Just as with any other state, Alabama requires drivers to have car insurance. With almost four million licensed drivers in the state, chances of getting in an accident are high. In fact, according to the Alabama Department of Transportation, residents in this state have a greater than one in three chance of being involved in an injury or fatal crash in their lifetime.
While the vast majority of accidents in the state are caused by driver error, Alabamans also need to watch out for animals, poor road maintenance, and freezing rain or ice. On top of that, the state ranks number six in the country for uninsured drivers. About 18% of drivers in Alabama don’t have insurance, with the national average at 13%.
That’s why it’s essential to get quality auto insurance. When searching for the best companies and plans, we recommend that you compare rates for at least three different companies. Before you start the hunt, here’s some information that you should know.
Table of Contents
Alabama’s Insurance Requirements
Average Cost of Auto Insurance in Alabama
Factors that Affect Insurance Premiums in Alabama
Car Insurance Rates for Different Cities
High-Risk Drivers in Alabama
What Kind of Coverage is Best in Alabama?
How to Find the Best Auto Insurance in Alabama
FAQs about Auto Insurance in Alabama
1 What information will I need to provide for car insurance?
2 What proof of insurance will I need to register my car at the MVD in Alabama?
3 What are the penalties for driving without insurance in Alabama?
4 Is Alabama a No-Fault state for car insurance?
5 Do I need uninsured motorist insurance in Alabama?
Alabama’s Insurance Requirements
Whether you’re new to Alabama or just got your very first car, you’re going to need auto insurance.
The minimum liability insurance that Alabama requires is:
- $25,000 for bodily injury for one person
- $50,000 for bodily injury for two or more persons involved in the accident
- $25,000 for property damage
This is the bare minimum required, but you’ll likely want better coverage than that. We’ll explain why later in this article.
Even if you have a vehicle you’re not using, which is considered “stored or inoperable,” you’ll still need to either have insurance for it or surrender the registration to the state to avoid a fine.
There are two legal alternatives to buying car insurance if you decide you really don’t want it or can’t get it.
The first is to get a $50,000 motor vehicle liability bond from a surety company. This needs to be filed with the Department of Revenue. The second option is to make a cash deposit of the same amount with the state treasurer. You’ll receive a certificate for both options, which you’ll need to carry in your vehicle as proof.
Keep in mind that you’ll still be responsible for paying anything owed above that amount if you cause an accident.
Average Cost of Auto Insurance in Alabama
There are many factors that play into your auto insurance rates, such as age, driving history, credit score, and more.
Alabama is ranked 29 out of 50 for affordable insurance rates in the country. The state has more expensive insurance because its vehicle fatality rates are twice as high as the national average.
Even so, the average cost of car insurance in the state is $697 for minimum coverage and $1,370 for full coverage. That’s lower than the national average of $1,555 for a full coverage policy. When compared to surrounding states, Alabama is right in the middle, costing more than Tennessee but less than Georgia.
Factors that Affect Insurance Premiums in Alabama
Specific factors affect insurance premiums all over the country, including Alabama.
Just like every other state, younger drivers will pay more for insurance. In Alabama, 16-year-olds pay 418% more than 55-year-olds.
Gender is also a consideration in this state, with women paying 3% more than men. If you’re married, expect to pay 4% less than single drivers.
Your driving record plays a pretty significant role in your insurance quote, and unsurprisingly, you’ll pay less if you have a clean record.
You can expect to pay an extra:
- 19% for a speeding ticket
- 19% for a red-light infraction
- 38% for having an open alcoholic container in your car
- 44% for an at-fault accident
- 61% for reckless driving
- 74% for a suspended license
- 76% for a DUI
The amount of mileage you put on your car each year plays a role as well. You’ll pay 5% less driving 7,500 miles a year than you would if you drive 20,000.
Of course, the type of policy and the amount of coverage you choose plays the most prominent role. You’ll pay 205% more for full coverage in Alabama than you would if you chose a minimum coverage policy.
Car Insurance Rates for Different Cities
Insurance rates typically vary from state to state. In Alabama, higher populated areas usually have higher costs compared to rural towns. Dothan has a population of only about 70,000, while Birmingham has about 210,000 residents.
Check out this list of average premiums in Alabama cities:
- Birmingham $1,439
- Decatur $1,234
- Dothan $1,202
- Hoover $1,394
- Huntsville $1,257
- Madison $1,245
- Mobile $1,403
- Montgomery $1,337
- Tuscaloosa $1,300
As you can see, Birmingham pays the most, at almost 11% more than the average. On the other hand, Dothan pays the least, at about 7% less than the statewide average.
High-Risk Drivers in Alabama
If you’re considered a high-risk driver and have been denied auto insurance from private companies due to your driving record, bad credit history, or other factors, you still must obtain insurance. Fortunately, Alabama established the Alabama Automobile Insurance Plan, where you can apply for coverage.
However, this is a last resort, and there are companies in Alabama that will insure high-risk drivers.
What Kind of Coverage is Best in Alabama?
Obviously, going with a minimum coverage plan will cost you less, but it could end up leading to high out-of-pocket costs if you get in a wreck. This is because Alabama is an at-fault state, which means that if you cause an accident, you’re responsible for all the costs. Plus, minimum liability insurance won’t cover damage to your own vehicle if you’re at fault.
Experienced insurance experts recommend that you purchase $100,000 bodily liability insurance per person and $300,000 per accident.
They also recommend considering additional coverages such as collision, comprehensive, medical payments, and uninsured motorist. While these are all optional, they could definitely come in handy.
Collision insurance covers repairs from accidents involving walls, fences, trees, animals, etc. Comprehensive covers things like theft, storm damage, and more. Medical payments will reimburse you for any medical costs incurred by the accident. With 18% of drivers uninsured, getting uninsured motorist coverage will take care of any repairs if you’re involved in an accident with them.
How to Find the Best Auto Insurance in Alabama
When shopping for auto insurance, the first thing you’ll need to do is figure out what kind of policy you need and how much of a deductible you want on your plan.
You can choose a higher deductible to lower your policy costs, but you’ll pay more out of pocket when an accident happens. Alternatively, you can select a lower deductible so you won’t have to pay a lot at once, but your policy costs will be higher. On average, residents in Alabama have a $500 insurance deductible.
It’s now time to start shopping around. When you’re comparing companies, make sure you’re looking at the same amount of coverage and deductible to get an accurate picture of the costs.
Here at QuotePurple, we’ll do the work for you. We’ll show you coverage from the best carriers to help you find the most affordable price.
FAQs about Auto Insurance in Alabama
1. What information will I need to provide for car insurance?
When you’re purchasing auto insurance in Alabama, you’ll need to have certain information and documents on hand. They’ll want to know your age, where you live, and information about your driving record.
You’ll also likely need to provide:
- Driver’s license
- Social Security number
- Your bank information
- Make, Model, Year, and VIN of your car
- Safety and anti-theft features of your car
- Estimate of how many miles you’ll drive annually
Once you’ve signed up, look out for your insurance cards in the mail!
2. What proof of insurance will I need to register my car at the MVD in Alabama?
One of the benefits of living in Alabama is that they allow you to use digital insurance cards. Check with your insurer when you sign up to find out what app or software you need to carry it. You can also keep a paper copy if you prefer.
When you register your car with the MVD, you’ll need to show proof of insurance.
You can use:
- Current insurance card (paper copy or digital)
- A copy of your insurance policy
- A letter from your insurance company that verifies your coverage (This must be on paper with the company letterhead.)
3. What are the penalties for driving without insurance in Alabama?
In Alabama, it’s considered a misdemeanor to drive without insurance. You will be fined up to $500 for your first violation. Repeat offenders can be fined up to $1,000 and have their license suspended for up to six months.
Your vehicle registration will also be suspended, and you’ll have to pay $200 to the MVD to get it reinstated. That fee goes up to $400 for repeat offenders.
4. Is Alabama a No-Fault state for car insurance?
No, Alabama is considered an at-fault (or “tort”) state. This means that the driver that caused the accident is responsible for all damages.
5. Do I need uninsured motorist insurance in Alabama?
As mentioned above, this is an optional add-on you can choose to purchase in Alabama. It is not required, but as the sixth highest state for uninsured drivers, you may want to consider it. Your insurance company is required to offer it when you purchase coverage, and it will help cover the cost of damages or injury sustained in an accident caused by an uninsured driver.
Figuring out your car insurance premium can be difficult and time-consuming. To be sure you get the right rates and the best rates, call QuotePurple at (877) 200-6113 to speak with a car insurance specialist and get a quote today!