Alabama · state requirements

Commercial auto insurance in Alabama

For Alabama businesses running cars, vans and trucks for work: the state’s minimum limits, PSC filings for for-hire carriers, what a lapse costs and what coverage typically runs.

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What similar businesses pay

Commercial auto in Alabama: About $256 a month
Commercial auto, national: About $245 a month
National premium range: Under $375 to over $16,000 a year

Published benchmarks, not quotes. Your price depends on underwriting.

Cost

What commercial auto insurance in Alabama costs

About $256 a month

Commercial auto in Alabama

Insureon average for Alabama small-business customers ($3,075 a year), updated March 2026

About $245 a month

Commercial auto, national

Insureon average for small-business customers nationwide, updated March 2026

Under $375 to over $16,000 a year

National premium range

Insureon customers nationwide, updated March 2026

Insureon reports that its Alabama small-business customers pay an average of $256 a month, or $3,075 a year, for commercial auto, slightly above its $245 national average (both updated March 2026). Most of those customers have fewer than five employees, so the figures fit a contractor’s pickup or a service van better than a tractor-trailer. Nationally, Insureon says 40% of customers pay under $200 a month and 29% pay $200 to $400. Expect more if you run heavy trucks, haul for pay under PSC limits or buy limits well above 25/50/25.

What moves your price

Where vehicles are garaged, such as Huntsville or Mobile, per Insureon
How many vehicles you run, what type they are and what they are worth
Each employee’s driving record
Your business’s claims history
Limits above 25/50/25, such as the $350,000 combined PSC floor for for-hire property carriers
Whether you keep or reject uninsured motorist cover
Your physical damage deductibles

Alabama

What’s different in Alabama

25/50/25 is the floor, and only an Alabama insurer counts

The Alabama Department of Revenue requires liability of at least $25,000 per person and $50,000 per accident for injuries and $25,000 for property damage, from an insurer licensed in Alabama. The same floor applies to a sedan and a loaded work truck; contracts and PSC filings often demand far more.

About one driver in six has no insurance

The Insurance Research Council estimates 16.8% of Alabama drivers were uninsured in 2023, the 15th highest share in the country, as published by the Insurance Information Institute. When one of them hits your van, your own uninsured motorist cover is what pays for your driver’s injuries.

Uninsured motorist cover stays on unless you reject it

Code of Alabama 32-7-23 requires every auto liability policy on a vehicle registered or garaged in Alabama to include uninsured motorist cover at least at the 25/50 bodily injury limits, unless the named insured rejects it. A rejection carries over to renewals with the same insurer until you ask for the cover in writing.

Commercial policies skip the online check, so carry the card

Under Ala. Admin. Code 810-5-8-.07, vehicles on a commercial auto policy are exempt from the state’s online insurance verification. You must still show proof when you register and carry it in the vehicle. The card may read “FLEET” or “COMMERCIAL” instead of listing each VIN.

Repeat stops without proof end in a tow, then impound

Code of Alabama 32-7A-16 escalates within a two-year registration period: the first stop without proof of insurance gets the vehicle moved off the road, the second gets it towed at the owner’s cost and the third gets it impounded until it is insured and all fees are paid.

Hauling for pay in-state needs PSC authority

The Alabama Public Service Commission requires intrastate authority to carry passengers or property, including household goods, for compensation. Property carriers must file liability of $100,000 per person, $300,000 per accident and $50,000 for property damage, plus $5,000 cargo cover.

Coverage

Coverage Alabama businesses need

Commercial auto liability

Pays for injuries and property damage your vehicles cause. Alabama requires at least 25/50/25 on every self-propelled vehicle, and for-hire carriers file higher limits with the PSC.

How commercial auto works →

Uninsured and underinsured motorist

Pays your people when an at-fault driver has no insurance or too little. Under 32-7-23, one policy can stack up to two additional vehicle coverages on top of the primary.

How commercial auto works →

Medical payments

Alabama has no PIP requirement; Insureon notes the state mandate applies only to liability. MedPay pays medical bills for employees and passengers injured in your vehicle regardless of fault.

How commercial auto works →

Collision and comprehensive

Repairs or replaces your own vehicles. Insureon notes comprehensive covers non-collision damage such as theft, vandalism, flood and fire. Neither is required by Alabama law.

How commercial auto works →

Motor truck cargo

Pays for the goods you haul. The PSC requires $5,000 of cargo cover from every regulated intrastate carrier of property or household goods; many loads need more.

Hired and non-owned auto

Covers your business when employees drive their own or rented vehicles on company errands.

How commercial auto works →

Umbrella or excess liability

Adds limits above your auto liability when a customer or general contractor asks for more than your primary policy.

How umbrella / excess works →

Rules

Alabama requirements

Alabama’s Mandatory Liability Insurance law sets the floor for every business vehicle; the Public Service Commission sets higher limits for in-state for-hire carriers.

Requirement	Applies to	What it means
Minimum liability	Every self-propelled motor vehicle operated or registered in Alabama	$25,000 per person, $50,000 per accident for bodily injury and $25,000 property damage, from an insurer licensed in Alabama, under Code of Alabama 32-7A-4 and 32-7-6(c), per the Department of Revenue.
Proof on commercial policies	Vehicles insured on a commercial or blanket auto policy	Exempt from online verification but must show proof at registration and carry it in the vehicle; the card may read FLEET or COMMERCIAL (Ala. Admin. Code 810-5-8-.07). Company owners also give their FEIN at registration.
Uninsured motorist cover	Auto liability policies on vehicles registered or principally garaged in Alabama	Included at no less than 25/50 bodily injury limits unless the named insured rejects it (Code of Alabama 32-7-23).
Penalties for no insurance	Owners and operators	Class C misdemeanor (32-7A-16). Fines up to $500 for a first violation; up to $1,000 and/or a six-month license suspension after that. Registration is suspended with a $200 or $400 reinstatement fee, per the Department of Revenue.
Tow and impound	Vehicles stopped without proof of registration and insurance	Moved off the road on a first violation, towed on a second and impounded on a third within a two-year registration period (32-7A-16(e)).
PSC authority, property	For-hire intrastate carriers of property and household goods	$100,000 per person, $300,000 per accident, $50,000 property damage ($350,000 combined) and $5,000 cargo, under PSC Motor Carrier Rules 770-X-10-.04.
PSC authority, passengers	For-hire intrastate passenger carriers	Combined limits of $60,000 for vehicles carrying up to 5 passengers, $230,000 for 6 to 20 and $550,000 for 21 or more, per the PSC.
Federal and PSC filers	Vehicles regulated by the FMCSA or PSC with financial responsibility on file	The state mandatory insurance chapter does not apply if the filed liability is at least the state minimum (Code of Alabama 32-7A-5(3)).

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Pay less

How to lower the cost

Keep coverage continuous: a lapse suspends the registration and costs a $200 reinstatement fee the first time and $400 after that, per the Department of Revenue.
Keep a current card marked COMMERCIAL or FLEET in every cab: commercial policies sit outside the online verification system, and a third stop without proof means impound.
Surrender the plate before you drop coverage on a stored or out-of-service vehicle; Code of Alabama 32-7A-5(9) exempts vehicles whose registration was surrendered first.
Hire drivers with clean records and check them every year; Insureon lists employee driving records among the main rating factors.
Raise physical damage deductibles on older vehicles you could afford to repair yourself.
Compare quotes before renewal; Florin is an independent broker that compares options from several insurers.

Before you start

What underwriters ask for

Legal business name, physical address and FEIN, matching your registrations and any PSC certificate
Vehicle schedule with VINs, years, values, lienholders and garaging city
Driver list with license numbers, dates of birth and years of experience
Loss runs from your current and prior insurers
PSC certificate or permit number if you haul passengers or property for pay in-state
USDOT number if you cross state lines
Current declarations page and any uninsured motorist rejection you signed
The limits your customers or contracts require

Common questions

Commercial auto insurance in Alabama: questions

Does Alabama require PIP or no-fault coverage?

No. Alabama requires bodily injury and property damage liability of at least 25/50/25, and Insureon notes the mandate applies only to liability. Medical payments coverage is optional.

Why doesn’t my company truck show up in Alabama’s online insurance check?

Vehicles on a commercial or blanket policy are exempt from online verification under Ala. Admin. Code 810-5-8-.07. You still need to show proof at registration and keep an insurance card in the vehicle.

Do I need PSC authority to haul for pay inside Alabama?

Yes, the Public Service Commission requires intrastate authority to carry passengers or property, including household goods, for compensation. Property carriers must file $350,000 in combined liability and $5,000 in cargo cover.

Do trailers need their own insurance under Alabama law?

Code of Alabama 32-7A-5 excludes trailers, including semitrailers and utility trailers, from the mandatory insurance chapter. Lenders, customers or your insurer may still require coverage for them.

Can I reject uninsured motorist cover on a business policy?

Yes. Under 32-7-23 the named insured can reject it, and the rejection carries over to renewals with the same insurer. With an estimated 16.8% of Alabama drivers uninsured in 2023, that leaves your drivers exposed.

What happens if my driver is stopped without proof of insurance?

Driving without insurance is a Class C misdemeanor, with fines up to $500 for a first violation. Within a two-year registration period, a second stop without proof gets the vehicle towed and a third gets it impounded.

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Sources (10)

Figures are published third-party estimates, not quotes. Coverage depends on policy terms and underwriting, and rules vary by state. Updated November 2026.