Car Insurance in Alaska — The Best and the Cheapest Options for 2021
Alaska drivers have it good. They get to drive on some of the most beautiful roads in the country and pay a car insurance premium that’s almost 20% lower than the national average.
But guess what, it can get even better.
We will show you how to get the lowest car insurance Alaska rate possible and further increase your savings. Rest easy, we won’t ask you to crunch numbers or do time-consuming research — that we have already done for you.
We grabbed a quote from several auto insurers in The Last Frontier and evaluated their performance on several other important factors and ranked them accordingly.
In short, all you got to do is check which player ranks best on the parameters most relevant to you, and you will be all set.
The Best Car Insurance in Alaska
- GEICO — The Overall Winner
- Progressive — The Cheapest Option
- Allstate — The Best for Discounts/Optional Coverage
- USAA — The Best for Military
- The Hartford — The Best for Customer Service
The Overall Winner: GEICO
GEICO’s tagline “15 mins could save you 15% or more on car insurance” is as catchy a slogan as any. But the all-important question is: how much truth is there in this claim?
Well, the GEICO car insurance company delivers on its promise in Alaska. At $115 a month, it is the second-most affordable option. On top of that, GEICO is in the pink of health financially. It notched up an “A++” rating from A.M. Best, which is the highest rating awarded. In short, you can count on the insurer to honor its end of the bargain whenever you file a claim, whether that’s tomorrow or months, even years, down the line.
That said, GEICO didn’t top our list of best Alaska auto insurance companies with affordable rates and robust financial health alone. Its online tools are also as good as they come.
Its sleek and intuitively-designed website impresses you right off while its mobile app offers features that go above and beyond the industry’s standards. For example, you can use the GEICO smartphone app to chat with a representative on the go or find the cheapest gas station closest to you.
However, we have one gripe with GEICO. Alaska drivers who place a high value on customer service might not find it a great option since it could muster only 3 stars out of 5 in the 2019 J.D. Power regional study.
Apart from that, GECO has a lot going for it. Its rates are affordable, financial strength is rock-solid, and online tools second to none.
Choose GEICO if you want reasonably-priced auto insurance in AK that’s easy to manage on the go.
Look elsewhere if your priority is top-class customer service.
The Cheapest Option: Progressive
Aggressive and funny, Progressive ads claim customers will save money by choosing them for car insurance. But is that really the case?
Yes, indeed. Progressive does make good on its promise of offering low-cost auto insurance in The Land of the Midnight Sun. At $96 a month, it is the cheapest AK auto insurance company by a country mile.
Apart from affordable rates, Progressive offers some unique features and coverage options. For instance, its Name Your Price tool makes it possible for you to not do any research or crunch numbers and still get great value for money. Simply state the price you are comfortable with and the tool will throw up various coverage options available at your rate in less than two winks.
Need a special kind of optional coverage, like pet medical bills or custom parts and equipment value? Well, you don’t need to look further than Progressive auto insurance. Alaska drivers can add these add-ons, plus many others, to their policy for the extra cost.
The insurer is also in good shape financially, as reflected by its “A+” rating from A.M. Best. However, customer service proves to be Progressive’s Achilles Heel in Alaska. It could muster only two stars out of five in the 2019 J.D. Power regional study. All the same, if finding cheap car insurance in Alaska is your priority, Progressive is one name you may not want to ignore.
Choose Progressive for its affordable rates.
Look elsewhere if top-shelf customer service is a priority.
The Best for Its Variety of Discounts/Optional Coverages: Allstate
Allstate offers dependable protection and comes across as an insurer with strong financial standing. All this is in keeping with its “good hands” promise, but the real question is — should price-conscious drivers in Alaska keep Allstate Insurance on their radar?
Sort of. Allstate is not the cheapest auto insurer around. In fact, its premiums are decidedly above the state’s average. All the same, it comes across as a good option for certain drivers, especially those who pride themselves on their driving abilities. The insurer handsomely rewards such drivers, offering not one but three discount programs: Safe Driving Bonus Check, Allstate Rewards program, and vanishing deductible.
We also recommend getting auto insurance quotes from Allstate if you are in need of a special type of coverage, such as classic car insurance, rental car insurance, or sound system insurance.
Another feature that sets Allstate apart is its unique claims satisfaction guarantee, which promises a refund in case you were not happy with the way the insurer handled your claim. Also, Allstate is rock-solid financially, managing an “A+” rating in A.M. Best.
In the customer service department, Allstate puts in a decent performance, notching up three stars and ranking fifth overall (out of 12 insurers) in the J.D. Power regional study.
To sum it up, even though Allstate doesn’t provide cheap Alaska auto insurance, it is worth a shot, particularly if you can take full advantage of its safe driving bonuses or need special add-ons.
Consider Allstate for its unparalleled selection of discounts and coverages.
Look elsewhere if you need competitively-priced insurance or top-shelf service.
Best for Military: USAA
Thanks to its affordable rates and top-class customer satisfaction ratings, USAA is an obvious choice for military personnel and their family members for car insurance.
However, USAA offers much more than car insurance. It is also a one-stop-shop for life and home insurance in Alaska, as well as investing and banking products. This makes it a convenient option for all those who like to bundle services from a single provider. Continuing with the positives, USAA’s financial standing is of the top drawer, as indicated by its “A++” rating from A.M. Best.
All in all, USAA puts in a good show in all departments. If you qualify, strongly consider it.
Choose USAA for its reasonably-priced premiums and superlative customer service.
Look elsewhere if you’re not eligible.
Best for Customer Service: The Hartford
If customer service, not price, is the biggest factor for purchasing car insurance in Alaska, you simply can’t ignore The Hartford. Ranked third overall out of 12 insurers, it earned an impressive 4-star rating in the 2019 J.D. Power study for Northwest America.
Besides good customer service ratings, The Hartford has several aces up its sleeve. For starters, it offers special benefits and rates to the members of the American Association of Retired Persons. So if you are an AAR member and looking for an affordable auto insurance Alaska provider, don’t forget to check this insurer.
Continuing with the positives, The Hartford is just about as good as any and better than most in the financial strength department. A.M. Best awards it the second-highest rating of “A+.” This indicates that the insurer will not look for legal loopholes or excuses when you make a claim.
On the downside, expect to pay a 10% high cancelation fee if you prematurely terminate your car insurance Alaska policy. Also, The Hartford doesn’t offer as many discounts than most big players, such as Allstate and Progressive.
However, these are not major flaws. If you are an older driver or someone who values customer service, The Hartford is one name you would want to have on your list.
Choose The Hartford for its quality customer service and special rates for older drivers.
Look elsewhere if you want the best bang for your buck.
Cheapest Car Insurance in Alaska (By City)
We requested a quote, which included full coverage limits, from multiple auto insurers in five major cities in Alaska to determine the best options in each city. Our referenced driver was a 40-year-old driver with a clean driving record.
Anchorage, the most populous city in The Last Frontier, is home to more than 290,000 hearty souls (or over 40% of the state’s population). It is a four-time winner of the All-American City Award and known for its cultural sites, none more famous than the Alaska Native Heritage Center.
Those looking for affordable auto insurance in Anchorage, Alaska, should start their search with Progressive and GEICO. While Progressive is the cheapest provider in Anchorage, what it offers in potential savings may be impacted by its below-par customer service ratings. On the other hand, GEICO strikes a balance between price and quality of customer service.
Another good option for budget buyers is State Farm. But if you’re a safe driver or someone who wants a special sort of Alaska car insurance coverage, such as rental car coverage, Allstate should definitely in your shortlist.
With a population of over 100,000, Fairbanks — also called the Golden Heart City, Gateway to the Bush, or Hub of the Interior — is the second-largest city. The city has a university, as well as an Air Force Base and an Army Base. It is best known for northern lights, dog mushing, and — you guessed it — extreme cold; temperatures can drop to as low as −62 degrees in winter.
Car insurance in Fairbanks is cheaper than in Anchorage. The average premium rate for a 40-year-old driver in Fairbanks is $130, compared to $148 in Anchorage. Progressive, and this is no surprise, emerges as the most cost-effective option in Fairbanks as well. However, going with it means compromising on customer service. If you don’t want to make that tradeoff, GEICO might be a better option.
Those looking for special features such as Lifetime Repair Guarantee or Better Car Replacement might want to go with Liberty Mutual. Alaska drivers who need rental car insurance or tons of coverage options, on the other hand, are likely to find Allstate a better choice.
Nestled between two beautiful lakes — Lake Lucille and Wasilla Lake — Wasilla is the sixth-largest city in Alaska with a population of just over 8,000. The city, not unsurprisingly, has a small-town feel, even though it is an important hub of the Mat-Su Valley.
Looking for low-cost car insurance? Start your search with Progressive and GEICO. Wasilla drivers who place a higher value on customer service, on the other hand, might be better off with The Hartford. Other names worth adding to your list include Allstate, State Farm, and Liberty Mutual.
Located 42 miles northeast of Anchorage, Palmer is framed in breathtaking beauty, with the Talkeetna Mountains to its north and the Chugach Mountains to its east and south. The city has a population of just over 7,000.
Progressive and GEICO are the two most cost-effective options. That said, when it comes to affordability, State Farm in Palmer, AK is not far behind. Besides these three companies, Allstate and The Hartford also deserve your attention.
Homer, also called the City of Peonies, is regarded as the Eco and Adventure tourism capital of The Last Frontier. It is best known for great fishing, hiking, bear viewing, and kayaking. The city is home to nearly 5,600 people.
Like elsewhere in Alaska, Progressive delivers the best bargain here too. However, what’s different is that the title of the second most affordable car insurer goes not to GEICO but State Farm in Homer, AK. The Hartford, in contrast, emerges as the automatic choice for those who want great customer service.
Liberty Mutual is an appealing option for drivers who want to add special coverages such as Better Car Replacement or Lifetime Repair Guarantee to their policy. On the other hand, if you want an insurer that handsomely rewards safe drivers or offer classic car insurance, go with Allstate.
Alaska Car Insurance Laws
Alaska Automobile Insurance Plan (AK AIP)
If you have a history of traffic violations or accidents, you may find it tough to buy coverage from the voluntary market. This is when the Alaska Automobile Insurance Plan (AK AIP) can get you off the hook.
AK AIP serves dual functions. One, it makes sure drivers with a spotty record can get coverage. Two, it spreads the cost of insuring such drivers across all car insurance companies in AK in proportion to their market share.
To get coverage via AK AIP, you must have an Alaska driver’s license and be able to show that you tried to obtain coverage from the standard market but were unable to do so. AK AIP will then randomly assign you an insurer for a period of 3 years. After this, you will be able to purchase car insurance from the voluntary market.
Alaska Car Insurance Requirements
According to Alaska’s Department of Administration, drivers must carry the following bare minimum auto insurance all the time:
Bodily Injury Liability; $50,000 per person/$100,000 per accident — This type of coverage, which pays for the injuries others suffer in an accident caused by you, is capped at $50,000 per person per accident and $100,000 per accident (in case two or more individuals are hurt).
Property Damage Liability; $25,000 per accident — This type of coverage, which compensates others for damages their property incur in an accident caused by you, is capped at $25,000 per accident.
SR22 Insurance in Alaska
In certain situations, you may have to ask your Alaska car insurance company to file an SR22 certificate with the local DMV on your behalf. For instance, a DUI citation may trigger a need for SR22, as can a citation for driving without the state’s mandatory coverage or a series of minor traffic violations.
An SR22 certificate tells the authorities that you have the bare minimum coverage, and hence are fit to drive. However, filing an SR22 is anything but fun. For starters, not every auto insurance company in AK files them, but that’s not even the half of it.
An SR22 requirement is likely to push your insurance premiums up considerably. Insurers see such drivers as high risk and consequently, charge them more to cover for the increased risk.
How much more? Well, that depends on the violation that made SR22 filing a necessity.
However, all is not lost. Some insurers specialize in high-risk drivers, such as Progressive, and you may well be able to obtain a reasonable quote from them.
Auto Insurance in Alaska for New Residents
If you want to buy insurance in the Last Frontier, you must be a resident or prove that your car is mostly parked there. Active members of the US military, however, are exempted from this rule.
As per AAA’s guidelines on Alaska’s car insurance laws, non-residents who accept employment there must get their vehicles registered within 10 days of starting work.
Price Optimization in Alaska
Do Alaska auto insurance providers use price optimization?
This is one question we get asked a lot. So we decided to lay out the details here.
First, let’s understand price optimization. Contrary to the general perception, car insurance rates may not depend on just your risk profile. Your loyalty may matter as well — but not in the way you think.
Insurance companies often employ data mining tools to find out customers who are less likely to change providers and the percentage of a price increase they will tolerate before changing providers. This practice is called price optimization.
As you can see, loyalty may work against you rather than for you in car insurance.
Thankfully, Alaska car insurance companies are prohibited from using non-risk factors to determine premium rates. In December 2015, Alaska became the 17th US state to ban price optimization.
So if you live in The Last Frontier, you can rest assured knowing your insurer will charge you only for the kind of risk you represent to them — and nothing else.
No-Fault Car Insurance Laws in Alaska
Alaska follows a “fault” system for assigning financial responsibility for injury, property damage, and other losses occurring from a car accident. That is, the at-fault driver’s AK car insurance company will compensate the other party for damages they suffer in an auto accident, up to the policy limits.
Also, the other party can sue the at-fault driver if they think they deserve more compensation. For this reason, Alaska drivers should strongly consider taking more liability and property damage coverage than mandated by the state.
That said, liability coverage and property damage coverage don’t offer any protection against an uninsured motorist or vehicle damage stemming from events other than a collision, such as fire, theft, hail, etc. That’s why adding uninsured/underinsured motorist coverage and comprehensive coverage to your policy might also be a good idea.
How to Get Cheap Auto Insurance in Alaska
Check Car Insurance Reviews
When shopping for car insurance, don’t just look at the price. Financial strength ratings, which indicate the ability of an insurer to pay claims, is important as well — as is customer satisfaction ratings. They may not seem important now but can make a world of difference to your experience when you make a claim. Other factors to look at include online tools, range of optional coverages, and availability.
In this post, we took all these factors, plus some more, into consideration while reviewing the listed companies. But if you would like more options, have a look at our car insurance rankings, in which we studied no fewer than two dozen insurers.
Compare Car Insurance Quotes in Alaska
None of us want to spend a dime more on auto insurance than we have to, but finding the cheapest rate is not always as easy as one-two-three.
Some providers spend tons of money on ads to convince you their rate is the best. However, the fact of the matter is: no auto insurance company is the cheapest for everyone. The auto insurance Alaska company that offers a jaw-dropping bargain to your friend might not be the most pocket-friendly for you.
The only way to ensure you are getting the best bang for the buck in The Last Frontier is to request a quote from multiple providers and compare their rates.
See Who Provides the Highest Discounts
Auto Insurance companies offer a number of discounts. The more discounts you can avail, the better.
Some of the common discount programs offered by car insurance Alaska companies are as follows:
- Bundle Discount — Pair another insurance product with auto insurance and see your premium rates drop.
- Multiple Vehicle Discount — Have more than one vehicle to insure? Get them covered with the same provider to pile on the savings.
- Good Student Discount — A high GPA score can help you save up to 20% on your car insurance.
- Good Driving Record — An unblemished driving record should be rewarded, right? Well, most Alaska car insurance companies tend to agree and offer bonuses to such drivers.
- Tracking Driving Habits — Show your insurer your driving is top-class and win handsome discounts, up to 30%.
Frequently Asked Questions
1. How much is auto insurance in Alaska?
Based on our research, the average premium rate for a 40-year-old driver with a clean record is $137. Of course, depending on your profile, you may have to pay more or less for coverage. Typically, auto insurance Alaska companies view students, new drivers, and drivers with poor driving records as high risk and quote them a higher rate.
2. Do you need auto insurance in Alaska?
Yes, you do. Driving without valid auto insurance is illegal in The Land of the Midnight Sun, much like elsewhere in the US.
3. What is the penalty for driving without insurance in Alaska?
Penalties for the first-time offense include a fine of $500 and a license suspension of your driver’s license. Any following offenses will entail a longer license suspension, in addition to the $500 fine.
4. Is car insurance expensive in Alaska?
The average auto insurance rate in The Last Frontier is lower than the national average. But if you want the cheapest car insurance Alaska money can buy, you will have to do some research. Namely, grab a quote from multiple providers and compare them.
5. Is Alaska a no-fault state?
No, it is not. Alaska is a “fault” state. That is, every driver is held responsible for the mistakes they make.