The Best Car Insurance in Alabama of 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 the U.S. Department of Transportation, Alabama had nearly four million licensed drivers in 2018. The Alabama Department of Transportation “ALDOT” reports that a traffic accident occurred every 197 seconds in 2018, 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 by 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.
  • Consider raising deductibles to reduce your premium.
  • When discussing policies with insurance agents, find out what each policy covers and its maximum limits.

The top 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 coverage, prices and service. The survey rates insurance companies using a points system, which focuses on how providers perform in the billing process and policy information, claims handling, customer interaction, policy offerings, pricing and overall customer satisfaction. In J.D. Power’s 2020 U.S. Auto Insurance Study, the top car insurance companies in the southeast region included:

  1. Farm Bureau Insurance of Tennessee
  2. Erie Insurance
  3. Alfa Insurance
  4. Geico
  5. Auto-Owners Insurance

Although USAA earned high marks in the survey, it technically 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.

Rank J.D. Power Rankings AM Best Financial Rating Better Business Bureau Rating
Farm Bureau Insurance – Tennessee #1 891 A+ (Superior) A+
USAA 909 A++ (Superior) A-
Erie Insurance #2 871 A+ (Superior) A+
Alfa Insurance #3 858 A++ (Superior) A+
Geico #4 857 A++ (Superior) A+
Auto-Owners Insurance #5 854 A++ (Superior) A+

Farmers Bureau Insurance – Tennessee

J.D. Power ranks Farmers Bureau as the #1 car insurance Alabama company in the region for customer satisfaction. You’ll find low-cost auto coverage and several discounts, including safe driving, good student and bundling savings. Farmers is also highly rated by the Better Business Bureau for the company’s quick resolution of claims and customer issues.

USAA

USAA technically tops the list in customer satisfaction with 909 points. It doesn’t earn first place because Alabama auto insurance isn’t available to everyone with this carrier. Membership is reserved for active military, veterans, retired military and their families. If you can qualify for membership, you’ll have access to the highest-rated car insurance in Alabama.

Erie

If you plan on sticking with an Alabama car insurance company long term, consider Erie. The insurance company’s Accident Forgiveness Program will forgive the first accident claim you have as long as you’ve been a customer for three years. Erie also offers many discounts, such as the reduced usage and young drivers discounts.

Alfa Insurance

Alfa Insurance is only available in a dozen states, but if you’re lucky enough to have access to coverage, you’ll like their attentive, personalized service. You’ll need to join the Alabama Farmers Federation before you can buy auto insurance. The cost of membership is minimal if you consider the savings you’ll get in car insurance.

Geico

Geico may offer some of the best car insurance rates in Alabama. A list of discounts to choose from will help you save even more money on your car insurance. Some of the best discounts include up to 25% off for an accident-free history and up to 15% savings on new car insurance.

Auto-Owners Insurance

Auto-Owners Insurance makes it easy to bundle your policies in one place by offering a wide variety of insurance coverage options. And with 48,000 licensed agents representing the company, you’re bound to get help with your coverage needs.

Average cost of car insurance in Alabama

Alabama automobile owners pay an average annual car insurance premium of $435 for minimum coverage and $1,513 for full coverage. When compared with national averages, Alabamans pay slightly less than drivers in other states.

State minimum insurance requirements in Alabama

All states require drivers to carry minimum coverage. Alabama’s requirement for auto owners is a minimum amount of liability car insurance. In Alabama, you must purchase:

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

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.

All companies discount policyholders for safe driving, good student discounts and prepaying or setting up automatic payments for your premiums. In addition, 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 Alabama insurance policies.
  • Military installation discounts up to 15% for policyholders who store their vehicles in military base garages.

Frequently asked questions

What is the cheapest car insurance in Alabama?

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.