Ala. Auto Insurance Verification System Awaits Governor’s Approval

[To read a more current update on the status of this legislation, check out "Alabama Database Will Make It Easier to Verify Proof of Coverage"]

Alabamians may soon have one more reason to get in line with the state’s compulsory car insurance laws after the state legislature gave its final OK on Wednesday to a bill that would set up an electronic auto insurance verification database.

The database would be continually updated with current policy information that would be matched up to their respective autos.

Alabama government entities, including law enforcement officers and the Department of Revenue, would be able to use the database to verify proof of insurance cards or to check if a vehicle is insured at the time of registration.

All motorists in Alabama are required to carry coverage for their vehicles.

Those who are caught driving without valid proof of coverage are subject to a $500 fine and can have their license suspended for a first offense, according to the state’s Department of Revenue. First-time offenders also have their registration suspended until they pay a $100 reinstatement fee and provide proof of car insurance.

For subsequent offenses, drivers are fined $1,000 and have their registration suspended for at least four months. The reinstatement fee for registration is $200 for all subsequent offenses.

Despite these penalties and the prospect of having to pay out of pocket for any accident damages they are responsible for, a significant portion of the state’s driving population is uninsured. The Insurance Research Council (IRC) recently estimated that, in 2009, around 1 in 5 drivers in the state were uninsured. That was the sixth highest rate in the nation, according to the IRC study.

The proposal for the verification system received widespread support from lawmakers. Between both houses, there was a total of only two votes against the proposal.

About Ben Zitney
Benjamin Zitney has been covering the auto insurance industry for the past 2.5 years. Before coming to Online Auto Insurance News, he produced an extensive company history of the 30-year-old California Joint Powers Insurance Authority and worked at the Cal State Long Beach Daily Forty-Niner as a reporter, copy editor and news editor.

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