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Cancellation of Automobile Liability Insurance


(Alabama Laws that Apply to Personal Auto and Auto Physical Damage Insurance)

Section 27-23-21. Grounds for policy cancellation

An automobile liability insurance policy may only be cancelled for one or more of the following reasons:

  • Nonpayment of premium
  • Policy was obtained through a material misrepresentation
  • Insured violated any of the terms and conditions of the policy
  • Named insured failed to disclose motor vehicle accidents and moving traffic violations for the preceding 36 months if asked in the application
  • Named insured failed to disclose on written application information necessary for acceptance or property rating risk
  • Insured made a false or fraudulent claim or aided another in presentation of such a claim
  • Failure to maintain membership in any group or organization when this is a prerequisite to purchase of insurance
  • Named insured or any other operator who resides in same household or customarily operates an auto insured under the policy:
    • Has had a driver's license suspended or revoked within 36 months prior to cancellation notice
    • Is subject to epilepsy or heart attacks
    • Has an accident record or conviction record; a physical, mental, or other condition which would endanger public safety
    • Has been addicted to the use of narcotics or other drugs within 36 months prior to the cancellation notice
    • Uses alcoholic beverages to excess
  • Has been convicted or forfeited bail during the preceding 36 months for:
    • Any felony
    • Criminal negligence resulting in death, homicide, or assault arising out of the operation of a motor vehicle
    • Operating a motor vehicle while intoxicated or under the influence of drugs
    • Being intoxicated while in an automobile or while having custody of an auto
    • Leaving the scene of an accident without stopping to report
    • Making false statements in a driver's license application
  • The insured automobile is:
    • Mechanically defective, and operation might endanger public safety
    • Used in carrying passengers for hire or compensation
    • Used in the business of transportation of flammables or explosives
    • An authorized emergence vehicle
    • Changed in shape or condition during the policy period which increase the risk
    • Subject to an inspection law, and has not been inspected, or if inspected, failed to qualify
  • This section does not apply to any automobile liability insurance policy that has been en effect less than 60 days at the time cancellation notice is mailed or delivered by the insurer unless it is a renewal policy.

    Policy renewal does not constitute a waiver or estoppel for grounds for cancellation that existed before the efective date of the renewal.