Cheap Car Insurance Companies In Alabama

The average semiannual cost of car insurance in the state of Alabama is $817.19. An insured premiums are influenced by more variables than purely their place of residence. Car insurance underwriters calculate auto insurance rates after assessing a range of criteria such as the policyholder’s age, driving record, marital status, and credit rating. We examined typical car insurance costs in Alabama across each of the predominant rating factors. We aim to provide consumers insight to identify a car insurance policy that meets their needs and budget.

*Data Methodology – Updated 1/15/2024

The Alabama car insurance rates are based on a 35-year-old male with the most popular car (Honda Accord) living in AL. The Quote is for full coverage with comprehensive at $500 deductible and collision at $500 deductible.

Alabama Minimum Liability Coverage

Alabama requires all drivers to carry a minimum amount of car insurance coverage. This minimum liability coverage includes:

• Bodily Injury Liability – Covers costs associated with injuries sustained by other people in an accident you cause. The minimum required in Alabama is $25,000 per person and $50,000 per accident. This means that if one person is injured, your coverage will pay up to $25,000 of their medical bills and lost wages. If multiple people are injured in the same accident, the total coverage is $50,000 to be split among them.
• Property Damage Liability – Pays for damage to other people’s vehicles and property in an accident you cause. The minimum coverage required is $25,000. This means your insurance will pay up to $25,000 for damage to other vehicles and property.

In addition to these minimum liability limits, Alabama requires that all drivers carry uninsured/underinsured motorist coverage of at least $25,000 per person and $50,000 per accident. This covers injuries you sustain in an accident caused by another driver who has no insurance or not enough coverage.

Penalties for Driving Without Insurance in Alabama

The penalties for driving without insurance in Alabama include:

• A fine between $500 and $1,000 for the first offense. Subsequent offenses can result in fines up to $2,000.
• Possible driver’s license suspension for up to one year. For a second offense within three years, suspension is mandatory for two years.
• Vehicle registration suspension until proof of insurance is provided.
• Court fees and other administrative costs.
• Possible jail time, though this is less common for a first offense.

In addition to these legal penalties, drivers caught without insurance also face higher insurance costs in the future if they are able to obtain coverage. Insurance companies consider not carrying insurance a high-risk behavior that warrants higher premiums.

Auto Insurance Rates in Alabama

Auto insurance rates in Alabama are generally considered to be lower than the national average. The state has several factors that contribute to these lower premiums:

Alabama has a lower population density compared to many other states, leading to fewer accidents and claims. This means insurance companies have lower payouts, allowing them to keep rates lower. According to the Insurance Information Institute, Alabama had 1.1 traffic fatalities per 100 million vehicle miles traveled in 2019, compared to the national average of 1.11.

Alabama also has relatively strong laws against uninsured and underinsured motorists. According to the Insurance Research Council, Alabama had an uninsured motorist rate of 13.5% in 2019, lower than the national average of 15.0%. When fewer drivers are uninsured, insurance companies face fewer claims from uninsured motorists, putting less upward pressure on rates.

Alabama’s legislative requirements for auto insurance are also fairly minimal. The state only requires bodily injury liability limits of $25,000 per person and $50,000 per accident, as well as $25,000 in property damage liability coverage. Many states mandate higher minimum liability limits, which can increase the cost of the minimum required insurance.

Additionally, auto theft rates are lower in Alabama, with 227 vehicles stolen per 100,000 residents in 2019 according to the FBI, lower than the national average of 252. When fewer vehicles are stolen, insurance companies spend less on comprehensive coverage claims.

Low Cost Car Insurance Programs and Discounts in Alabama

Car insurance premiums in Alabama can add up quickly, especially for younger or high-risk drivers. Luckily, there are some affordable car insurance options and discounts available in the state to help lower costs. Here are some of the best ways to save.

Government-Sponsored Programs

The Alabama Auto Insurance Plan (AAIP) provides basic liability coverage for high-risk drivers who are unable to get insurance through standard carriers. Premiums through the AAIP tend to be higher but may still be more affordable than standard rates for some drivers.

The Alabama Joint Underwriting Association (AJUA) offers policies to high-risk drivers who have been declined by at least two standard insurance companies. Coverage is limited and premiums are higher but this program can provide basic insurance for those who may otherwise be unable to get coverage.

Discounts Through Standard Carriers

Standard car insurance companies offer a variety of discounts to help lower premiums for qualifying drivers. The most common discounts include:

• Good student discounts for students maintaining at least a B average.
• Multi-policy discounts for insuring multiple vehicles or policies with the same company.
• Anti-theft device discounts for having devices like alarms or immobilizers installed.
• Defensive driving course completion discounts for drivers who have taken approved classes.
• Multi-year policy discounts for signing up for policies of more than one year.

Alabama Car Insurance Statistics

Alabama has a mix of required and optional auto insurance coverage. The state mandates that all drivers carry liability insurance to help cover damages and injuries caused in an accident for which they are at fault. However, Alabama does not require drivers to purchase comprehensive or collision coverage to repair or replace their own vehicle in the event of damage or theft.

Alabama auto insurance rates tend to be slightly below the national average. Factors that impact your rates in the state include your driving record, credit score, age, gender, where you live, and your vehicle make and model. Shopping around and comparing multiple quotes from different insurers can help you find the most affordable and comprehensive coverage options. An insurance agent or broker can also assist you in evaluating your insurance needs and choosing a suitable policy.

The 10 Largest Alabama Car Insurance Companies

The following are among the 10 largest car insurance companies in Alabama based on premium volume:

1. State Farm – As the largest auto insurer in Alabama, State Farm insures over 20% of drivers in the state. State Farm is known for affordable rates, multi-policy discounts, and a good claims experience.
2. GEICO – GEICO is the second largest auto insurance provider in Alabama. GEICO is a well-known national insurance brand that offers affordable rates, multi-car discounts, and 24/7 customer service.
3. Allstate – Allstate is another national insurance brand that ranks among the largest auto insurers in Alabama. Allstate is recognized for good customer service, multi-policy discounts, and a variety of coverage options.
4. Progressive – Progressive is a major national auto insurance provider that also insures a large number of Alabama drivers. Progressive is known for its name-your-price online tool, wide coverage options, and 24/7 claims service.
5. Farmers – Farmers Insurance Group is another national carrier with a large auto insurance market share in Alabama. Farmers offers multi-policy discounts, 24/7 claims service, and a variety of coverage options for Alabama drivers.
6. Alfa Insurance – Alfa is Alabama’s largest homegrown auto insurance company. Alfa is known for affordable rates, multi-car discounts, and superior customer service for Alabama drivers.
7. Liberty Mutual – Liberty Mutual is another national insurance brand that provides coverage for many Alabama drivers. Liberty Mutual offers multi-policy discounts, 24/7 claims service, and a variety of coverage options.
8. Nationwide – Nationwide is a large national insurance carrier that insures a significant number of Alabama drivers. Nationwide is known for multi-policy discounts, 24/7 claims service, and a variety of coverage options for Alabama drivers.
9. Auto-Owners Insurance – Auto-Owners is a regional insurance carrier that provides auto coverage for many Alabama drivers. Auto-Owners offers affordable rates, multi-car discounts, and 24/7 claims services.
10. USAA – While USAA auto insurance is only available to military members, veterans, and their families, it insures a sizeable number of drivers in Alabama due to the state’s large military presence. USAA is known for affordable rates, multi-product discounts, and exceptional customer service.