No person shall operate, register, or maintain registration of, and no owner shall permit another person to operate, register, or maintain registration of, a motor vehicle designed to be used on a public highway unless the motor vehicle is covered by a liability insurance policy, commercial automobile liability insurance policy, motor vehicle liability bond, or deposit of cash. The insurance policy must provide a minimum of $25,000 for bodily injury/death liability for one person in an accident, $50,000 for all injuries/deaths in an accident, and $25,000 for property damage in an accident in accordance with Section 32-7-6, Code of Alabama 1975. The policy must be an Alabama policy issued by an insurance company qualified to issue motor vehicle liability insurance in Alabama.

If it is determined that a vehicle was not insured in accordance with the MLI law, the department will suspend the motor vehicle registration. The registration reinstatement fee will be $200 for the first violation, and the owner will be required to provide proof of current liability insurance. For subsequent violations, the fee will be $400.

A portion of the fees collected in accordance with the MLI law is used by the department exclusively for the operation and management of the mandatory liability insurance law. Fifteen percent of the net proceeds of reinstatement fees received by the department is deposited by the department into the Alabama Peace Officers’ Annuity and Benefit Fund, as authorized by Section 36-21-66. After the payment of the expenses, the remaining funds are deposited into the General Fund.