Updated on 06.20.16

Car Insurance in Alaska

Kevin Oliver

I found $460 in savings in 20 minutes.

Alaska is a bucket list destination and home to some of the most breathtaking drives on the planet. But can Alaskans reasonably insure themselves without breaking the bank and paying the statewide average of $1,584? I found that with some smart shopping, you absolutely can.

I ventured out to find the best basic coverage in state, while aiming to save some pocket change, or around $460 as it turns out.  Although quotes will vary greatly depending on an untold amount of factors, I found quite a range amongst the competition. The most affordable was Liberty Mutual with a $1,320 offer, while the priciest was Allstate, quoting me for $1,788

It’s important to keep in mind that every Alaskan is different, and will find themselves offered a unique quote based on a litany of variables, including age, zip code, and credit score. Basically, the only surefire way to compare rates accurately is to personally check quotes from the competition yourself.

In my research, I was able to garner all five quotes using some pretty handy online tools. On average they took around 5 minutes to complete, a welcome sacrifice when potentially talking about hundreds, if not thousands of dollars. If you do have to make a call to get a quote, you may have to set aside 15 or 20 minutes to get all the essential information, but at least you may get treated to some quality “please hold, your call is very important to us” music.

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Our Top 5 Picks for the Best Car Insurance in Alaska

I set out to find the best car insurance policy out there, and I started by investigated companies that I know I could trust support me during an accident and actually afford to pay my claim.

Insurer My quote
Liberty Mutual $1,320
Geico $1,356
State Farm $1,422
Country Financial $1,598
Allstate $1,788

In my experience, attention to customer satisfaction is irreplaceable. If you do happen to do what I did and total your car on an open highway, you surely don’t want to be dealing with obstinate insurance company on the other side. That’s why I chose the companies you see in the table below. Each of them have a “better than most” (or higher) rating from JD Power, a company conducts incredibly thorough customer service satisfaction surveys, and a favorable rating from A.M. Best, a company that evaluates insurance companies’ financial stability.

Although it wasn’t drastically below the state’s average, Liberty Mutual’s $1,320 quote was a reasonable price to pay for the coverage. Generally, my recommendation is to stick with a most affordable, yet reliable company and invest your saved money into better coverage. After all, you (hopefully) won’t be dealing with your insurance company on a regular basis.

Even If You’re Happy, It’s Best to Shop for a New Policy Every Couple of Years

Unfortunately, your level of risk isn’t the only thing determining how much you pay in premiums. Through a practice called price optimization, insurance companies can weigh how much money you’re comfortably spending in other areas of your life to calculate how much your premiums should cost.

This controversial practice, dubbed “profit maximization” by Bob Hunter, the director of insurance for the Consumer Federation of America, is used by a shocking number of insurance companies. According to a study by Earnix, 45 percent of large insurance companies analyze a range of your personal data (like credit scores, web shopping habits, and social media) with a specific algorithm that decides just how likely you are to look for better deals.

In short, the best way to counteract price optimization is to price out competitive options frequently. If your insurance company is practicing price optimization, they will undoubtedly take note of you looking for better deals, making it a simple and affordable way to keep your insurer on their toes.

Fortunately for Alaskans, The Last Frontier recently became the 17 jurisdiction to outright ban the practice of price optimization. The decision by Alaska Insurance Director Lori Wing-Heier has been praised as a huge step from climbing excessive rates and targeted premiums.

Alaska’s Minimum Coverage

The Bare Minimum

Like most states in the Union, Alaska required a level of liability insurance in case you are involved in an accident. Here’s what Alaska’s Department of Commerce’s auto insurance guide had to say on its required coverage:

“Liability coverage, the only coverage you are required to carry under Alaska law, provides you with protection from claims by others for damages that might arise out of an accident for which you are found to be legally responsible. This coverage is divided into Bodily Injury Liability and Property Damage Liability.”

The quotes I got were for the most basic level of liability coverage required in the purchase of insurance in Alaska; $50,000 for bodily injury per person, $100,000 for total bodily injury for all involved, and $25,000 for property damage, or a 50/100/25 plan.

If You Skip Coverage, It’ll Cost You

According to Alaska’s Department of Commerce’s auto insurance guide, failing to purchase insurance can land you with some pretty stiff fines. Here’s what the Alaskan auto insurance guide has to say about its required insurance:

“The owner or operator of a vehicle registered for use on the road must carry at least the legally required minimum amount of liability insurance.”

If you are caught driving without the state required insurance, you will face a driver’s license suspension.

Failure to prove your insurance can be as problematic as not having insurance at all. According to the guide, you must have a copy of your policy, proof of self-insurance, or your insurance identification card in your immediate possession to avoid some pretty stiff penalties:

“Failure to have insurance can result in the suspension of your driver’s license. Before your license can be reinstated, proof of financial responsibility must be supplied and reinstatement fees paid. An SR 22 filing, which provides proof of financial responsibility, may be obtained from your insurance company and must be filed with the Division of Motor Vehicles for three years following an accident in which the driver was uninsured.”

The Best Car Insurance is Not Just Cheap Car Insurance

The trials of filing a claim, as well as the necessity of great coverage is something I know all too well. In 2015, I flipped my car 6 times, totalling the vehicle, but fortunately walked away completely unscathed. In that moment, having the best coverage was far from my mind, but I’m so thankful I had it.

Unfortunately, it’s likely that you will have to file a claim in your lifetime as well. Statistics show that the everyday driver averages an accident every 17.9 years. What’s even more frightening is that the average cost of injury inducing, but nonfatal accident is a jaw-dropping $80,700, a life-changing sum of cash for most people. Because of these facts, I would strongly advise looking into upgrading your coverage beyond the bare essentials.

While Alaska’s mandatory insurance coverage is higher than most states, it still could be worth your while to look into bolstering your coverage. In most cases, upgrading from cheap car insurance to a 100/300/50 plan isn’t as daunting of a leap as you might expect. For example, my quote for a 50/100/25 plan with Liberty Mutual was $1,320. To up my coverage to 100/300/50 the cost went up to $1,512. Although that’s almost $200 more annually, it’s virtually nothing compared to shelling out of pocket in the event of an accident. In my mind, it’s worth at least keeping a keen eye out for great deals on better coverage.

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Enter your zip code to compare rates from some of my top recommendations.

Beat the Average Premium: 9 Ways to Snag Cheap Car Insurance Rates

There are tons of factors that affect your insurance premiums, for better or worse. Your geography plays the biggest role in the cost of your premium and your annual rates. This chart is a rundown of the average monthly premiums in Alaska’s three biggest cities, just in case you’re curious what your neighbor might be paying.

Nine Ways to Lower Your Car Insurance

FAQs

Why are Alaska’s Rates so high?

Although Alaska is far from the most expensive state to insure a vehicle in the United States, it certainly isn’t the cheapest. A likely and obvious reason is because state required coverage is above average. Many states only require a 25/50/10 plan, which logically is cheaper to pay for than a 50/100/25 plan.

What to Expect
Average Monthly Premiums
United States $139
Alaska $131
Anchorage $131
Source Quadrant

Another potential cause for this is the fact that Alaska’s average labor cost is 30 percent higher than the US. More specifically, the average costs of auto parts in the state are 16 percent higher as well. Alaska is quite a remote destination, and it makes a lot of sense that its geography and harsh climate would add to the overall cost of repairing a vehicle.

What if I’m not a full-time resident?

The purchase insurance in the state of Alaska, you must either be a resident of the state or prove that your vehicle is principally parked there. The only other exemption to the rule is anyone with active military status.

The Bottom Line

Alaska: The Last Frontier is amongst the most beautiful places on Earth to take a drive, and with some attentive shopping, it can be downright affordable too. Sometimes it can be tough to push through the quotes process, but I highly encourage you to take the time and compare all of the options in your area. In the end, I truly believe it’ll be more than worth your while.

Get Quotes Now

Enter your zip code to compare rates from some of my top recommendations.

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