The Best Alabama Car Insurance Companies 2020

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The highways and byways of Alabama lead to amazing adventures, from Huntsville’s U.S. Space and Rocket Center to the emerald green waters of Gulf Shores. But before you set out on the open road, you need to protect yourself and your vehicle with Alabama auto insurance.

Based on 2017 Alabama Department of Transportation records, Alabama has around 5.6 million registered vehicles. In 2017, nearly 157,000 automobile accidents occurred on Alabama roads and highways, resulting in more than 47,770 injuries and 948 fatalities. Compared with 2016 statistics, traffic accidents increased by 0.70% in 2017, but fatalities decreased by nearly 13%. The ALDOT estimates that Alabamans have a greater than one in three chance of having an injurious or fatal accident in their lifetimes, so it makes sense to protect yourself with automobile insurance.

When you are ready to shop for an Alabama insurance company, follow the advice of the Insurance Information Institute and National Association of Insurance Commissioners:

  • Research insurance rates for the make and model of vehicle you want to buy before you make a purchase.
  • Contact as many insurance companies as possible to compare rates.
  • Inquire about discounts that can lower your premium.
  • Contact your homeowners or renters insurance provider to find out if you can save money buy bundling existing coverages with a car policy.
  • Ask insurance agents if your credit rating will affect your insurance rate.
  • If you own an older vehicle, consider discontinuing high-cost coverages such as comprehensive and collision policies.
  • Consider raising deductibles to reduce your premium.
  • When discussing policies with insurance agents, find out what each policy covers and its maximum limits.
  • Before signing an insurance contract, search the National Association of Insurance Commissioners database to make sure the company holds a current Alabama license.

Best car insurance companies in Alabama

Marketing research company J.D. Power conducts an annual study of car insurance companies to determine which ones offer the best coverages, prices and service. The survey rates insurance companies using a five-star system, which focuses on how providers perform in billing process and policy information, claims handling, customer interaction, policy offerings, pricing and overall customer satisfaction. In J.D. Power’s 2019 U.S. Auto Insurance Study, the top car insurance companies in the southeast region included:

  1. Farm Bureau Insurance of Tennessee
  2. USAA
  3. Erie Insurance
  4. Alfa Insurance
  5. North Carolina Farm Bureau Insurance
  6. State Farm

Although USAA earned high marks in the survey, it does not qualify for J.D. Power’s ranking, because it only provides insurance products for military members and their families. Nonetheless, for those who qualify, USAA offers a great option for Alabama auto insurance.

Overall Satisfaction Policy Offerings Price Billing Process/Policy Information Customer Interaction Claims Handling
Farm Bureau of TN 5 stars 5 stars 5 stars 5 stars 5 stars 5 stars
USAA 4 stars 5 stars 4 stars 5 stars 4 stars 5 stars
Erie Insurance 4 stars 4 stars 4 stars 4 stars 5 stars 5 stars
Alfa Insurance 4 stars 3 stars 4 stars 4 stars 4 stars 4 stars
NC Farm Bureau 4 stars 3 stars 4 stars 3 stars 4 stars 4 stars
State Farm 4 stars 4 stars 3 stars 4 stars 4 stars 3 stars

** Note that Farm Bureau of Tennessee and NC Farm Bureau are not available in Alabama.

When researching insurance companies in Alabama, it is important to find a provider with a sound financial foundation. The financial strength of a company determines its ability to meet its claims obligations. A.M. Best Rating Services researches the financial strength of insurance companies and rates J.D. Power’s top southeast region picks:

Consumers turn to the Better Business Bureau when they need help resolving a dispute with a business. The BBB rates companies based on numerous criteria, including business size, the volume of complaints it receives and the effort and quality of dispute resolution. The BBB rates J.D. Power’s picks:

Finding the right cheap car insurance in Alabama for you

The car insurance industry does not offer one-size-fits all policy pricing. Numerous factors can affect your rate, including your age, credit history and driving record. The Zebra, a private research company that studies the insurance industry, publishes reports that can help guide you to finding the best policy. In a 2019 study, The Zebra found that a few Alabama insurance companies offered the most affordable average annual rates, including:

  • Travelers Car Insurance – $799
  • Cincinnati Insurance – $820
  • USAA – $913
  • Geico – $1,040
  • Country Car Insurance – $1,183
  • Auto-Owners Car Insurance – $1,194

Typically, teenage drivers must pay much higher car insurance rates than adults do. Parents who add teen drivers to their insurance policies can expect their premiums to at least double. In a nationwide study of car insurance rates, The Zebra found that parents with teen drivers added to their policies can expect to pay at least $1,135 for six months of coverage:

Company 6-month Premium Without Teenager Teen Driver Added to Policy
Nationwide $600 $1,135
Geico $650 $1,284
Progressive $670 $1,277
State Farm $676 $1,133
Allstate $691 $1,395

Most insurance companies use policyholders’ credit scores as a factor in determining premium rates. According to The Zebra, if your credit score drops just one tier, you could face an increase of more than $340 to your annual car insurance premium. But not all companies place the same weight on credit ratings.

Company Avg. 6-month Premium With Poor Credit Avg. 6-month Premium With Excellent Credit
Farmers $681 $633
Nationwide $804 $565
Progressive $872 $648
Geico $907 $623
State Farm $969 $646

Even one traffic infraction can prompt your car insurance company to increase your premium. If you receive a traffic conviction for an at-fault accident, driving under the influence or speeding, you can expect a rate increase. But based on The Zebra’s current national research, the percentage of increase can vary widely by company.

Company Avg. 6-month Premium With No DUI Avg. Premium With DUI
Nationwide $660 $1,340
Farmers $717 $1,316
Progressive $746 $1,450
State Farm $757 $1,239
Company Avg. 6-month Premium With No Reckless Driving Charge Avg. 6-month Premium With Reckless Driving Charge
Nationwide $660 $1,111
Farmers $717 $1,129
Progressive $746 $1,415
State Farm $757 $1,227

Average cost of car insurance in Alabama

Based on a June 2019 The Zebra survey, Alabama automobile owners pay an average annual car insurance premium of $1,358. When compared with national averages, Alabamans pay slightly less than drivers in other states.

Liability Only With Comprehensive – $1,000 Deductible With Comprehensive – $500 Deductible
Alabama $611 $1,219 $1,360
National Average $658 $1,241 $1,398

Maintaining a clean driving record can save you money on your Alabama car insurance.

Alabama Drivers With… Save an Average of $ Save an Average of %
No Traffic Tickets $274 16.92%
No Accidents $611 31.20%
Good Credit $1,591 54.16%

With Nationwide teenagers pay an average 6-month car insurance premium of $1,838 when added to their parents’ policy, while female teens pay $1,949. Compared to the national average, Alabama teens pay exorbitantly higher rates.

AL Teen Age Annual Rate on Parents’ Policy Annual Rate Standalone Policy
16 $5,710 $7,768
17 $5,463 $6,538
18 $5,228 $5,584
19 $4,753 $3,541

Alabamans with poor credit histories and traffic violations can pay insurance rates over 50% higher than the state average.

Average Annual Premium
State Average $1,358
At-Fault Accident $1,957
DUI $2,230
Speeding Violation $1,621
Poor Credit Score $2,938

Location is a key factor in determining your insurance rate. Car owners who live in cities and towns with high accident and auto theft rates typically pay the highest premiums, regardless of the community’s size.

City/Town Average Annual Premium
Birmingham $1,451
Cloverdale $1,222
Fairfield $1,579
Fort Rucker $1,210
Huntsville $1,251
Mulga $1,569
Mobile $1,338
Montgomery $1,426
Pleasant Grove $1,533

Car insurance discounts in Alabama

Inquiring about discounts can save you big bucks on Alabama insurance. Most insurance companies in Alabama offer a variety of ways to reduce your premium, including programs which reward you for education, loyalty and safe driving. State Farm rewards Alabamans with numerous education-related discounts, including:

  • Defensive driving course discounts up to 5% for drivers 55 years of age or older who complete a Motor Vehicle Accident Prevention Course.
  • Good student discounts for students under 25 years of age who maintain at least a B average or make the dean’s list.

Alfa Insurance policyholders enjoy numerous policy-related discounts, including:

  • Multi-car discounts for policyholders who insure two or more passenger cars with Alfa.
  • Life insurance discounts for auto policyholders who purchase Alfa life insurance coverage.
  • Combo discounts for auto policyholders who also have an Alfa homeowners policy.

USAA offers loyalty rewards and discounts geared to military life such as:

  • Family discounts up to 10% for the kids of military members who continue their USAA auto insurance into adulthood.
  • Longevity discounts for members who continuously renew their USAA car insurance policies.
  • Military installation discounts up to 15% for policyholders who store their vehicles in military base garages.

State minimum insurance requirements in Alabama

Alabama requires auto owners to carry minimum amounts of liability car insurance. According to the Alabama Department of Insurance, you must purchase:

  • At least $25,000 bodily injury insurance to cover the medical or death expenses of one person in a single accident.
  • A minimum of $50,000 bodily injury coverage to pay the medical or death expenses of more than one person in a single traffic accident.
  • At least $25,000 property damage insurance to pay for damage caused in a single collision.

Frequently asked questions

What is the cheapest car insurance in Alabama?

According to market research company The Zebra, Travelers Car Insurance offers the lowest average annual car insurance premiums in Alabama. However, factors such as your age, credit history and vehicle make and model play a role in how insurance companies determine your rate. For the best rate possible, you must shop around.

What information is needed in order to get car insurance in Alabama?

When you contact Alabama insurance companies, agents will need to know the type of car you want to insure, your age, where you live, your annual mileage and information about your driving record.

Does Alabama require car owners to purchase no-fault insurance?

Alabama requires minimum amounts of liability insurance but does not require car owners to purchase no-fault insurance.

Can I save money by adding my teenager to my insurance policy, rather than purchasing separate coverage?

Alabama teenagers pay exorbitantly high car insurance rates. Oftentimes, you can save your teenager thousands of dollars per year by adding them to your existing automobile policy.