Car insurance in Alabama

As most drivers know, buying auto insurance is far from optional if you own a car. So here’s the latest statistical report on car insurance laws and premiums in the state of Alabama. This valuable info can help Alabama drivers customize auto insurance plans most suitable to their individual needs.

Alabama Minimum Liability Coverage

The minimum amount of auto insurance coverage required by law in the state of Alabama is $25,000 in Bodily or Personal Injury Protection (better known as PIP), $50,000 in multiple injury protection (for injury to others), and $25,000 in protection against property damage. Insurance agents refer to this minimum coverage amount as 25/50/25. However, most car insurance minimums do not cover the actual cost of an accident. Experts recommend 100/300 coverage for all vehicle owners.  Uninsured Motorist Insurance (UMI) is also recommended. Unfortunately, most drivers feel strongly that car insurance premiums are high enough already.

Penalties for Driving Without Insurance in Alabama

Getting caught driving an uninsured vehicle can result in fines of up to $500 and/or imprisonment, along with a suspended license, which costs another $200 to reinstate. The penalties increase with each subsequent offense. Fines can be as high as $3,000.

Auto Insurance Rates in Alabama

When Alabama car insurance agents calculate premiums, they account for local climate, topographical features, economic conditions, rate of uninsured vehicles and population density, among other factors. They also consider the driver’s age, gender, marital status, health, driving history and type of vehicle owned.

The average annual auto insurance premium for drivers in the state of Alabama was $1,337 in 2016. This is right around the national average, which was about $1,347 at that time. This is despite the fact that there is a relatively high percentage of uninsured vehicles on the road. Alabama, Mississippi, Tennessee and Florida rank highest among states in terms of uninsured motorists.

Low Cost Car Insurance Programs in Alabama

Auto insurance companies offer numerous discount programs. Depending on your provider, low cost auto insurance programs in Alabama include Accident-Free Discounts and Good Driver Discounts for those who follow the rules and drive safely. Also available are Good Student Discounts for school-age drivers who get good grades, Multiple Automobiles Discounts for owners of more than one car, Multiple Line Discounts for holders of more than one policy, and Vehicle Safety Discounts for certain types of cars. Check with your local auto insurance agent for complete details. Always ask about discounts when receiving a quote.

Obtaining Auto Insurance Quotes in Alabama

Based on 2017 online customer satisfaction ratings, the top five publicly available auto insurance companies in the United States are Allstate, Auto Owners Insurance, The Hartford, State Farm and 21st Century. At the same time, many Alabama car owners opt for local carriers. Indeed, the state of Alabama has dozens of auto insurance carriers to choose from, all of them offering competitive rates for you to compare. Call several car insurance agents near you for quotes, comparisons and further assistance.

Alabama Car Insurance 

Here’s the scoop on Alabama car insurance.

The population of Alabama was estimated at 4,863,300 in 2016, making Alabama the 24th most populous state in the nation. Alabama’s population has a median age of about 39 years. Roughly 18.5 percent of Alabama residents live at or below the poverty line. The state unemployment rate as of 2016 was 6.2 percent, somewhat above the national average. Due mainly to financial constraints, Alabama has a higher than average rate of uninsured drivers.

The state also has a statewide average annual premium on Alabama car insurance.

Unfortunately, statewide averages of car insurance premiums, even if accurate, are of little use to the majority of American drivers. These averages are usually based on the parameters of an “average” (imaginary) driver. So, if you don’t just happen to be a 30-year-old single male with a clean driving record and a 2015 Honda Civic DX that you drive less than 15,000 miles a year (for instance), statewide average insurance quotes won’t be of much help to you.

More relevant to your research on Alabama car insurance would be zip code comparisons within the state.

Just for the record, the “average” annual Alabama car insurance quote is around $1,320, according to data obtained. This figure hovers right around the national average annual premium rate for car insurance.

Car insurance rates are unpredictable, to say the least. This is partly because each insurance company has its own way of calculating premium costs, based on vehicle location, the owner’s driving record, and state laws, among other things. Premium rates are also affected by population density, climate conditions, and crime rates (particularly car theft, DUI, and speeding), as well as the percentage of uninsured drivers on the road, to name just a few of the factors involved in calculating car insurance premiums. Even within a single zip code, auto insurance premium rates will vary, often by more than a thousand dollars a year, depending on the demographics of the vehicle owner.

This page offers a detailed analysis of the best and worst zip codes for Alabama car insurance. You’ll also find a list of Alabama’s favorite car insurance companies, an overview of the types of insurance needed by Alabama drivers, some interesting Alabama state laws, and other info pertaining to Alabama car insurance.

Read on to find out all you need to know about buying an auto insurance policy in the state of Alabama.

Best Car Insurance Companies in Alabama

A sample of Alabama drivers were recently surveyed. The drivers were asked to rank Alabama car insurance companies based on premium rates, customer service, and insurance payout.

According to the data from the survey, the top providers of Alabama car insurance are Progressive Insurance, State Farm Insurance, Nationwide Insurance, Geico Insurance, and Allstate, in that order. These are followed closely by Travelers Insurance, Liberty Mutual Insurance, and Farmers Insurance. Also popular are regional Alabama car insurance carriers such as Alfa Corporation and First Acceptance.

Sometimes, car insurance companies are ranked based on the dollar amount of written premiums, although this could possibly only mean that they spend more money on advertising than other companies do. In any case, here’s an ordered list of the “top” ten Alabama car insurance companies, in terms of premiums written (i.e. market share):

RankCompanyPremiums ($)Market Share (%)
1State Farm Insurance$604,95523.9
2Alfa Corporation$390,18515.4
3Allstate Insurance$270,29310.7
4Berkshire Hathaway$228,5349.0
5Progressive Insurance$171,3606.8
7Nationwide Group$97,0393.8
8Farmers Insurance$85,1103.4
9Liberty Mutual$65,5252.5
10Travelers Group$55,8802.2

It is a bit surprising that Geico did not make the list of Alabama’s ten highest revenue car insurance companies.

The reputations of insurance companies are outlined on various independent review websites. There is no such thing as The One Best Car Insurance Company. Opinions differ as to which car insurance company is the “best.” Some car insurance carriers are best for one group of people, while other auto insurance companies might specialize in a different demographic. You really have to shop around for quotes, and make your own decision, based on your own demographic info and your own personalized insurance needs.

What Types Of Car Insurance Do Alabama Drivers Need?

Drivers in Alabama are well advised to get more than the bare minimum auto insurance coverage required by the state. Of course, we all need basic liability and personal injury protection. In addition, at the very least, there are two must-have coverage types for Alabama drivers to seriously consider: Uninsured Motorist Insurance (UMI), and Comprehensive coverage (OTC).

UMI will cover your costs in the event you have an accident with one of Alabama’s many uninsured drivers. Well over 20 percent of Alabama car owners are driving uninsured vehicles.

Comprehensive coverage (also known as Other Than Collision) will cover your costs in the not too unlikely event of weather damage to your vehicle, especially during that notorious Atlantic hurricane season, when tornadoes, hurricanes, and tropical storms are common. The destructive force of this type of weather causes misfortunes such as hail damage, flooding, and free-flying objects hurled at your vehicle by hundred-mile-an-hour winds. Comprehensive insurance also covers deer collisions.

Alabama Car Insurance Laws

  • There is no age restriction on car ownership in the state of Alabama. Any Alabama resident of any age can own a car. However, most insurance companies require a guardian’s signature on policies written for people under the age of 18.
  • Alabama is one of 31 states where drivers who get pulled over are allowed to show electronic proof of their insurance on their smartphones.
  • The fine and fees for driving without a license in Alabama are no more than $150.
  • You are not allowed to drive while blindfolded in the state of Alabama. Seriously. That’s an Alabama state law. So save your blindfolded driving for the other 49 states, not to mention Washington DC.

Best And Worst Zip Codes For Alabama Car Insurance

In Alabama’s most expensive zip codes for car insurance, annual premium rates can range anywhere from about $850 to about $2,800. Based on a typically “average” driver demographic, here is a list of the four zip codes where Alabama car insurance reaches its highest premium rates.

Zip CodePop Density Unemployed %Poverty %
36688 (Mobile)62918.6%0%

The high (average) cost of car insurance in this part of Mobile is probably because this zip code is home to the main campus of the University of South Alabama. That would explain the relatively high unemployment rate. It also explains the higher than average number of young adults living in the area. This brings the median resident age down to 20.3 years. Compare this to the median age for the state of Alabama, which is 38.7 years. Car insurance premiums are known to be higher for people between the ages of 18 and 24. It isn’t too hard to believe that this zip code is Alabama’s priciest for buying car insurance.

Zip CodePop Density Unemployed %Poverty %
36446 (Fulton)9439.4%32%

The significantly high rate of poverty and unemployment in this rural zip code may have something to do with hiked up premium rates on car insurance. A lack of money to pay the premiums is the number one reason people give when asked why they drive without insurance. A staggering 26 percent of Alabama drivers are driving uninsured vehicles, according to a study done by the Insurance Research Council. With so many fewer drivers putting money into the risk pool, premiums increase for the drivers who do purchase car insurance.

Zip CodePop Density Unemployed %Poverty %
35228 (Midfield / Birmingham)2,34711.4%19.4%

The unemployment rate in this urban zip code is nearly double the state average of 6.2 percent, and nearly triple the national average of 4.7 percent, although still lower than the unemployment rate in surrounding Alabama zip codes. The poverty level is just slightly above the state average.

Zip CodePop Density Unemployed %Poverty %
35234 (Birmingham)1,47830.1%40.4%

The high cost of car insurance in this urban zip code is at probably due to a poverty rate above 40 percent, as well as much higher than average unemployment. Alabama’s overall unemployment rate is 6.2 percent, according to The state’s poverty level is 18.5 percent.

In Alabama’s cheapest zip codes for car insurance, annual premium rates can range anywhere from about $700 to about $1,700. Here is a list of the four least expensive zip codes for car insurance in the state of Alabama.

Zip CodePop Density Unemployed %Poverty %
36532 (Fairhope)4265.1%10.9%

This zip code is about two-thirds urban and one-third rural. Population density is very low, and unemployment is below the state average, as is the poverty rate. What’s more, most homeowners in this zip code have at least two vehicles. This qualifies them for a valuable multi vehicle discount.

Zip CodePop Density Unemployed %Poverty %
36551 (Loxley)1308.8%12.6%

This rural zip code has an unemployment rate a little bit above the state average. Loxley’s low premium rates for car insurance may be partly due to the zip code’s low population density, along with a higher than average median age of 40.6 years. Also a factor could be a lower than average (for Alabama) poverty rate, which would naturally result in fewer uninsured drivers on the road.

Zip CodePop Density Unemployed %Poverty %
36561 (Orange Beach)37311.5%10.4%

This rural zip code also has an unemployment rate well above the Alabama state average of 6.2 percent. The low premium rates for car insurance in Orange Beach may be partly due to the zip code’s low population density, and a lower than (state) average poverty rate. Also a probable factor is the very much higher than average resident median age of 55.6 years, which is miles above above the state average of 38.7 years.

Zip CodePop Density Unemployed %Poverty %
36527 (Spanish Fort)3313.9%5.5%

Although this rural zip code is located near Loxley, it has a much lower unemployment rate, well below the state average. The low premium rates for auto insurance in Spanish Fort, Alabama may have something to do with low population density, low unemployment, and a much lower than average poverty rate. Also, most homeowners in Spanish Fort own two or more vehicles, making them eligible for a multi vehicle discount.

So, why would car insurance premiums in Spanish Fort be more expensive than in Loxley? Actually, they’re not. The test quotes, which were based on an “average” driver, produced only a six-dollar difference annually between Loxley and Spanish Fort. For all practical purposes, these two zip codes have roughly the same car insurance premiums, despite the fact that Loxley has more than double the unemployment and poverty levels of Spanish Fort.

In terms of getting cheap car insurance in America, the state of Alabama falls somewhere in the middle of the pack.

The 10 most expensive zip codes in America to buy car insurance are 48227 (Detroit, Michigan), 11226 (Brooklyn, New York), 19132 (Philadelphia, Pennsylvania), 02903 (Providence, Rhode Island), 70117 (New Orleans, Louisiana), 90029 (Los Angeles, California), 06525 (Woodbridge, Connecticut), 21216 (Baltimore, Maryland), 33142 (Miami, Florida), and 41464 (Royalton, Kentucky).

The 10 cheapest zip codes in America to buy car insurance are 44836 (Green Springs, Ohio), 28704 (Arden, North Carolina), 04072 (Saco, Maine), 24073 (Christiansburg, Virginia), 83706 (Boise, Idaho), 86403 (Lake Havasu City, Arizona), 47907 (West Lafayette, Indiana), 54302 (Allouez, Wisconsin), 03303 (Concord, New Hampshire), and 61761 (Normal, Illinois).

None of these 20 zip codes are located in the state of Alabama.

All in all, Alabama has 811 zip codes in 573 cities, all the way from Adamsville to York. Other things being equal, there is more than a $450 difference in average annual car insurance premium rates between the cheapest zip code and the priciest zip code in the state of Alabama.

This info should give you some general idea of the cost of Alabama car insurance.