How much car insurance costs in Alabama

Alabama's average premium, line by line

The National Association of Insurance Commissioners (NAIC) adds up what insurers collected in each state. Its newest state tables, for 2023, show an average Alabama expenditure of $1,081 per insured car, up 12% from $966 in 2022. That average blends cars insured for liability only with fully covered ones. A car with all three main coverages had a combined premium of $1,269.

Most of Alabama's gap with the nation sits in one line. Liability averaged $576, about 22% under the U.S. figure. Collision ($452) and comprehensive ($241) are almost level with the national averages. So a driver who carries full coverage saves less, relative to the country, than a driver who carries liability only. Your own price still turns on your car, record and address; see how the car you drive changes the premium.

Coverage Alabama requires on every policy

Under Alabama's mandatory liability insurance law, a policy must carry at least $25,000 for injury or death of one person, $50,000 for all injuries in one accident and $25,000 for property damage: 25/50/25. The Alabama Department of Revenue, which runs the state's insurance verification program, cites Section 32-7-6 of the Code of Alabama for these amounts.

• Uninsured motorist coverage must be included in a liability policy unless the named insured rejects it (Ala. Code § 32-7-23). The Insurance Research Council estimated that 16.8% of Alabama drivers were uninsured in 2023, above the 15.4% national figure.
• Collision and comprehensive are not required by state law. A lender or lessor usually requires both on a financed car.

Declining uninsured motorist coverage trims the bill, but with roughly one driver in six uninsured it shifts a real risk onto you. Our guide to limits and deductibles shows how to weigh what each layer costs against what it protects.

Who approves Alabama prices

The Alabama Department of Insurance says all personal lines coverages are prior approved. An insurer has to file a rate change for car insurance and get the department's approval before charging it. Approval doesn't make every company's price the same: each files its own rates based on its own losses and expenses.

Insurers may use credit-based insurance scores, under a department rule on credit information in personal insurance (Ala. Admin. Code ch. 482-1-127). A company that relies on an insurance score must file the scoring model with the Commissioner. If a credit report error is corrected, the insurer must re-rate the policy within 30 days of being notified and refund or credit any overcharge. Read more on how credit-based scores move a premium.

When insurers turn you down

Drivers who can't find coverage in the regular market can apply through the Alabama Automobile Insurance Plan, administered by AIPSO. Its plan page says applicants need a valid Alabama driver's license and a vehicle registered in Alabama, and it points applicants to an agent or broker. Plan coverage tends to cost more than a regular policy, so treat it as a bridge while tickets and claims age off; our guide to assigned-risk plans explains how it works.

Ways to lower an Alabama bill

1. 1 Price the same coverage at several companies. Because each insurer files its own rates, two or three quotes on identical limits and deductibles show how wide the spread is for you.
2. 2 Revisit the deductible. A higher collision and comprehensive deductible lowers the premium; the deductible break-even calculator shows how long the savings take to cover the extra risk.
3. 3 Ask about every discount. Multi-car, bundled policies, safety equipment and a clean record are common; see what bundling home and auto can do.
4. 4 Get help if something looks wrong. The NAIC directory lists the Alabama Department of Insurance Consumer Services Division at (334) 241-4141; in-state callers can also use (800) 433-3966.

Questions drivers ask