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If you are really strapped for money the cheapest possible insurance the state of Alabama lets you buy is a basic liability insurance policy. In Alabama the smallest liability policy you can buy is what is known as a 20/40/10 policy.

This policy pays a maximum of $20,000 for medical expenses to any one person involved in an accident with your vehicle. It pays a maximum of $40,000 for the medical expenses of all persons involved in an accident with your vehicle, regardless of how many people are involved or what the extent of their injuries are. The final "10" refers to the fact that this insurance pays a maximum of $10,000 for property damage suffered by others involved in an accident with your vehicle. A basic liability policy pays nothing whatsoever for the repair of your vehicle, nor does it pay for medical costs for you or for anyone in your vehicle.

What makes this type of policy high risk are the low payouts. It is quite easy for an individual to need more than $20,000 in medical treatments and it is common for the medical costs of an accident to exceed $40,000. And for many cars it doesn't take much more than a scratched fender to run up a repair bill of $10,000.