have car insurance. When these drivers are involved in car accidents, the financial implications impact insured drivers and the state as a whole.
As is customary in other states with similar insurance requirements, drivers in Alabama are required to show proof of insurance when attempting to renew their license or tabs. Many however, purchase insurance to obtain an insurance card and then allow the policy to lapse. The result is that an estimated 900,000 Alabama vehicles aren’t covered under an insurance policy making Alabama among the 10 highest states in the nation for numbers of uninsured drivers.
Lawmakers, however, are hopeful a new system which allows them to automatically know whether or not a motorist currently has insurance will help crackdown on the practice of driving without insurance. Alabama motorists found in violation of the insurance law will be subject to a $500 first offense fine with fines of $1,000 for subsequent violations. Additionally, it will cost uninsured drivers $200 to reinstate their license after a first offense and $400 thereafter.
The costs associated with failing to comply with the insurance law are much higher than purchasing an insurance policy. This, officials hope, will help motorists realize they are better off complying with the law than taking a chance they somehow won’t get caught.
Bloomberg Businessweek, “Driving without insurance in Ala. to get tougher,” Phillip Rawls, Sept. 24, 2012