Best Cheap Car Insurance in Alabama in 2020

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With a population of 4.8 million and about 3.9 million licensed drivers, Alabama is a mixture of rural and urban areas. The state’s transportation history includes the first electric trolley system in the US, which went into operation in the state capital of Montgomery in 1886. Now long gone, the trolley system helped initiate early suburban development, by enabling residents to commute to homes outside the city center.

Factors such as age, driving record, and credit history all can make for a wide range of rates, and we found a broad range of rates between the major insurance companies included in our survey. All these variables make it important to shop around for the best rate for you. Our survey results can help you make the right choice. 

Cheapest Car Insurance Companies in Alabama

• USAA: $797
• Travelers: $1,033
• Geico: $1,145
• Nationwide: $1,311
• Allstate: $1,320
• Progressive: $1,377
• State Farm: $1,512
• Farmers: $1,814

How We Found the Cheapest Car Insurance Companies

At U.S. News, we’re all about helping people make life’s important decisions. Our college rankings, launched in 1983, set the standard in educational rankings. Our rankings in other fields, like healthcare, government, and the automotive sphere, help people and thought leaders make choices that make lives better. Now we’re continuing to empower you with the information you need to make the right choices for your life with our Cheapest Car Insurance Rankings. 

Our Study Rates

For this study, U.S. News worked with Quadrant Information Services to analyze a report of insurance rates in all 50 states from the nine largest national car insurance companies, though not every company operates in every state. Quadrant obtained publicly available rate data that car insurers file with state regulators. Our study rates are based on profiles for both male and female drivers aged 25, 35, and 60. Vehicles used include the 2015 Honda Civic, 2015 Toyota RAV4, and 2015 Ford F-150, with annual mileage ranging from 6,000 and 12,000. Three car insurance coverage levels were used, as were credit tiers of good, fair, and poor. Clean driving records and records with one accident, one speeding violation, and one DUI were also used in the calculations of certain driver archetypes. 

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To get the study rates shown here, we computed the mean rate for male and female drivers aged 25, 35, and 60 who drive 15,000 miles per year and have medium coverage, good credit, and a clean driving record. The rates shown here are for comparative purposes only and should not be considered “average” rates available by individual insurers. Because car insurance rates are based on individual factors, your car insurance rates will differ from the rates shown here. 

How Much Does Car Insurance Cost in Alabama?

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At about $1,289 per year, car insurance representative rates in Alabama fall slightly below the national average of $1,416 per year. We found the study rates could vary widely (by hundreds of dollars per year) depending on a profile's age, credit history, or driving record.

Alabama Car Insurance Rates by Age

The 25-year-old male and female profiles had the highest representative rates in our study, at $1,542 and $1,441, respectively. These study rates dropped to about $1,240 for the 35-year-old profiles, and fell further still to between $1,100 to $1,160 for the 60-year-old profiles. 

To determine the average rates based on gender and age, we created driver profiles for males and females in each of the following ages: 25 years, 35 years, and 60 years. The profiles also have a clean driving record, insurance coverage for 12,000 miles per year, a medium level of insurance coverage, and a good credit score. We used three vehicles for our driver profiles: the 2015 Honda Civic, 2015 Toyota RAV4, and 2015 Ford F-150.

Alabama Car Insurance Rates by Credit Score

In Alabama, our study found a wide range in representative rates between our profiles that had a good credit score and those with poor credit. The average study rate for the profile with good credit is $1,289, while the average study rate jumped to $2,350, or about 82%, for the profile with poor credit. State Farm penalized a poor credit rating especially harshly. Its average representative rate for this driver profile increased from $1,512 with good credit to around $4,679 with poor credit, an increase of about 210%.

Based on profiles of male and female drivers aged 25, 35, and 60, our study verified that credit scores affect car insurance rates. We created a profile for each level of credit score (good, fair, and poor) and assigned the profiles a clean driving record, a good credit score, a medium level of insurance coverage, and 12,000 miles of annual driving. The 2015 Honda Civic, 2015 Toyota RAV4, and 2015 Ford F-150 were the vehicles used in our analysis. 

Alabama Car Insurance Rates by Driving Record

The average study rate for a profile with a clean driving record in Alabama is $1,289. For the profile with a speeding violation, the representative rate increased to about $1,557. The profiles with an accident and a DUI had even higher study rates, at $1,762 and $1,924, respectively. The increase in representative rate from a clean record to a DUI is about 49%, which shows that driving record has a major impact on car insurance rates. Half the companies in the study showed the highest representative rates for the profile with a DUI, while the rest had higher study rates for the profile with an accident than for the one with a DUI.

To find out just how much of an effect a person's driving record has on insurance rates, we made driving profiles with a clean record, with one speeding violation, with one accident, and with one instance of driving under the influence (DUI). These driving record representative profiles were based on 25-, 35-, and 60-year-old males and females who drove 12,000 miles per year and had a medium level of insurance coverage and a good credit score. Vehicles used in the analysis were the 2015 Honda Civic, 2015 Toyota RAV4, and 2015 Ford F-150.

Alabama Car Insurance Rates by City

Larger cities such as Birmingham and Mobile had the highest average representative rates in the state, at $1,438 and $1,412, respectively. Smaller communities, such as Dothan and Decatur, were the cheapest at $1,191 and $1,208.

Within each state, insurance rates can vary dramatically from city to city. To get a sense of how these differences affect car insurance premiums, we looked at average representative rates across 10 of Iowa’s top cities. In our study, we used male and female driver profiles aged 25, 35, and 60 who put 12,000 miles on the odometer each year. Our profiles have medium insurance coverage, a clean driving record, and good credit. We included three vehicles in our study: the 2015 Honda Civic, 2015 Toyota RAV4, and 2015 Ford F-150.

Alabama Auto Insurance Minimum Coverage Requirements

Alabama requires three types of liability car insurance, and drivers are required to present either written or electronic proof of insurance to law enforcement on demand. Minimums are as follows: 

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

Other types of insurance are not required by law, but your bank or lending institution may require additional coverage if you finance your vehicle. It is likely your lender will require collision coverage to cover the cost of repairs, and comprehensive coverage for damage from storms, fire, vandalism, or theft. 

Even if you don’t finance or lease, adding additional coverage would be a good idea if your budget allows it. Car repairs aren’t cheap, and with the ever increasing cost of medical care even a short hospital stay could easily cost tens of thousands of dollars. 

Our survey found that adding additional coverage is not that expensive. Most companies in our survey only charged between $150 more annually for high coverage limits than low.

Cheapest Car Insurance in Alabama

We found that USAA had the cheapest car insurance in Alabama overall, at an average representative rate of $797, and Travelers is also a good choice, with an average representative rate of $1,033. Finding the best company for you will depend on your specific circumstances. Some companies are more affordable than others, and focusing on companies with low average study rates across the board is a good place to start, but bear in mind that even some of the companies with the lowest average may charge significantly more for some demographics.

To find which car insurance company offers the lowest rates, our study used representative driver profiles with good credit, medium insurance coverage, and a clean driving record. Our profiles included males and females aged 25, 35, and 60 who drove 12,000 miles per year. The vehicles used in our study were the 2015 Honda Civic, 2015 Toyota RAV4, and 2015 Ford F-150.

Why Car Insurance Rates Vary in Alabama 

Aside from your age, driving record, and other factors, the part of Alabama you live in makes a big difference. Densely populated areas with more cars and traffic tend to be more expensive than rural areas. This is simply because the odds of colliding with another vehicle are higher when you’re surrounded by more of them. Areas of higher crime also tend to have higher rates. 

How to Get the Cheapest Car Insurance in Alabama

To find the cheapest insurance for you, the best bet is to start by focusing on companies with the lowest rates overall. From there, you can fine tune your choices by looking at which ones are most competitive for drivers in your area and age group, with a similar credit history and driving record. Then either talk to an insurance agent, company representative, or check websites to get competitive quotes. 

No matter what your age, driving record, credit score, or where you live in Alabama, there are ways to save on car insurance. Most insurance companies offer a discount for bundling your car insurance with another policy, such as homeowners or renters insurance. Some insurers offer lower rates for members of certain credit unions or other organizations. 

Students who maintain good grades may be eligible for reduced rates, or parents may get a break if young drivers are away at school. And many insurers now offer discounted rates for drivers willing to install a device that tracks their behavior behind the wheel. 

W. Drew Senter, Longleaf Photography / Getty Images

The type of vehicle you drive is also likely to have an effect on rates. A convertible or high-performance model will often carry higher premiums than a sedan.

Another easy way to lower premiums is by opting for a higher deductible, which is the amount you pay for expenses after a crash before your insurance kicks in. Consider eliminating collision or comprehensive coverage if you have an older car that might not be worth repairing after even a fender-bender.

Even if you’re happy with your current insurance company, it’s a good idea to shop around once a year. Your rates will change over time, especially if you move to a different community or take a new job with a shorter commute. You can also look at reducing or dropping some coverages as your vehicle ages and depreciates. Always ask your agent what discounts you might be eligible for, or check insurance company websites for details.

Important Laws around Auto Insurance in Alabama

Insurance is required for all vehicles registered in Alabama, and must be presented before a vehicle is registered for use on public roads. In addition, either printed or electronic proof of insurance must be carried in the vehicle at all times. 

Three types of coverage are required, with the following minimums:

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

The penalty for driving without insurance is a fine of up to $500 for a first offense, and up to $1,000 for subsequent offenses. 

New residents are required to transfer their license, registration, and insurance to their Alabama address within 30 days. 

Alabama Driving Laws and Punishments

The use of any hand-held electronic device for texting behind the wheel is illegal in Alabama, punishable by a $25 fine for a first offense. A second offense carries a $50 fine, with fines rising to $75 for a third and subsequent offenses.In addition, drivers will be assessed two points on their license for each violation.

As of this writing, legislation to ban making or receiving voice calls is working its way through the Alabama State legislature. 

Under Alabama law, It is illegal to operate a motor vehicle with a concentration of .08% or more alcohol in the blood, or while under the influence of alcohol or drugs. For drivers under the age of 21, school bus or daycare drivers, the limit is .02%. Other commercial drivers have a limit of .04%. 

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A first conviction carries a fine of $600 to $2,100, a 90 day license suspension, and up to one year in jail. 

For a second offense, drivers face a fine of $1,100 to $5,100, a mandatory loss of license for one year, a minimum of 48 hours in jail or 20 hours community service, and up to one year in jail. 

A third offense means a fine of $2,100 to $10,100, three year loss of license, and a mandatory minimum of 60 days and up to one year in jail.

Fourth and repeat offenders face felony charges, with fines from $4,100 to $10,100, a five year license revocation, and a jail term of between one year and one day to ten years. 

Alabama Car Insurance FAQs

Is Car Insurance Required in Alabama?

Yes, with the following minimums: 

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

Which Cars Are Required To Be Insured in Alabama?

Any vehicle driven on the roads of Alabama must be registered and insured, with the exception of certain farm equipment.

When Should I Get Car Insurance in Alabama?

Proof of insurance is required before any vehicle can be registered in Alabama, and new residents have 30 days to transfer their license, registration, and insurance.

What Happens if My Car Is Not Properly Insured in Alabama?

Failing to maintain car insurance in Alabama will result in a $500 fine for a first offense, and up to a $1,000 fine for second and subsequent offenses.

Is Alabama a No-Fault State?

No, meaning that a driver found responsible for a crash is responsible for all damages. 

Do I Need Uninsured Motorist Coverage in Alabama?

No, uninsured motorist coverage is not required in Alabama.

Is Liability Insurance Required in Alabama?

Yes, liability insurance is required, with the following minimums:

• $25,000 per person bodily injury liability.
• $50,000 per accident bodily injury liability. 
• $25,000 per accident property damage liability.

Does Alabama Accept Digital Insurance Cards?

Yes, either printed or electronic proof of insurance is acceptable.

The Best Car Insurance Companies in 2020

Our Car Insurance Ranking

1.     USAA
2.     Geico
3.     Allstate
4.     State Farm
5.     Farmers
6.     Progressive
7.     American Family
8.     Nationwide
9.     Travelers

The Cheapest Car Insurance Companies in 2020

Average Annual Rates:

• USAA: $885
• Geico: $1,168
• State Farm: $1,234
• Travelers: $1,267
• Progressive: $1,373
• American Family: $1,391
• Farmers: $1,682
• Nationwide: $1,864
• Allstate: $1,880

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