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The Best Cheap Car Insurance Companies for Alabama Drivers in 2020

The Alabama Department of Insurance has a premium comparison tool that shoppers can utilize to compare different types of drivers with various ZIP codes throughout the state, which is a great resource for deciding which companies to call or contact for car insurance quotes. Large carriers like Nationwide, Country Mutual and Progressive are all listed in the comparison tool, as well as USAA (a company that serves active military members and veterans and their families) and local insurance carrier Alfa Insurance.

The table below lists various insurance companies and the approximate monthly premium cost for an average driver. However, these numbers are rough estimates and may vary greatly from any individual quote that would pertain to your unique driving history and situation.

Company
Amount
1. ALFA
In 2020 ALFA ranked #1 in Alabama for the cheapest car insurance on average.
$981
per year
2. Allstate
In 2020 Allstate ranked #2 in Alabama for the cheapest car insurance on average.
$1,129
per year
3. GEICO
In 2020 GEICO ranked #3 in Alabama for the cheapest car insurance on average.
$1,155
per year
4. State Farm
In 2020 State Farm ranked #4 in Alabama for the cheapest car insurance on average.
$1,198
per year
5. Progressive
In 2020 Progressive ranked #5 in Alabama for the cheapest car insurance on average.
$1,912
per year

Estimates give you an idea of which companies to contact for car insurance quotes, but make sure to shop around when you’re looking for Alabama car insurance companies and ask about multi-policy discounts and other discounts for safe driving, long tenure with the company and more.

While one insurance company might provide cheaper rates than its competitor for one group of drivers, for another group, it could be more expensive. That variation is why it’s important to get a personalized quote. Your gender, age, commute distance, credit score, student status, homeownership status and driving record can all affect how much you pay per month in Alabama.

The Best Car Insurance Companies in Alabama for 2020

We created a unique rating system, which is based on a combination of ratings from reputable outlets like J.D. Power and AM Best. Scores are out of 100, with each weighted equally. Customer satisfaction rates are important because you need to be able to reach your insurance company in an emergency and find out about a company’s claims process. You also have to be able to afford it. Gather information from each company so you can make the best decision.

Expand all Rankings +

1

USAAScore: 95
+

4/5

User Satisfaction

5/5

Claims Ratings

4/5

Affordability

A++

Financial Stability

2

ErieScore: 92.5
+

4/5

User Satisfaction

5/5

Claims Ratings

4/5

Affordability

A+

Financial Stability

3

Auto-Owners Insurance CoScore: 90
+

4/5

User Satisfaction

3/5

Claims Ratings

4/5

Affordability

A++

Financial Stability

4

ALFAScore: 87.5
+

4/5

User Satisfaction

4/5

Claims Ratings

4/5

Affordability

A

Financial Stability

5

North Carolina Farm BureauScore: 87.5
+

4/5

User Satisfaction

4/5

Claims Ratings

4/5

Affordability

A

Financial Stability

6

GEICOScore: 85
+

3/5

User Satisfaction

3/5

Claims Ratings

3/5

Affordability

A++

Financial Stability

7

State FarmScore: 82.5
+

4/5

User Satisfaction

3/5

Claims Ratings

3/5

Affordability

A

Financial Stability

8

NationwideScore: 80
+

3/5

User Satisfaction

3/5

Claims Ratings

2/5

Affordability

A+

Financial Stability

9

TravelersScore: 80
+

2/5

User Satisfaction

3/5

Claims Ratings

2/5

Affordability

A++

Financial Stability

10

ProgressiveScore: 77.5
+

2/5

User Satisfaction

2/5

Claims Ratings

3/5

Affordability

A+

Financial Stability


Market Share by Company

State Farm, Alfa and Geico have almost 50% of the state’s market share: 23.73% for State Farm, 14.13% for Alfa and 10.84% from Geico.

Company
Market Share
1. State Farm
23.73%
2. ALFA
14.13%
3. GEICO
10.84%
4. Allstate
10.41%
5. Progressive
7.96%
6. USAA
7.39%
7. National General
2.90%
8. Nationwide
2.40%
9. Liberty Mutual
2.35%
10. Farmers
2.30%

Cheapest Car Insurance for Drivers With a DUI in Alabama

According to the Centers for Disease Control and Prevention, 3,190 people were killed in crashes involving a drunk driver in Alabama from 2003–2012. The percentage of adults who reported driving after drinking too much (in the 30 days prior to being surveyed) was 1.7% in Alabama, according to 2012 CDC data.

The financial repercussions of getting a DUI are costly and can range from court and legal fees to alcohol education treatment programs. Additionally, your insurance rate will also see a spike in cost in addition to the legal fees. Consider the following auto insurance rates for drivers who receive a DUI in Alabama.

Company
Amount
1. State Farm
In 2020 State Farm ranked #1 in Alabama for the cheapest car insurance for dui.
$1,187
per year
2. ALFA
In 2020 ALFA ranked #2 in Alabama for the cheapest car insurance for dui.
$1,350
per year
3. Allstate
In 2020 Allstate ranked #3 in Alabama for the cheapest car insurance for dui.
$1,518
per year
4. GEICO
In 2020 GEICO ranked #4 in Alabama for the cheapest car insurance for dui.
$2,431
per year
5. Progressive
In 2020 Progressive ranked #5 in Alabama for the cheapest car insurance for dui.
$2,544
per year

While each insurance company calculates premiums differently, you can expect to pay an additional $40,000 over the course of 13 years in increased auto insurance premiums. Exactly how much your rate would go up depends on your insurance company, your location and your driving record. With a DUI you’ll likely pay higher rates for up to a decade.

Cheapest Car Insurance for AL Speeding or Distracted Driving Tickets

According to the National Highway Traffic Safety Administration’s (NHTSA) 2018 Fatality Analysis Reporting System (FARS), there were 876 crashes in Alabama because of distracted driving. Driving while distracted can cause accidents. Most states, including Alabama, have laws restricting distracted driving.

Company
Amount
1. ALFA
In 2020 ALFA ranked #1 in Alabama for the cheapest car insurance for distracted drivers.
$1,161
per year
2. Allstate
In 2020 Allstate ranked #2 in Alabama for the cheapest car insurance for distracted drivers.
$1,213
per year
3. State Farm
In 2020 State Farm ranked #3 in Alabama for the cheapest car insurance for distracted drivers.
$1,285
per year
4. GEICO
In 2020 GEICO ranked #4 in Alabama for the cheapest car insurance for distracted drivers.
$1,555
per year
5. Progressive
In 2020 Progressive ranked #5 in Alabama for the cheapest car insurance for distracted drivers.
$2,676
per year

Your auto insurance rate is likely to go up if you get a ticket for speeding or for distracted driving. According to the Insurance Information Association, your driving record is taken into account when you secure your auto policy, so being riskier to insure means paying higher premiums. Your insurer can also re-evaluate your rate if you get a moving violation (i.e., a speeding ticket).

Cheapest Car Insurance Companies in AL for Drivers With Bad Credit

According to Experian, the average FICO Score in the United States hit a record high of 703 in 2019, which is higher than the Alabama average FICO Score of 680. Nationwide Insurance uses credit scores to determine premiums as studies show that using a credit score helps companies better predict insurance losses. If you have subprime credit (credit scores below 670), you’ll likely have to shop around to secure affordable car insurance in Alabama. Consider the following table for an estimate of Alabama auto insurance for people with low credit scores.

Company
Amount
1. ALFA
In 2020 ALFA ranked #1 in Alabama for the cheapest car insurance for poor credit history drivers.
$877
per year
2. GEICO
In 2020 GEICO ranked #2 in Alabama for the cheapest car insurance for poor credit history drivers.
$1,142
per year
3. Allstate
In 2020 Allstate ranked #3 in Alabama for the cheapest car insurance for poor credit history drivers.
$1,164
per year
4. State Farm
In 2020 State Farm ranked #4 in Alabama for the cheapest car insurance for poor credit history drivers.
$1,184
per year
5. Progressive
In 2020 Progressive ranked #5 in Alabama for the cheapest car insurance for poor credit history drivers.
$1,689
per year

To improve your credit score, check out our guide on how to improve your credit score.

Cheapest Car Insurance Companies in Alabama for Seniors

According to 2017 National Highway Traffic Safety Administration data, there were 6,784 people aged 65 and older killed in motor vehicle traffic crashes with older people making up 18% of all traffic fatalities during the year. When shopping for car insurance, seniors in Alabama should ask for discounts for completing driver safety courses, discounts for driving infrequently and discounts for choosing a vehicle that has good safety features. There are other options that seniors can consider when it comes to choosing auto insurance.

The following table is a general guideline of what seniors in Alabama can expect when they go looking for the most affordable car insurance.

Company
Amount
1. ALFA
In 2020 ALFA ranked #1 in Alabama for the cheapest car insurance for seniors.
$786
per year
2. State Farm
In 2020 State Farm ranked #2 in Alabama for the cheapest car insurance for seniors.
$1,188
per year
3. GEICO
In 2020 GEICO ranked #3 in Alabama for the cheapest car insurance for seniors.
$1,267
per year
4. Allstate
In 2020 Allstate ranked #4 in Alabama for the cheapest car insurance for seniors.
$1,338
per year
5. Progressive
In 2020 Progressive ranked #5 in Alabama for the cheapest car insurance for seniors.
$1,447
per year

In Alabama, all drivers are required to renew their driver’s licenses in person and pass a vision test every four years.

Cheapest Car Insurance for Students

Alabama Car Insurance: The Difference a Teen Makes

Average annual price change for an adult with a teen driver on his or her policy in Alabama: $1,304 to $3,504

$1,969 INCREASE

This is a difference of 130%.

It's common for parents to provide car insurance for their teen and college-aged kids. While parents can expect to pay more for insurance premiums for a younger driver, it is often more cost-effective to add your teen or college student to your policy rather than getting them their own policy. There are often discounts, such as those offered for good grades and for taking driving safety classes, that may be applicable, so it’s advisable to shop around to determine the best option.

Adding a teenage driver to a car insurance policy causes premiums to rise because insurers know teens are less experienced, take more risks and are more likely to be involved in fatal crashes, according to the National Highway Traffic Safety Administration.

In Alabama, there were 2,288 motor vehicle traffic fatalities in crashes that involved teen drivers ages 15–18 years old in 2016, according to the Alabama Department of Public Health.

The following table illustrates an estimation of what parents in Alabama can expect to pay for their teen or college-aged student drivers.


Company
Amount
1. GEICO
In 2020 GEICO ranked #1 in Alabama for the cheapest car insurance for students.
$1,874
per year
2. ALFA
In 2020 ALFA ranked #2 in Alabama for the cheapest car insurance for students.
$2,566
per year
3. Allstate
In 2020 Allstate ranked #3 in Alabama for the cheapest car insurance for students.
$2,632
per year
4. Progressive
In 2020 Progressive ranked #4 in Alabama for the cheapest car insurance for students.
$3,188
per year
5. State Farm
In 2020 State Farm ranked #5 in Alabama for the cheapest car insurance for students.
$3,649
per year


Premium Comparison by Student Type

Premium comparison for two adults + A 16 years old

car
Average premium for two 2014

Mustang GTs

$6,164
car
Average premium for two 2008

Town and Country Limiteds

$3,536
Anual benefits of minivans:$2,628 saved

This is 43% less expensive.

Cheaper premium for college vs. high school drivers

Median premium change with a college student vs. high school driver:

$787 DECREASE

This is a savings of 21%.

Potential discounts for teens in texas

Impact on annual premium with good student and defensive driving discounts:

coins
$522 SAVED

Texas students: a long-distance discount

You may pay a smaller annual family premium if your child lives 150 miles or more away from home.

male
Average premium for a 19-year-old male
car

$4,041 at home

graduation

$3,471 at school

$570 IN SAVINGS

female
Average premium for a 19-year-old female
car

$3,606 at home

graduation

$3,158 at school

$448 IN SAVINGS


Insurance Rate Information for Military Drivers and Veterans

Veterans and the more than 11,900 active-duty military personnel living in the state can expect discounts on car insurance exclusively for them, and typically for their spouses as well. Although non-residents are not required to register their vehicles while stationed in Alabama, they must still carry the state's required minimum coverage, so it’s worth it to shop around for a military discount.

Many companies licensed to sell auto insurance in Alabama also offer discounts for buying two or more policies, such as auto and homeowners, so veterans and active members of the military can save even more for bundling policies. One such company is USAA, which offers services exclusively to members of the military, veterans and their family members. Visit the Alabama Department of Insurance for benefits available to military personnel and veterans.

Disabled Alabama veterans who own a vehicle that was financed through the Veterans Administration are exempt from registration and taxes on the vehicle, though insurance is still mandatory. The following table showcases estimates for veterans in Alabama who are looking for auto insurance.

Age savings for Texas service members

male
25 years$1,199
50 years$1,066
female
25 years$1,105
50 years$1,050

$133 Saved
$55 Saved

Median auto insurance for service members: $1,101


Who Needs Car Insurance in Alabama?

Alabama minimum auto insurance requirements dictate that any car that is registered must have liability insurance (or another proof of financial responsibility (see Alternatives to Insurance, below). Some vehicles that are exempt from the law include trailers, government-owned vehicles and vehicles covered under a commercial automobile liability insurance policy.

Proof of Insurance in Alabama

Alabama drivers are required to carry some proof of insurance, usually an insurance card, that must stay in the car at all times.

Cards should have the following information:

  • The car's make, model, year and vehicle identification number
  • The name of the person who is insured
  • The insurance company name and its National Association of Insurance Commissioners code
  • The policy number (except for temporary cards) and the dates for which it is active

Drivers have to show evidence of Alabama auto insurance on at least three occasions:

  • If a law enforcement officer asks to see a license during a traffic stop. Not doing so is a misdemeanor.
  • When they register your vehicle. The state will not renew its registration without proof of liability insurance.
  • If a person is in an accident. You'll need to share your information with the other party.

If you're not carrying your insurance card, the Alabama Administrative Codeallows you to show the same proof digitally.

Minimum Liability Insurance Requirements in Alabama

Alabama requires this level of liability insurance for all drivers:

  • $25,000 for death or bodily injury to one person
  • $50,000 for death or bodily injury to two or more persons
  • $25,000 for damage or destruction of property

Keep in mind that this is the bare minimum coverage required by law, and most drivers will need more insurance to be adequately protected (see below: How Much Vehicle Insurance Do You Need?).

Alternatives to Insurance in Alabama

There are only two legal alternatives to auto insurance in Alabama, and neither one is cheap. The first is a motor vehicle liability bond for at least $50,000, which is filed with the Department of Revenue through a surety company. The second is a cash deposit with the state treasurer for the same amount.

Drivers who opt for the former will receive a motor vehicle liability bond certificate, while those who get the latter will receive a cash bond certificate. Copies of these certificates must be carried in the car, just like proof of insurance.

The advantage of surety bonds is that holders only need to put down a portion of the total, anywhere from 1% to 15%, depending on their credit. The disadvantage is that they are still responsible for paying the full amount if they are at fault in an accident. Drivers holding a cash bond that does not meet the full costs of an accident, meanwhile, have just 30 days to come up with the remainder.

Car Insurance Requirements in Alabama: How Much Coverage Do You Need?

What percentage of drivers in Texas lack vehicle insurance?

18.40%

National average: 13%

Source:

Insurance Information Institute.

While the state has a $25,000/$50,000 policy minimum, industry experts generally recommend getting at least $100,000/$300,000 worth of coverage. In other words, it's wise to stay away from the cheapest car insurance option.

Experts also advise that collision and comprehensive coverage are a good idea for all cars worth more than $1,000. Collision will pay to repair or replace your car if you're in a crash (provided it's worth more than the deductible), and comprehensive insurance will cover non-traffic disasters like fire, robbery, floods and hurricanes.

While the state has a $25,000/$50,000 policy minimum, industry experts generally recommend getting at least $100,000/$300,000 worth of coverage. In other words, it's wise to stay away from the cheapest car insurance option.

Experts also advise that collision and comprehensive coverage are a good idea for all cars worth more than $1,000. Collision will pay to repair or replace your car if you're in a crash (provided it's worth more than the deductible), and comprehensive insurance will cover non-traffic disasters like fire, robbery, floods and hurricanes.

Given Alabama's high rate of uninsured drivers, people should also consider purchasing uninsured motorist coverage, which covers them when the other motorist doesn't have enough insurance to cover the cost of an accident he or she caused (or if they're the victim of a hit-and-run accident).

For more on the subject and the type of discounts you may qualify for, see the MoneyGeek guide to car insurance.


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Sources