Alabama Auto Insurance (2021) — Compared by Experts
Looking for affordable car insurance? Alabama drivers, on average, pay nearly 5% less for auto insurance than the national average, but you can do way better if you pick the right insurer.
Our team has compiled quotes from all over the Yellowhammer State, reviewed insurers on multiple parameters, and presented all the important information below to help you find the auto insurance that’s perfect for your needs. We’ll help you make an expert decision quickly so that you can get back to things you love doing in life.
The Best for Car Insurance in Alabama
- GEICO — The Overall Best
- Progressive — The Cheapest Option
- Allstate — Best for Coverage Options
- Liberty Mutual — Best for Car Replacement Coverage
- USAA — Best for Military
The Overall Winner: GEICO
GEICO has made a name for itself in the US auto insurance industry with its competitively-priced products. Does it live up to its reputation in the Yellowhammer State?
In short, the answer is “Yes.”
While not the cheapest car insurance Alabama provider, GEICO is among the more affordable carriers in the state. Apart from that, it also packs a punch in the financial strength department, notching up the best rating of “A++” from A.M. Best.
GEICO is a few steps ahead of most insurers on the tech front as well. Its smartphone app boasts better features than the apps currently offered by Progressive, Liberty Mutual, and Travelers — three other national players that offer cheap car insurance in Alabama. In addition to providing convenient options to pay bills and manage policy information, GEICO’s mobile app lets you chat with a representative on-the-go.
The insurer also puts in a decent show in the customer service department, earning 3 stars out of 5 in J.D. Power regional study for Alabama (Southeast region). However, GEICO doesn’t provide GAP insurance, nor does it have an intensive network of agents.
All in all, GEICO performs strongly across the board in the Cotton State, and you should definitely contact it for car insurance quotes. Alabama drivers who need GAP coverage, however, must look elsewhere.
Consider GEICO for its competitively-priced premiums, decent customer service, and top-notch financial strength.
Look elsewhere if you are looking for GAP insurance.
The Cheapest Option: Progressive
Progressive’s website claims that drivers who switch to them pay $796 less a year on average. Is that really the case? Or is this just a cheap marketing gimmick to attract new customers?
We looked under the hood to find out the truth. Our research shows Progressive indeed leads the pack of cheap car insurance Alabama providers. At $140 a month, its average rate is a whopping 32% lower than the state’s average.
The insurer also impressed us with its innovative product offerings, one in particular. Name Your Price tool makes finding car insurance that fits your budget as easy as one-two-three. Simply type your price, and the tool will instantly let you know which coverage options are available. No more spending hours digging out the best rate, hunting discounts, and tweaking coverages.
However, Progressive’s cheap car insurance coverage involves a tradeoff in customer service. The insurer earned a lowly 11th rank (out of 16 insurers) in the J.D. Power regional study.
The good part is that this is its only drawback. Progressive, much like other big players, is on a solid financial footing, receiving the second-best rating from A.M. Best.
In the end, drivers looking for a great bargain should first contact Progressive for car insurance quotes. Alabama drivers for whom experience is more valuable than the price tag may find GEICO or State Farm a better option.
Consider Progressive for its dirt-cheap premiums.
Look elsewhere if top-notch customer service is your main priority.
Best for Coverage Options: Allstate
Allstate is the third leading auto insurer in the US, but can you count on it to provide dependable coverage at reasonable rates?
Allstate’s coverage is just about as dependable as they come. Unlike your average car insurance Alabama provider, the insurer has three types of reward programs for safe drivers.
It is also one of the few players, if not the only one, to offer a claims satisfaction guarantee. In simple English, this means you get a credit on your policy if you don’t approve the way the insurer handled your claim. Furthermore, Allstate is among the handful of players to offer less-common add-ons, such as classic car insurance and car stereo insurance.
While all this does seem to suggest that with Allstate you’ll be indeed in “good hands,” you can decidedly forget about getting the best car insurance rates in Alabama. Providing dependable coverage is Allstate’s forte, but not low-cost insurance. Its rates are considerably higher than the state’s average.
The insurer also falters in customer service, earning the second-lowest spot in the regional survey. Thankfully, it holds its own in the financial strength department, as revealed by its A.M. Best rating of “A+.”
To sum it up, if you’re looking for affordable Alabama car insurance rates or best customer service, Allstate is not for you. But do consider it if you want unique add-ons or a claim satisfaction guarantee or multiple safe driving discounts.
Consider Allstate for its unique coverage options.
Look elsewhere if you’re a budget buyer.
Best for Car Replacement Insurance: Liberty Mutual
If there were prizes for customer service in Alabama, Liberty Mutual would grab none. The insurer is ranked dead-last in the latest J.D. Power regional study. Nonetheless, the insurer can be an appealing option for certain drivers.
If you want affordable car insurance in Alabama, you may want to keep Liberty Mutual on your radar. In most cities, its rates are competitively-priced. The insurer may also be right up your alley if you need special optional coverage, such as car replacement insurance. If your baby gets totaled, the insurer promises to replace it with a model that’s one year newer and has run 15,000 miles fewer.
Some other notable features offered by Liberty Mutual include Liberty Mutual Deductible fund and Lifetime Repair Guarantee. Much like other cheap Alabama car insurance providers on our list, Liberty Mutual received an impressive financial strength rating from A.M. Best.
Consider Liberty Mutual for its low premiums and new car replacement coverage.
Look elsewhere if you want top-shelf service.
Best for Military: USAA
USAA is one of the big players in the US auto insurance industry — and it’s not hard to see why this is so. Its average Alabama car insurance rate is among the lowest while its customer service and financial strength ratings are just about as good as they get. The insurer earned 4 stars in overall satisfaction for the Alabama region from J.D. Power and the highest rating of “A++” from A.M. Best.
However, USAA doesn’t cover everyone. Its products are reserved only for those who are associated with the US Military and their close ones. If you qualify for USAA auto insurance, give it a shot. You’re not likely to be disappointed.
Consider USAA for its solid overall performance.
Look elsewhere if you don’t meet the selection criteria.
Cheapest Car Insurance in Alabama (By City)
We requested quotes from all top Alabama players in eight major cities. Our quote included full coverage limits and was for a male driver (age 40). Here’s our choice for the best auto insurance in these cities.
Birmingham is the most populous city in the Yellowhammer State with a population of over 209,000 people. Frequently rated as one of the best places to live in Alabama, Birmingham is known for its superior educational institutions, great food, and family-friendly atmosphere.
The average car insurance premium in Birmingham is roughly 8% higher than the state’s average. Nevertheless, there are quite a few players that offer drivers a pretty good deal. With an average monthly premium of $183, State Farm tops our list of providers offering cheap car insurance in Birmingham, Alabama. However, the competitive rate is not the only reason why you should consider this insurer. State Farm also rocks in the customer service department, as reflected by its 4-star rating in the J.D. Power regional study. Other viable options in Birmingham include Nationwide, GEICO, and Amica Mutual.
Montgomery is the capital of Alabama and has a population of 227,000. It is known for historical landmarks and events such as the Montgomery Bus Boycott, Dexter Avenue Memorial Church, Alabama State Capitol, and the First White House of the Confederacy.
Car insurance in Montgomery, Alabama is considerably more affordable compared to Birmingham. Drivers here on average pay 17% less than motorists in Birmingham. You can sweeten the deal even further by going with Progressive, Liberty Mutual, or GEICO — all three have rates much lower than the city’s average.
While GEICO is marginally more expensive than Liberty Mutual and considerably costlier than Progressive — the cheapest car insurance Alabama provider by some distance — it boasts a much better customer service track record than the two. For this reason, we believe it delivers a better all-round package than its competitors.
Huntsville is the fourth-largest city in the Cotton State with a population of around 199,000. The city is also known as Rocket City and is home to NASA’s Marshall Space Flight Center, as well as the United States Army Aviation and Missile Command.
Huntsville is the second-most expensive city for car insurance in the Yellowhammer State, with the average premium being nearly 17% higher than the state’s average. Be that as it may, those who shop around can still easily find cheap car insurance in Huntsville, Alabama. Surprisingly it’s not GEICO, our overall winner, but Travelers that delivers the best bargain. Priced at $153 a month, its car insurance products should appeal to all budget buyers.
Mind you, Travelers’ customer service track record is nothing to brag about. The insurer could manage only 2 stars out of 5 in J.D. Power’s regional study. If that’s important to you, look at Amica Mutual or GEICO, two top-ranking providers of car insurance in Huntsville, Alabama.
Situated on the Mobile River, Mobile is known for its museums, historical architecture, and, of course, baseball legends. The city boasts the most players in Major League Baseball’s Hall of Fame, except for Los Angeles and New York. The list includes, among others, Ozzie Smith, Satchel Page, and Hank Aaron. Tim Cook, Apple’s CEO, is another famous Mobilian.
The average rate of car insurance in Mobile, Alabama is $215/month. This is roughly the same as the state’s average. Progressive ($140/month) and Nationwide ($159/month) emerge as the two most cost-effective providers. Other options include Liberty Mutual and GEICO.
Situated on the Black Warrior River, Tuscaloosa is the fifth-largest city in Alabama with a population of almost 101,000. The city, commonly called T-Town by Alabamians, is best known for the achievements of the University of Alabama on the football pitch.
Tuscaloosa emerges at the costliest city for car insurance, with the average monthly premium of $261. Those looking for cheap car insurance in Tuscaloosa, Alabama, may want to keep Progressive at the top of their list. Its average premium is 26% lower than the city’s average. Of course, if you want quality customer service, GEICO is a good option too.
Dothan is the seventh-largest city in the Yellowhammer State with an estimated population of roughly 68,000. Dothan is fondly called “The Peanut Capital of the World” since nearly 25% of the national peanut crop is produced in areas around it.
Dothan is considerably cheaper than Tuscaloosa when it comes to auto insurance. Nationwide, Farmers, and Liberty Mutual are a few car insurance companies in Dothan, Alabama, that deliver a great bargain. High-risk drivers can also add Progressive to their list since the insurer typically offers competitive rates to such motorists. Allstate, on the other hand, might appeal to drivers with unique requirements, such as classic car insurance.
Located in Lee County, Alabama, Auburn has a population of over 65,738. It is the biggest city in eastern Alabama and home to Auburn University. Auburn is unofficially nicknamed “The Loveliest Village On The Plains.”
Car insurance in Auburn, Alabama, is cheaper than all but one city in the state. Progressive emerges as the most pocket-friendly insurer, with an average premium that’s 39% cheaper than the city’s average and 29% lower than its next competitor — Farmers. Other names worth keeping on your radar include GEICO and Allstate.
Located along the west bank of the Chattahoochee River in East Alabama, Phenix City is an all-American city with a population of over 36,000. It is the seat of Russell County and is home to the campus of Troy University and Chattahoochee Valley Community College.
The average rate of car insurance in Phenix City, Alabama, is the lowest in the state. Like in Auburn and a few other cities, Progressive offers the best bang for the buck in Phenix City. Its average monthly premium is roughly 32% lower than the city’s average. However, Progressive doesn’t put an impressive show in the customer service department. If your priority is premium service, check out State Farm instead. Allstate, in contrast, may be a good fit if you’re looking for classic car insurance.
AL Auto Insurance Laws
Alabama Automobile Insurance Plan (AL AIP)
Every driver in the Cotton State must have the state’s bare minimum auto insurance coverage. Nevertheless, that doesn’t mean carriers in Alabama are so good that they offer coverage to everyone who comes asking. Frequently, they reject applicants with a spotty record. So, does this mean it’s the end of the road for them?
Heck, no. AL AIP is there to see that such drivers get what they want.
Created in 1984, AL AIP ensures that as many Alabama drivers as possible get the basic coverage. It also makes sure that the state’s difficult drivers are proportionally distributed among car insurance companies in Alabama. For instance, if GEICO writes 12% of premiums in the region, it must take the responsibility of covering up to 12% motorists coming through AL AIP.
While AL AIP is a friend to high-risk drivers, it doesn’t provide car insurance itself. Instead, it allocates you to a carrier, who takes you under their wings for at least 3 years. After that, Alabama auto insurance companies are likely to offer you coverage the normal way.
Even though AL AIP is ready to chip in on your behalf, you may not want to scutter to it on the first refusal. A better strategy is to try multiple carriers before putting out an SOS. That’s because auto insurance coverage procured through AL AIP is considerably more expensive than standard insurance.
Alabama Car Insurance Requirements
Motorists need the following insurance coverage before they take the wheel in the Yellowhammer State.
- Bodily Injury Liability — $25,000 per person/$50,000 per accident. This coverage chips in when you injure others in a crash. It pays for their medical bills and other expenses.
- Property Damage Liability — $50,000 per accident. If you ever cause an accident, this coverage will compensate others for damage done to their property.
SR22 Insurance AL
Need an SR22 in Alabama to retain or reinstate your driving license?
You’re not alone. An SR22 requirement is pretty common and is usually triggered by a serious traffic violation, like driving without insurance or a DUI, or a series of several minor driving offenses in quick succession.
A few things to keep in mind about SR22 are as follows:
- SR22 is not any sort of special auto insurance coverage; instead, it is a form needed to prove you’re sufficiently insured.
- Your Alabama auto insurance company needs to file SR22 with the state. The fee for it usually ranges between $15 and $25. However, not every carrier provides this facility.
- An SR22 requirement invariably means you’ll have to fork out more money for coverage than before. Car insurance companies rate drivers with an SR22 requirement as high-risk and, consequently, bill them a higher rate to compensate for the increased risk of a claim payout.
- If you keep your driving record clean and insurance policy active, you could well be paying standard car insurance Alabama rates in three years’ time.
Price Optimization in Alabama
Did you know that nearly half of US insurers use price optimization to set premium rates?
Price optimization refers to the technique of using non-risk factors to calculate insurance premiums. Non-risk factors, as the name suggests, are those that have got nothing to do with your risk. For example, your online shopping behavior and job history don’t make you more or less likely to file a claim in any way.
If so, why do Alabama car insurance companies take non-risk factors into account?
For the simplest reason — to maximize their profits. With the help of such data, carriers try to predict who’s likely to shop around for other companies and who’s not. Next, they bill higher premium rates to drivers who are less inclined to switch their carriers.
This brings us to the all-important question: how can you stop your insurance company in Alabama from factoring in your personal details?
The simple answer is — you can’t; that’s the job of your state. Some US states clamped down on price optimization, but the majority of them continue to look the other way. Sadly for you, Alabama falls into the second category.
All the same, that doesn’t mean you should let carriers have a field day. You can stop them from successfully carrying out their dubious intentions by comparing quotes from different insurers every now and then. This will be enough to send the message across loud and clear that you’re no pushover.
No-Fault Alabama Car Insurance Law
Alabama is a Tort state, according to the Alabama Department of Insurance. Meaning that, in the event of a crash, the insurer of the at-fault driver must cover the medical bills and/or property damages incurred by the victim, up to the policy limits.
Since Alabama follows an at-fault system, the victim can file a personal suit against the negligent driver if the compensation received from their Alabama car insurance provider is insufficient. However, to recover compensation, the victim must not be all at fault.
Alabama is one of the only four states in the country that follows the pure contributory negligence model. In this system, the Plaintiff can recover compensation for their injuries only if the other driver was 100% at fault.
If you are ever involved in an accident and the other party successfully files a lawsuit, you could end up in big trouble. Precisely for this reason, strongly consider increasing your car insurance Alabama policy limits beyond the state’s minimum. Also, consider taking up uninsured/underinsured motorist coverage, which protects you against hit-and-run motorists and drivers with little or no auto insurance.
Car Insurance for New Residents in Alabama
According to AAA’s guideline on car insurance laws in Alabama, new residents must ensure they register their vehicles within 30 days of taking up the state’s residency. Military Personnel, however, may maintain an out-of-state registration.
How to Get the Best Car Insurance in Alabama
Check Auto Insurance Reviews
Along with the rates, look at how different insurers perform in the departments of customer service, financial strength, and online tools. In this post, we’ve reviewed five major Alabama car insurers. In case you need more options to make an informed decision, take a look at our car insurance rankings. Here you’ll find detailed information about two dozen US insurers, both national and regional.
Compare Car Insurance Quotes in Alabama
Getting online to compare auto insurance quotes is no one’s idea of fun, but this is one activity that’s worth the trouble. You can save several dollars a month by shopping around and the best part is — the whole process doesn’t take up more than a couple of hours.
Determine Who Provides the Best Discount
An easy way to ensure you don’t pay a dime extra for car insurance is by making full use of discounts available to you. Some common discounts offered by car insurers in the Yellowhammer State include the good driving discount, the multiple policy discount, the multi-line discount, the safe driving discount, and the good student discount.
Frequently Asked Questions
1. What is the penalty for not having car insurance in Alabama?
If you get caught flouting the Mandatory Liability Insurance Law in Alabama, you will have to pay a fine of no more than $500. Every subsequent violation can set you back by up to $1,000. Worse yet, the state may impound your vehicle and/or suspend your driver’s license.
In short, driving without proof of insurance in the Cotton State can cost you dearly and is hardly worth the trouble.
2. Who has cheaper car insurance Alabama or Georgia?
The average cost of auto insurance in Alabama is 2.1% cheaper than Georgia’s average.
3. How much is the no-insurance ticket in Alabama?
The no-insurance ticket in the Yellowhammer State for the first offense is up to $500. If you’re caught again, you would be staring at a fine of up to $1,000.
4. Is Alabama a PIP state?
No, it is not. Alabama uses the at-fault system, just like its neighbor Georgia.
5. How much is car insurance in Alabama per month?
Alabama drivers on average pay $207 a month for car insurance, according to our research. We gathered full coverage car insurance quotes from several key players in the state for a 40-year-old driver with a spotless record driving a 2018 Honda Accord.
Since insurers assess each driver differently, you may get a different figure than ours. Also, new drivers typically get billed at a higher rate, as do high-risk and young drivers. Nevertheless, shopping around can help you find the best car insurance Alabama rate, regardless of your driving profile.