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How Much Does Car Insurance Cost in Alabama? (2022 Update)

car insurance concept

One of the most important aspects of being a car owner is having car insurance. Car insurance protects your assets and the assets of others in the event of an accident. And in Alabama, driving without car insurance is a misdemeanor that carries with it a fine, suspension of your license, and possibly even jail time.

Since car insurance is so important, you may be wondering how much it costs if you live in Alabama? Car insurance rates in Alabama are comparable to the national average. For full coverage, it costs around $1760 annually, or around $433 annually for liability coverage. Continue reading to learn more the cost of car insurance in Alabama.

car and road divider

The Importance of Car Insurance

Car insurance is important for your financial protection. Even though car insurance costs money, it can actually end up saving you money in the event that you get into a car accident. If the accident is your fault, then you’re responsible for paying for damages to the other person and their car, as well as replacing your car.

Costs from car accidents can end up in the thousands of dollars. Replacing cars isn’t cheap, but you may also be faced with covering medical bills and loss of income if someone in the car accident gets hurt. That can be a huge financial burden for anyone. By paying a small amount into car insurance each month instead, you can be protected from incurring these costs. Your car insurance provider will pay for the costs instead, and you’ll avoid any potential legal action which could end up costing you even more.

But car insurance doesn’t just benefit you in the event of a car accident. Car insurance can also help if your car is  stolen, or damaged as a result of a storm or natural disaster. And depending on what type of coverage you have, car insurance can also help if something falls on your car, such as a tree limb, for example. The bottom line is that any unexpected accidents that may come up involving your car, having car insurance can lift some of the financial burden off of you.

car crash accident on the road
Image Credit: Kwangmoozaa, Shutterstock

How Much Does Car Insurance Cost?

Car insurance in Alabama costs about the same as the national average. However, not all insurance companies charge the same amount for premiums. There are several factors that affect how much you pay for car insurance. We’ll cover a few of the most common factors that affect insurance rates, but just know that there are others that aren’t mentioned.

Age

Age is a big factor when it comes to how much car insurance costs. For example, younger drivers under age 25 can expect to pay more for car insurance than those older than 25. This is because these drivers don’t have as much experience, especially teenagers around age 16-18 that are new to driving.

After age 25, the cost of car insurance can drop rather significantly since there isn’t as much of a risk of accident. The rates continue to drop until you reach around 60 years of age, and then they may start to rise again as you age.

Driving History

Your driving history will also affect your car insurance rate. If you’ve gotten tickets or been in one or multiple accidents, then your monthly premiums may be higher than someone that has a clean driving record. If you have a driving-related misdemeanor on your record, such as a DUI, then your insurance rate may be higher as well. If you want to keep your insurance rates down, it’s very important to follow all traffic laws and avoid at-fault accidents to the best of your ability.

man driving car
Image Credit: EZ-Stock Studio, shutterstock

Type and Age of Car

The type of car you drive, as well as the age of your car, can also affect your insurance rate. Newer cars cost more to insure since they are valued at a higher rate, are more prone to theft, and may cost more to repair. Older cars have lower values, aren’t as likely to get stolen, and have less expensive repair costs so you won’t pay as much for insurance.

Certain types of cars, such as sports cars and foreign-made cars, also tend to cost more to insure. This is again due to these cars having a higher value and costing more to repair. If the vehicle gets involved in an accident, it also costs more to replace them if they are totaled.

Type of Coverage

Another major contributing factor to the cost of car insurance is the type of coverage that you want. There are generally two main types of car insurance coverage: liability, and full-coverage. Liability coverage costs less than comprehensive coverage and is required by law in most states, including Alabama.

Liability coverage covers only the other person in the event of an accident, including legal and medical fees, provided that the accident is your fault. But it usually doesn’t cover damages to your car. Liability coverage only is typically okay for older cars, but newer cars may not qualify for liability-only coverage.

If you have a newer car or just want the most amount of protection, it’s best to go with a full-coverage car insurance policy. Full-coverage policies often include collision coverage and comprehensive coverage. Collision coverage covers your car in the event of a collision with another car, while comprehensive coverage covers damage to your car not related to car crashes. Full-coverage car insurance is the most expensive, but it also offers you the most amount of protection.

woman signing insurance documents
Image Credit: Opat Suvi, Shutterstock

Deductible Amount

It’s also important to note that you can tailor your coverage to your needs, or how much you want the insurance company to pay out in the event of an accident vs. how much you’ll pay out of pocket. How much you pay out of pocket is known as your deductible.

For example, you may choose a plan with a $250, $500, or $1,000 deductible. The higher deductible you agree to pay means that your monthly insurance premium will be lower since insurance won’t have to pay as much. If you choose to pay a lower deductible, then you’ll pay more for insurance each month. It’s important to choose your deductible carefully, as that’s how much you’ll have to pay for repairs to your car before insurance will cover the rest.

Cost of Car Insurance in Alabama

Below are some of the estimated prices for the average driver in Alabama from four of the top car insurance providers in the state. Note that these prices will vary based on the factors mentioned above as well as other factors including your location, credit score, and any individual company discounts that you may qualify for.

car insurance
Image Credit: Rawpixel.com, Shutterstock
Insurance Provider Monthly/Yearly Prices for Liability Coverage Monthly/Yearly Prices for Full-Coverage
Geico $31/$375 $69/$827
Allstate $42/$498 $71/$846
State Farm $50/$604 $103/$1,235
Progressive $52/$627 $107/$1,288

Source: moneygeek.com

Additional Costs to Anticipate

It’s important to know that your insurance rate can and probably will change. The rate that you’re given when you sign up for a policy won’t be your rate forever. If you get into an accident, have a traffic violation, or get arrested for a driving-related offense, you’ll likely see an increase in your insurance rate. If you add a new car or a new driver to your insurance policy, your rate will likely increase as well.

But, your rate can also decrease due to things such as going so long without an accident, turning 25, etc. Insurance rates are always changing, but as long as you maintain a good driving history and don’t make any changes to your policy, your rate shouldn’t change too much.

Also note that just like you can choose your deductible amount, you can also choose exactly how much your policy will cover. For example, some policies cover up to $25,000 in damages, some may cover $50,000, etc. But once the amount that is covered is paid for, you’ll be responsible for paying the rest. It’s important to choose your plan carefully, even if it means paying a slightly higher premium in order to get more coverage.

car accident claim
Image credit: Pair Srinrat, Shutterstock

How Do I Compare Car Insurance Plans?

The best way to compare car insurance plans is to get quotes from several different insurance providers. Most providers allow you to do this on the company website. You’ll just answer some questions about yourself and your driving history and you’ll receive a quote based on your answers.

However, it’s important to remember that a quote is just that. Once you’ve received your quotes, you’ll probably need to talk to an agent regarding different coverage and deductible amounts so that you can find one that suits your needs. That will likely cause your quote to change. You can compare plans from different providers to see which one best fits your budget and your needs before committing to anything.

How Can I Save Money on Car Insurance?

There are several ways that you can save money on car insurance. The first is being a good driver and having a clean driving history. But, some companies offer discounts for those working in certain professions, military and veterans, homeowners, those with good credit, and more.

You can also usually save money if you bundle your car insurance with your homeowner’s insurance. That means getting your home and car insurance from the same company, which often results in higher discounts and savings. There are other types of insurance you can bundle, too, so make sure you ask about bundling as well as any discounts the company offers when getting your quotes and going over plans.

car insurance on the phone
Image Credit: New Africa, Shutterstock

car and road divider

Conclusion

For the most part, car insurance in Alabama comes close to the national average. But, there are some companies that charge more and some that charge less. Factors such as your age, the type of car you drive, your driving history, and the type of coverage you want can all affect your insurance rate. For the most savings, make sure to shop around, compare plans carefully, and ask about any discounts a particular provider may offer.


Featured Image Credit: Rawpixel.com, Shutterstock

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