Auto Insurance in Alabama 2020

Last modified: November 26, 2020

Looking for the best auto insurance company in Alabama

To find the best Alabama car insurance provider, we generated quotes from all the major Alabama auto insurance companies for a sample driver with different zip codes in Yellowhammer State.

We’ve prepared a comparison table for the best Alabama car insurance and a buyer’s guide on how to reduce the cost of car insurance in Alabama.

Before diving into the details, here is a useful fact: compared to other states, auto insurance premiums in Alabama are not the cheapest. They fall in the average price range.

Alabama Auto Insurance Minimum Requirements

What is a must-have coverage in Alabama?

The auto insurance coverage must meet the following Alabama auto insurance requirements to register and operate a vehicle.

Bodily injury and property damage liability requirements

Alabama insurance minimum requirements are 25/50/25. The applicable limits are: 

  • $25,000 bodily injury liability limit per person
  • $50,000 max for all bodily injuries in any one accident 
  • $25,000 max limit for property damage per accident

Uninsured motorist bodily injury

Alabama auto insurance minimum coverage for uninsured and underinsured motorists is $25,000 per person and $50,000 per accident.

Can you opt-out of UM/UIM coverage?

The state of Alabama does not require the mandatory purchase of uninsured motorist insurance. However, insurance companies have to offer you this type of insurance.

Alabama is an at-fault state, and as a tort state, in case of a crash, the at-fault side will be responsible for all damages. If the at-fault party does not carry insurance, your insurance company will have to cover those damages. 

This is a perfect example of the importance of uninsured motorist coverage. If by any chance you’ve turned down this type of coverage, you’d be paying those losses out of your own pocket.

Minimum requirements by banks to finance your car

The recommended credit score needed for a bank to finance a car is 660 and above. This type of score will keep the interest rates well under 6%. The main factors that determine your credit score are payment history and debt, closely followed by credit length and multiple mix of inquiries.

What is the state minimum for auto insurance in Alabama?

As an example, the monthly cost by the Mandatory Liability Insurance Law for an Alabama full coverage auto insurance ranges anywhere between $64-$80 per month.

Coverage Options and Prices

Prices and coverage are the biggest variables when it comes to auto insurance. The coverage that you wish to have is one of the major factors that affect the total premium cost when insuring a vehicle.

State Average Costs by Age and Gender

Age Group Average Price For Men Average Price For Women
20-30 $1,866 $1,924
30-40 $1,297 $1,332
40-50 $1,267 $1,281
50-60 $1,172 $1,193

 

Cost Of Car Insurance By Top Cities

City Average Rate
Montgomery $2,152
Birmingham $2,344
Huntsville $2,057
Tuscaloosa $2,131

 

Factors that influence insurance costs

Age can certainly affect the rate when people are shopping for cheap car insurance in Alabama.

Statistically, certain age groups are more likely to get in accidents, or likely to commit a violation, that can affect the car insurance rates. Alabama is no exception. Our age group table above shows that younger individuals tend to pay higher premiums.

Gender is yet another factor that affects your car insurance monthly cost.

The second table depicts the average rates from our Alabama car insurance quotes for different cities. From there we can see that Huntsville, AL has cheap car insurance costs in the state, while insurance in Birmingham, AL is not so cheap. Statistics show that Birmingham has car insurance quotes that are ranging 11-13% higher than the state average.

How can you reduce the cost of auto insurance in Alabama?

It is no secret, car insurance rates are on the rise across the country.

But on the bright side, there are numerous ways and various types of car insurance discounts that you can use to significantly reduce the cost.

 

Security devices – A full list of the safety features and equipment on your vehicle can result in getting a fair amount of discount from your carrier. Be sure that the car you buy incorporates as many of those as possible. Security devices may include: a full set of airbags (front row and passengers), anti-lock brakes, and a factory-installed security system, to name a few.

The choice of car. The type of your vehicle will affect the bottom-line premium on your car insurance policy. A top of the line SUV with all the luxury accessories will get a higher premium. Having a small commuter car, on the other hand, can make you more open to insurance companies to offer some sort of car insurance discounts.

Safe and good driving record. Good driver discount and good student discount are two of the most common discounts that are being offered by insurance companies in the U.S. If you happen to have a good driving record this can be a quick and easy way to lower the insurance premium. 

Many insurance companies offer a driver education discount if you complete one of their required defensive driving courses, or it may even be a course that you’ve completed recently.

Higher deductible. A deductible is an amount you pay before your insurance policy kicks in. By choosing higher deductibles, you can substantially lower the costs on your premium. 

For example, increasing your deductible from $250 to $500 could very easily reduce your comprehensive and collision coverage cost by 20% to 30%. Going even higher, to a $1,000 deductible can save you up to 40% or more. 

But one thing to have in mind before opting for a higher deductible, be sure to have enough money set aside in case you need to pay out those deductibles in case of a claim.

Search for discounts. A lot of insurers offer different types of discounts. Those might include customer loyalty discount, low mileage discounts, group insurance discounts, good credit, and MVR record discounts, paid in full discount, and many more. Be sure to do good research before buying insurance in Alabama.

Look for bundles. This is another great way to keep the premium as low as possible. Having multiple cars or drivers on your policy can save money. Those drivers must live in the same household and be related either by blood or by marriage in order to qualify for the discount. 

Also having a homeowner’s policy with the same carrier falls in the bundle category and can also bring a discount up to 10% on the auto and 20% to 25% on the homeowners’ insurance.

Other Auto Insurance Laws in Alabama

Punishments for not having the state minimum insurance

Alabama car insurance laws require every driver to have active car insurance. Driving without it is considered a violation and the state may take the following actions:

  • Charge a driving penalty of $500–$1,000 
  • Suspend your registration and driver’s license for 180 days
  •  Send you to jail for 3 to 6 months. The penalty depends largely on the number of offenses on your record

Requirements for new residents

According to Alabama driving laws the car insurance requirements are the same for existent and new residents in the state, with a minimum of $25 thousand liability coverage for bodily injury per person/ $50 thousand total bodily injury liability coverage and $25 thousand limit for property damage.

Traffic Rules: Violations and Punishments

The Department of Public Safety (DPS) monitors and implements all the Alabama traffic laws along with driver activities in the state. If anyone commits a traffic violation, you will either get a fine or add points to your license. 

Some of those violations are the unsafe operation of a vehicle, failure to follow a traffic signal, speeding up to 25 miles above the limit, reckless driving, DUI, and DWI. For the less severe violations, you can get points added to your license but on the more severe ones you may end up paying fines and surcharges or losing your driver’s license.

Insurance rates will vary among companies, depending on factors such as age, driving record, credit history, and other additional criteria. Shopping around will help you if you’re looking for cheap car insurance in Alabama. Below we have a few guiding points that are a good place to start for car insurance to fit your needs.

Best Car Insurance Companies In Alabama

As the second-largest car insurance company in the U.S., GEICO is known for its low rates and the option to buy online or over the phone. With the long list of discounts that are offered and better than most claim satisfaction, GEICO is one of the best insurers in Alabama

The only downside is the limited network of agents in some areas. GEICO is best for good drivers with poor credit. They offer cheap quotes after a ticket too.

 

State Farm is the largest insurance provider for private passenger autos in the U.S. One of the highest-rated car insurance companies by JD Power, State Farm offers numerous rental car and travel expense coverages. State Farm is the best option in Alabama if you are looking for discounts for young drivers. 

 

As one of the nation’s leading car insurance providers, Allstate is the best option in Alabama for perks like accident forgiveness, safe driving, and new car replacement. It also offers the cheapest car insurance after a DUI. Customer support is the only downside for this company as they rank in the state average for these services.

Travelers offer standard car insurance coverages in Alabama with average to high insurance rates. But if you can qualify for their many discounts, insuring your car can be very affordable with the company. It is also the cheapest insurance after an at-fault accident for the state minimum or full coverage in the state of Alabama.

  • Nationwide 

Nationwide insurance offers in Alabama include basic, standard, and premium coverages and a lot of add-ons and discounts. They also allow for customized plans and are good for classic car insurance. The 24/7 claim support has been highly praised by customers but they offer high rates for drivers with unfavorable driving records.

Liberty Mutual provides similar coverage options in Alabama, rates, and discounts as the rest of the insurance providers. Good for extra options or optional coverages that can protect your vehicle. The insurer is bad for teenage drivers as they do not include them on their parents’ policies.

The third-largest insurance provider of private passenger auto insurance in the U.S. has a variety of car insurance options and offers great rates for young drivers on a policy. Progressive also offers young drivers in Alabama easy to earn discounts. The only drawback of the company is the average customer support and the 6-month standard term for car insurance policies.

Here is a brief comparison table with car insurance quotes from the above-mentioned companies in four different locations:

Car Insurance Quotes for Cities in Alabama

City in Alabama Birmingham Montgomery Huntsville Tuscaloosa
GEICO $2,774 $2,589 $2,262 $2,514
State Farm $2,898 $2,522 $2,444 $2,372
Allstate $2,437 $2,246 $2,252 $2,466
Travelers $2,334 $2,179 $2,198 $2,071
Nationwide $1,870 $1,843 $1,817 $1,729
Liberty Mutual $2,664 $2,470 $2,316 $2,238
Progressive $3,038 $2,679 $2,558 $2,751

Pros & Cons

The Pros

The Cons

Final Verdict

FAQs

What company offers the cheapest car insurance in Alabama?

There are many different factors at play that affect how an insurance company will determine your rate. Credit history, vehicle type, make and model, age, and driving history are just a few of them. 

Our research reveals that Nationwide and Travelers are carriers that offer the cheapest car insurance in Alabama. But, for the best rate possible in your particular situation, best to shop around.

How much is a good drivers discount in Alabama?

Drivers that have a clean record and no claims history can save anywhere from 10% to 30% on insurance.

Is Alabama a no-fault state?

No. Alabama is an at-fault or commonly known as a tort state. This means that the driver who causes the accident will use his insurance to pay for the other driver’s bills from the accident and damages. Depending on the coverage they have, their insurance might cover for their own damages too.

Do you need UM, UIM coverage in Alabama?

The Alabama Department of Motor Vehicles does not require a mandatory UM and UIM coverage.

What is the best Auto insurance for families and couples in Alabama?

For an Alabama couple, or a family with a clean driving and credit records history, GEICO and Travelers are the cheapest insurers in Alabama.

What is the best Alabama car insurance?

Offering a large list of discounts and good rates, GEICO is one of the best auto insurance companies in Alabama. Travelers and Nationwide are among the top ones in Alabama as well.