Alabama P&C Law & Coverage Requirements
The state portion of the Alabama property & casualty exam tests the coverage rules that differ from the national fundamentals: Alabama's compulsory auto insurance limits, how injury claims are settled, cancellation and nonrenewal protections, and the dwelling/homeowners products used for Alabama property. These sit on top of the shared national P&C bank.
Compulsory Auto Liability Limits in Alabama
Alabama requires every registered vehicle to carry at least the state minimum liability coverage. Under Alabama's Mandatory Liability Insurance Act (Ala. Code Title 32, Chapter 7), the minimums are $25,000 for bodily injury per person, $50,000 per accident, and $25,000 for property damage — commonly written 25/50/25. These are floors, not recommendations; higher limits and optional coverages (uninsured/underinsured motorist, collision, comprehensive) are available. Confirm the current statutory figures with the Alabama Department of Insurance before quoting them.
How Alabama Settles Auto Injury Claims
Alabama is a traditional tort ('at-fault') state, not a no-fault state; the at-fault driver's liability coverage pays third-party claims. Knowing whether Alabama is a tort or no-fault state tells the producer which coverage responds first and how an injured party recovers. Uninsured/underinsured motorist coverage protects the insured when the at-fault party has no or too little insurance.
Cancellation, Nonrenewal, and Dwelling/Homeowners Coverage
Alabama protects personal-lines policyholders by regulating when and how an insurer may cancel a policy midterm or decline to renew it, generally requiring advance written notice with a stated reason; the exact number of days is fixed by state law and should be verified with the Alabama Department of Insurance. For property, homeowners (HO) forms require owner-occupancy, while a Dwelling (DP) policy covers rental or non-owner-occupied dwellings — a national distinction the exam applies to Alabama risks.