Finding cheap car insurance rates in Alabama can be a daunting process, especially if you’re unfamiliar with the laws. Like any other state, Alabama focuses on factors such as driving history, age, vehicle model, and location to calculate and determine your insurance. If you’re looking for cheap car insurance in Alabama, you can start by assessing your needs and determining how these factors will affect your rates.
With this in mind, you can start comparing quotes to get the best deal. Here’s some information about getting cheap car insurance in Alabama, including insurance laws and factors that affect rates.
What is the Average Car Insurance Rate in Alabama?
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The average car insurance rate in Alabama is $1,290 per year. This means that Alabama Insurance rates are slightly higher than most states. The recent pricing trend in Alabama leans towards pricier rates as more insurance companies have increased their premiums.
The high prices are linked to factors like vehicle theft and an increased number of uninsured drivers, which is a common trend in the state. About 20 percent of drivers in Alabama do not have car insurance. Larger cities like Birmingham, Tuscaloosa, and Huntsville are costly to insure vehicles due to the high crime rates and traffic congestion.
Alabama Car Insurance Laws
Alabama car insurance laws state that all drivers must carry property damage liability and bodily injury liability to protect other people financially in case of an accident. Instead of paying out of your pocket, your insurance company can pay for property damage and medical expenses for other motorists. Drivers must have the following minimum requirements to drive on Alabama roads.
- $25,000 per person (bodily injury)
- $50,000 per accident (bodily injury)
- $25,000 per accident (property damage)
While this is the minimum requirement by the law, it is not always enough to cover all costs in most accidents. For this reason, you can check other optional coverages provided by your insurer or increase the liability limits to fit your needs.
Alabama Requires Proof of Insurance
If you’re driving along Alabama public roads, you are required to produce proof of insurance. Failing to produce proof of insurance can result in fines, license revocation, or even a jail term. The state of Alabama also has the power to void your driver’s license if you provide inaccurate information when applying for insurance.
Alabama is an At-Fault State
Alabama uses the fault-based compensation system, meaning that if you cause an accident, you’re responsible for compensating the injured parties. If you suffer injuries in an accident you didn’t cause, you can file with your insurance company, claim with the other driver’s insurance provider, or file a personal injury claim against the other driver.
Factors that Affect Car Insurance Rates in Alabama
The amount of insurance you pay in Alabama depends on various factors, including the coverage you need. For instance, a 40-year-old experienced driver could pay $1,221 per year, while a 16-year-old in the same city could pay over $4,060 per year. Below we will discuss how these factors affect what you pay for your car insurance.
1. Car Insurance Cost in Alabama by Age
The average cost of auto insurance in Alabama can vary based on the driver’s age. Generally, young drivers are assumed to be less experienced and are likely to engage in risky driving. The statewide average car insurance rate for teen drivers is around $4,787 for a female driver and $5,897 for a male driver. Most teen parents combine their insurance policies with their teen drivers to help lower the cost. However, as teenagers grow older, the price decreases gradually as they gain more experience and drive responsibly.
2. Car Insurance Cost in Alabama by Driving History
If you have been issued speeding tickets, DUIs, or other recent citations, you will likely pay more for car insurance in Alabama. Insurance companies believe that a bad driving record means higher chances of getting involved in an accident. Most companies will increase rates for bad driving records by up to 49 percent. For instance, it will cost you $1,121 per year on your car insurance if you have a clean driving record and up to $1,957 for having a bad driving record.
3. Car Insurance Cost in Alabama By Credit Score
People with poor credit scores are likely to pay higher premiums than policyholders with good scores. Insurance providers associate your credit score with your ability to pay premiums on time. To discourage poor credit scores, insurers give out generous discounts of up to 40% to policyholders with high credit scores.
Similarly, you’re eligible for these discounts if you pay your premiums on time every year. For instance, if you pay $1,178 per year and pay your premiums on time, your insurance company may reduce it to about $930 per year, depending on the insurance company you choose. Be sure to check these discounts when applying for car insurance in Alabama.
How to Lower Your Car Insurance Rates in Alabama
You may not control the factors your insurance company will use to calculate your insurance costs, but you can help lower your insurance costs in Alabama by taking specific steps. Below are a few tips you can use to get cheaper insurance.
- Shop around: There will always be cheaper insurance from a provider for the same level of coverage you already have. Compare quotes and choose the policy that best fits your budget.
- Ask about discounts: Discounts can help reduce your insurance costs significantly, especially if your profile qualifies for things like a good driving record, a great credit score, and being a good student.
- Combine policies: Bundle your insurance policies to receive more discounts. You can be sure to get a discount if you buy a home, boat, motorcycle, and auto insurance from the same company.
- Evaluate your coverage: Your insurance needs keep changing as you get older. Always review your insurance policy to assess your needs and update accordingly.
Auto insurance in Alabama is not inexpensive. Researching your options and comparing quotes can help you land valuable deals that fit your budget and insurance needs. Depending on your city in Alabama, you can assess factors that can affect your rates and adjust accordingly. For instance, you can work on your credit score and driving record.
At FIXD, our mission is to make car ownership as simple, easy, and affordable as possible. Our research team utilizes the latest automotive data and insights to create tools and resources that help drivers get peace of mind and save money over the life of their car.