Top 10 Alabama Car Insurance Companies
Car insurance is easy to obtain if you are willing to pay the price. That does not mean it is easy to get the best car insurance quotes or good rates. Anyone can go on line and receive a quote in minutes. If your quote comes back high, you may react. You just cannot understand why your rates are so high. Compare car insurance rates by entering your ZIP code into our FREE search!
A quote is based upon dozens of factors. You may not be aware of all of them that affect you when selecting an car insurance company or plan. Were it that simple, everyone would have good rates and the best car insurance.
The following analogy gives you a sense of how illusive and unpredictable average car insurance premiums can be. The comparison is random. Ohio was a “draw a straw choice”.
There are approximately five million people living in Alabama. Alabama ranks 23rd in population and is an agricultural state. It has approximately 124 licensed car insurance companies.
That averages out to approximately 40,000 people per insurance company. Approximately 3.5 million people or 70% of Alabama’s population are licensed drivers and range in age from 16 to 85.
Ohio has a population of more than11.3 million people. Ohio ranks seventh in population and is a highly industrialized state as well as an agricultural state. Ohio has a licensed car insurance company population of approximately 163.
That averages out to approximately 70,000 people per insurance company. Approximately 8.2 million people or 72% of Ohio’s population are licensed drivers and range in age from 16 to 85.
Other Things Matter
From a percentage of driving population perspective, both states come out equally. However, dozens of other unseen factors combine to affect car insurance premiums. These factors can be seemingly innocuous, and sometimes not explainable.
Let us look at some factors that just do not make sense, not because of what they are, but because they can seemingly contradict each other.
Alabama is a very temperate state with a mild climate. The winters are mild, the summers are hot and the precipitation is year round. Alabama is much more prone to turbulent weather patterns in the summer. In that respect, we have an aggravated accident potential occurring during the best season to drive-summer.
Ohio, on the other hand, has much colder winters with substantial snowfall and other road hazard conditions much more pronounced than Alabama. A fender bender is much more likely to occur during the period of six inches of falling snow, than during a period of an equivalent one half inch of falling rain. In this situation, we have an aggravated accident potential occurring at the worst season to drive-winter.
Not only that, the State of Ohio is ranked 34th in size in the nation with 44,825 square miles. With its substantially greater population, it has a relatively heavy population density of 282.3 inhabitants per square mile.
For the most part, the many larger condensed population areas make driving, as a whole, much riskier than Alabama.
Alabama is ranked 30th in size in the nation with an area of 52,419 square miles. The comparatively smaller population spread out over a greater area, gives Alabama a meager population density of 94.4 inhabitants per square mile. The smaller areas of concentrated population make it much less risky to drive in, than Ohio.
With these obvious details in mind, it becomes very difficult to rationalize the following facts. It would seem just the opposite:
- The average premium for an insured in the State of Ohio, May 2011 was $1,090.00 for a 12-month policy.
- The average premium for an insured in the State of Alabama, May 2011 was $1,188.00 for a 12-month policy.
No one can explain the logic of car insurance premiums. One cannot know all the answers. All we can do, as the insured, is make sure we understand the facts as they pertain to us.
Take the time to understand the car insurance rules of your state and what the regulations are. Ask a million questions. Do not be fooled by so called deals. Everything comes at a price. Get the facts about Alabama car insurance company offerings. Do not speculate!
If you are buying car insurance, your state will require that the selling company is licensed. Keep in mind while some companies are licensed to sell, they are not actively pursuing auto insurance market in your state. The quality of their insurance package may vary dramatically from those that are.
Generic Factors That Determine Insurance Rates
We know by now that some factors do not seemingly make sense in determining premiums but, there are many general issues that most insurance companies take into account.
- Zip Code Address – Where you live really does matter. If you live out in the country away from the congested and higher crime rate areas, you will benefit from lower premiums. Live in the big city, and obviously, your rates will be higher.
- Age – Is always a factor. The younger and older will statistically are more prone to accidents. This is a given.
- Driving Experience – The more years behind the wheel without an accident will net you much better premiums. Bouncing from one fender bender to the next does not enamor you to a good rate. Clean driving records do!
- Violations – Repeat offenders such as speeders, DUI mavens, and daredevil drivers, are not well received by Alabama insurance companies. This will cost you money.
- Marital status – Married drivers generally receive better rates because they are considered safer drivers and not as prone to violate the rules.
- Type of Vehicle – The type and make of vehicle that you drive will affect your car insurance quote when you want to add collision coverage and comprehensive car insurance to your basic liability.
Your premium is also based on whether you car is on the “Like to Steal It” list. The top stolen cars for 2009 in Alabama were:
- Chevrolet Pick-Up
- Honda Accord
- Ford F150 Pick-Up
- Chevrolet Caprice
- Chevrolet Impala
- Ford Explorer
- Dodge Ram
- Toyota Camry
- Ford Taurus
- Ford Crown Victoria
Where Your Car Will Get Stolen Also Matters
The figures in brackets indicate that area’s national ranking for cities in Alabama.
- Columbus (15)
- Mobile (33)
- Birmingham/Hoover (60)
- Aniston (85)
- Montgomery (91)
- Huntsville (133)
- Tuscaloosa (160)
- Decatur (208)
- Gadsden (217)
- Dothan (227)
Where you garage your car heavily affects premium determination in Alabama. Only two locations made it into the top 50 nationally. Statistically speaking, Alabama is reasonably safe. This keeps the cost of car insurance in Alabama below the national average.
Required Insurance Coverage in Alabama:
- Bodily Injury Liability: $25,000/$50,000 Limit
- Property Damage Liability: $25,000 Limit
- New limit requirement effective: August 30, 2008
Individuals who drive less than 15,000 miles per year can get special reduced premium pay-as-you-drive insurance from some companies in Alabama. The discount, however, applies after you have renewed your premium for the next year.
Legal Non Insurance Options for driving in Alabama
The following are some car insurance options:
- Post a Motor Vehicle Liability Bond with the Department of Revenue for no less than $50,000.
- Make a cash deposit with the State Treasurer for of a minimum of $50,000.
Here are the minimum car insurance requirements per state. As you can see, they vary significantly.
- Alaska 50/100/25
- Alabama 20/50/25
- Arkansas 25/50/15
- Arizona 15/30/10
- California 15/30/5
- Colorado 25/50/15
- Connecticut 20/40/10
- Delaware 15/30/5
- Florida 10/20/10
- Georgia 15/30/10
- Hawaii 20/40/10
- Idaho 20/50/15
- Illinois 20/40/15
- Indiana 25/50/10
- Iowa 20/40/15
- Kansas 25/50/10
- Kentucky 25/50/10
- Louisiana 10/20/10
- Maine 50/100/25
- Maryland 20/40/10
- Massachusetts 20/40/5
- Michigan 20/40/10
- Minnesota 30/60/10
- Mississippi 25/50/25
- Missouri 25/50/10
- Montana 25/50/10
- Nebraska 25/50/25
- New Hampshire 25/50/25
- New Jersey 15/30/5
- New Mexico 25/50/10
- Nevada 15/30/10
- New York 25/50/10
- North Carolina 30/60/25
- North Dakota 25/50/25
- Ohio 12.5/25/7.5
- Oklahoma 10/20/10
- Oregon 25/50/10
- Pennsylvania 15/30/5
- Rhode Island 25/50/25
- South Carolina 25/50/25
- South Dakota 25/50/25
- Tennessee 25/50/10
- Texas 30/60/25
- Utah 25/65/15
- Virginia 25/50/20
- Vermont 25/50/10
- Washington 25/50/10
- Wisconsin 25/50/10
- West Virginia 20/40/10
- Wyoming 25/50/20
Could this be part of the reason Ohio is Cheaper Than Alabama?
Minimum Required Coverage Is Not A Good Bet
When you look at the three aspects of minimum required coverage for Alabama, these minimums are higher than many states. However, they are still small compared to the amounts involved in the event of a serious car accident.
Many companies’ recommendations for mainstream coverage are in excess of $100,000 or more. Make sure the options you are choosing equate to the cost you are paying when comparing car insurance companies.
Tort systems vary from state to sate, but you need to consider the ramifications of a driver being under/uninsured and what it can do to your ability to become whole after a serious accident.
Just because an individual meets minimum legal insurance requirements for Alabama does not mean that their insurance is going come anywhere close to compensating you for your loss.
Alabama does not require drivers to purchase this coverage. From a personal standpoint, I would not do without Uninsured/Underinsured Motorist Bodily Injury coverage under any circumstances if it were available. It is just too valuable to do without.
Another valuable option from a coverage standpoint is collision coverage in the event that you damage your own car in an accident.
A practical solution is comprehensive car insurance in case your car is stolen, vandalized, or damaged by fire. This applies especially where there is exposure to extreme weather conditions.
Alabama Auto Insurance Laws
Like many other States, you must carry proof of insurance in the form of a Alabama issued insurance card. A premium receipt will do, or you must produce the actual policy when asked by a law enforcement officer.
If you chose to post a Motor Vehicle Liability Bond or made a cash deposit, that evidence will suffice as a substitute for car insurance.
As a fall back, you may show the proof of car insurance purchase for your motor vehicle if purchased within the last 60 days and you have not modified your previous coverage for your new automobile.
If your have ever been arrested – I do not mean convicted – for DUI, you must also produce an SR-22. If you cannot produce these documents on demand, you will have committed a driving violation.
Tips for the Shopper
What is important to you? Do you need lower car insurance premiums, 24 hours service, rental reimbursement, or is your thing online claims management since you are on the go? Whatever it is for you, your age, driving record, and your location all add up to certain costs.
When you file a claim is when you will find out if the reputation of the company is what it is purported to be. No one insurance company holds a monopoly on perfection. You need to find out what is best for you.
Shop around. Do not assume that insurance companies are fixing auto insurance rates in your state. Yes, if you have the same risk profile as someone else, for the exact same coverage, you will receive the same rate. Remember, that is a complex issue and it is always colored by other considerations that you cannot see.
For example, one company might offer accident forgiveness while the other one does not. It is solely dependent on how much risk each company is willing to accept. The thing you can be sure of is that the rate will be different. Shop around if you want to save money. Ultimately, you must define your own needs.
When shopping for insurance take the time to go online and find a good insurance term glossary. Make up a list of your specific needs and be sure that the terms you are using to describe your needs are correct. Always ask consistent questions when looking for the same options.
Nothing used to upset me more than my customers who wanted their gizmo changed out but when I arrived, their gizmo was a thingamabob. Now we were talking a different price altogether. Be an informed shopper. Car insurance can be a reasonably large annual expense.
No. 1 Amica Mutual -
Year Founded – 1907 by a man named A.T. Vigneron in Rhode Island and called Amica. In 1973, Amica joined with Factory Mutual Insurance Company (est. 1921) and became Amica Mutual.
Founding Principals – 1907
- Would look for responsible policyholders.
- Treat them with respect and provide superior customer service.
Positives – They offer top-notch customer service. You never have to deal with an intermediary. You deal directly with the actual insurance representatives. Prices are extremely low compared to most companies. They pay claims quickly. They take all the stress out of dealing with an insurance company.
Negatives – They are choosey on who they will insure. If you have a heavy foot, are an experienced fender bender, or a DUI professional, you will probably exceed their risk threshold. Even though they service all states except Hawaii, there may not be a local office near you.
Special Offerings – Safe Driver discounts, policy bundling discounts, multi-driver discounts, great payment plans.
Kudos – Highest Customer Satisfaction for National Auto Insurers 11 years running – J.D. Powers, highest ratings for overall customer satisfaction, Better Business Bureau Accreditation A++ in trustworthiness and a member since 1957, and (A++) superior rating with A.M. Best.
Conclusion – How can you go wrong?
No. 2 Auto-Owners Insurance -
Year Founded – Auto-Owners started in 1917 in a one-room bank building. It is a Fortune 500 company today with five subsidiaries. It is reputed to be the largest property and casualty insurance company today. The company has always kept its promises and paid its claims, even during the depression years.
Positives – Auto-Owners is not known as a discount insurance company. It has a network of independent agents that go out to the site, issue comparable quotes, and tailor the policy to fit the needs of the client. Their agents represent themselves as the neighbor down the street. They are always immediately available during a problem and have close personal relationships with their clients. They offer 24/7 service coupled with a good product variety.
Negatives – The biggest negative are the complaints by clients that Auto-Owners drags its feet on settling claims. Adjusters seem to take inordinate amounts of time to make their reports causing claims to settle slowly. This almost seems to contradict the persona projected by the agents as a caring neighbor.
Special Offerings – A full service company with five subsidiaries offering home owners, business, annuities, life insurance, disability and long-term care insurance, as well as trucks, commercial autos, motor homes, RV’s and the whole line including classic automobiles, and good old regular car insurance.
Kudos – They put the customer needs first.
Conclusion – Customer satisfaction surveys indicate that they practice what they preach.
No. 3 State Farm –
Year Founded – State Farm originated as a mutual auto insurance company in 1922, and owned by the policyholders. Headquartered in Bloomington, Illinois, State Farm, and its eight-company member group make up the largest provider of homeowner’s, auto, renters, and condominium insurance. Continuous operation in the United States for close to 90 years would indicate that this company has been successful.
Positives – From the business standpoint there are many top-notch ratings. Best Insurance Reports – A++, Standard & Poor’s AA, Moody’s Aa1, Fitch at AA+.
Negatives – Customer ratings do not echo the positive business ratings.
- Extremely Satisfied – 23%
- Very Satisfied – 16%
- Somewhat Satisfied – 13%
- Unsatisfied – 13%
- Very Unsatisfied – 35%
- Would Not Recommend – 14%
NOTE -In 2003 Warren, Ohio experienced a Century Event of water damage with dozens of homes having their basements destroyed as a result of defective city sewer and drain lines.
Since the city had neglected maintenance of the lines, the claims did not fall under the purview of flooding and damage resulted from sewer water backup. That included this writer’s basement. Dozens of homeowners had State Farm coverage.
Most homeowners had not filed claims in over 30 years. The homeowners’ claims were reluctantly paid and their insurance promptly cancelled after one claim in 30 years. Fortunately, this writer had another insurance company.
Special Offerings – Cannot say they offer anything unique. Better to say that they offer just about everything.
Kudos – ?
Conclusion – This company reflects the paradox of opinions that can occur depending on which side of the coin you flip and where you are at the time. I would be prone to asking questions in the neighborhood.
4. GEICO –
Year Founded – Leo and Lillian Goodwin founded Government Employees Insurance Company (GEICO) in 1936 to target military officers and government employees. They grew quickly and by the end of the first year, they had 12 employees. In 1980, the company went 24/7 with claims, sales, and customer service. Today GEICO has over nine million policyholders and one GECKO!
Positives – If you have five years with the company and a clean driving record, you can qualify for accident forgiveness, which means they will not raise your economical rates, if you have an accident. Their prices are already very competitive. They rate very high with A.M. Best and have an A rating with the Better Business Bureau.
Negatives – For some reason, GEICO does not always renew drivers, after initial coverage, even when they have clean driving records. Many insured clean drivers complained that for no reason, their renewal rate quotes jumped.
Special Offerings – Hefty discounts on already competitive rates as well as 24/7 customer service both by phone and online for students, military, seniors, and federal employees. Rental cars are available for accident recovery time.
Kudos – They cover all 50 states. They have excellent complete claim resolution and tracking online.
Conclusion – Overall, GEICO has a positive review trend from independent reviewers, even over some of their competitors., For a company that fits so many niches, GEICO is well received. No company can be everything to everyone.
5. Liberty Mutual –
Year Founded – To satisfy state law requiring workers compensation insurance in 1912, Liberty Mutual was founded. By 1914, the then called, Massachusetts Employees’ Insurance Association wrote is first auto policy. In 1917, the changed names to Liberty Mutual Insurance Company. In 1960, Liberty Mutual offered its first life insurance coverage. In 2008, it acquired Safeco and has become one of the leading insurance companies in the nation.
Positives – Exceptional customer service is one of the hallmarks of this company. Customer Service reps routinely keep in contact and update customers on their policies and to gauge customer satisfaction. Since their rates are typically more affordable than many leading insurance companies, they still offer great payment schedules. Liberty Mutual has a good reputation for quick claim settlement.
Negatives – On the other side of the coin, some reviews state that Liberty Mutual offers low-ball settlement rates and lower quality repair services, which can involve a lawyer to get a fair settlement. They sometimes raise premiums after an accident, even though the driver was not at fault. They are premium intense on younger less experienced drivers. They are sometimes difficult to reach when needed.
Special Offerings – One of Liberty Mutual specialties has been Family and Medical Leave Act Administration Services and services for disabled customers.
Kudos – They have reasonably good customer support and affordable Cost.
Conclusion – Once again, it depends on to whom you talk. Some customers become aggravated and frustrated with their claims adjustors when it comes to low-ball claims. This can be time consuming and costly, even if you win the argument. This is another “check it out first” company, even with one hundred years of experience.
6. State Auto –
Year Founded – In 1921, a frustrated Robert Pein founded State Automobile Mutual Insurance. He was tired of high insurance quotes and poor claims settlements. Rather than lining pockets of insurance execs, he wanted procedures in place to serve the policyholders. State Auto strongly advocates the independent agent approach to policy service.
Positives – One of the key ingredients of State Auto’s success is the ability of the independent agent to be directly involved in the claims decision process. This allows the independent agent to tailor the premiums and quotes more closely to the real world at hand.
Negatives – The same autonomous thinking of the independent agent can come back to slap the policyholder in the face when the local office has a lax or cavalier attitude in getting the job done. This tendency is somewhat recognized at the corporate level where strict guidelines have been instituted to maintain quality service.
Special Offerings – Great car insurance discounts when bundled with other forms of insurance.
Kudos – They seem to take complaints seriously.
Conclusion – Independent insurance assessors have rated the company B+ while BBB rates the company A+. That is somewhat of a dichotomy, probably driven by the more independent agency environment espoused in corporate philosophy.
7. Progressive –
Year Founded – Two law school students, Joseph Lewis and Jack Green founded Progressive Mutual Insurance Company on March 10, 1937. Since only wealthy individuals could afford insurance, they wanted to service the average driver that could not afford it. They started the company with a meager $10,000 and almost went out of business.
Progressive was the first auto insurance company to offer drive in claims service. The also lead the market with installment payments. Currently they have over $14 billion dollars of insurance in effect.
Positives – Their rates are lower than many other insurance companies. They do bundle insurance, which can save you more.
Negatives – Not the greatest of claims services. Sounds great on TV but you have to hound them to death to get a claim settled. They have approximately a 19% negative review score.
Special Offerings – Custom policies and Concierge claim services.
Kudos – ?
Conclusion – I would not jump through hoops to get a policy with this company. A 19% negative review rate is nothing to get excited about.
8. American Family –
Year Founded – American Family Insurance is a Fortune 500 company founded in 1923 with three employees and 346 charter member policyholders. It is currently the third largest mutual property and casualty insurance company in the country, having approximately 4,000 agents. Its track record lies with car insurance which has been their growth drive over the past 83 years.
Positives – When you buy insurance with American Family, you are actually buying equity in the Company. That is a strong incentive to treat you right as a policyholder. It also allows profits to be reinvested into the company, which helps hedge against unforeseen losses. American Family utilizes a comparative rate system to ensure a competitive quote. Customers rave about their exceptional personalized service.
Negatives – They are openly biased against individuals with lesser credit scores. They require that you submit credit score information, prior to underwriting any insurance policy. If you do not meet their credit score criteria, they simply will not underwrite you. They are also more regional in coverage.
Special Offerings – Adult policy holders, with teen drivers, are offered a specialty service called “In-car DriveCam”. It is used to reinforce good driving habits such as seatbelt usage and decrease risky driving habits. It has been successful in reducing bad habits in a matter of weeks and increasing seatbelt use to 100%. This service is free, for the first year.
Kudos – “In-Car DriveCam”
Conclusion – Even though S&P rates American Family with an AA- and A.M. Best gives them an A+, even though it would not affect me, I would have problems with their credit scoring criteria.
9. Allstate –
Year Founded – In 1931 General Wood, the CEO of Sears and Roebuck noticed the high interest that the public was taking in their automobiles. He thought there was too much red tape involved in providing car insurance coverage. He started a completely innovative method of insurance sales through “mail order”.
By 1944, Allstate was carrying $45 million in auto policies. Since then Allstate has written billions in insurance and had over 11 million policy holders as early as the mid to late sixties.
Positives – Loyalty supposedly counts with Allstate. Bundling policies will reap you lower prices. Good driving records and no accidents will also reap you rewards. The company has a good customer service reputation.
Negatives – There seems to be some bias toward the female driver. Even a minor accident report with no damage to the auto of the insured will net at large increase in premium in excess of $200 dollars if a female. By survey, customer service is at best average and trending toward poor.
Special Offerings – Discounts for good driving and no accident records.
Kudos – Simple claims processing and perks for loyal customers with no accident records.
Conclusion – A 22% negative customer service rating is very high. It may be partially attributed to a high female complaint population, based on discrimination.
10. Nationwide –
Year Founded – Nationwide was Originally designed to benefit the Ohio farmer. It was originally the Farm Bureau Mutual Automobile Insurance Company in 1926. It was formed to provide exclusive auto coverage for farmers. In 1955 it officially became Nationwide Insurance.
Nationwide went public in 1997 from a mutual fund company. It offers complete coverage for home, life, and vehicle.
Positives – Not only does Nationwide cover all aspects of property and casualty, it also include comprehensive coverage including farm, commercial, pet, identity, life, and others. Nationwide even offers Blue Ribbon services that cover all repairs with pre-qualified auto shops and other entities. You can mange this online with constant updates readily available.
Negatives – The main complaint of policyholders is, not receiving prior notifications about rate increases. People have budgets and need to plan.
Special Offerings – A ton of special offerings exist including loans for college, short-term event insurance, and many other specialties too numerous to mention.
Kudos – You name it, they probably have at least one policy that you cannot find somewhere else.
Conclusion – Before you deal with this company, you should take the time to define your needs. Otherwise, you might miss something they have to offer. They are everywhere and have excellent service coverage whether by phone, fax, or online.
As a consumer and shopper, you need to be mindful of today’s cost of doing business. Insurance is expensive. What may seem right for you is wrong and more expensive for someone else. Compare car insurance by entering your ZIP code!