Alaska Car Insurance Laws & State Minimum Coverage Limits

Alaska State FlagIn most parts of the state, Alaska drivers are required by law to carry a minimum amount of car insurance as protection against the high cost of an accident. This required insurance provides for injuries, death, and property damage. All designed to protect both the at-fault driver from financial responsibility and the victim of the accident, ensuring no one faces a financial crisis.

Mandatory Coverage

Alaska state law required that all drivers carry a minimum amount of liability coverage, with the exception of certain parts of the state where registration and insurance are not required. There is an exception to this exemption – a driver with 6 or more points on his or her license due to violations is required to carry insurance.

In all non-exempt areas of the state, drivers must carry an insurance policy with the following liability coverage minimums:

  • Bodily injury liability coverage in the amount of $50,000 per person and $100,000 per incident for all people injured in one accident
  • Property damage liability in the amount of $25,000 to pay for damage to another person’s vehicle or any other personal property

It’s important to note that a driver who lives in an exempt area is not required to carry insurance, but can still be held financially responsible for an accident, which makes carrying insurance a good choice. Drivers may also be required by a lienholder to carry insurance.

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Optional Coverage

Alaska drivers can choose from a list of options to create a more comprehensive policy. While Alaska has some of the higher mandatory limits in the country, these limits may still be inadequate in a serious accident, and so many drivers choose to carry higher liability limits.

Among the other options to choose from when putting together a policy are:

  • Collision coverage, to pay for damage to your vehicle in the event of a crash where you are at fault. This coverage usually has a deductible that must be paid before coverage kicks in.
  • Comprehensive coverage, which pays for damage or loss in the event of a non-accident loss. This includes things like theft, vandalism, fire, or weather damage. This coverage also includes glass repair and replacement, and also carries a deductible.
  • Uninsured/Underinsured Motorist coverage, which will pay for the damage done by another driver who either has no insurance or whose insurance is not sufficient to cover the damage.
  • Rental Reimbursement, which will pay for a rental car during a covered claim.
  • Towing & Labor coverage, which pays for the services of a tow truck or other roadside needs for a non-accident situation.

Proof of Insurance Laws and Penalties

Unless you live in an exempt area, you are required by law to carry proof of insurance and to present it to law enforcement during a traffic stop or at the scene of an accident. Alaska has a variety of potential penalties associated with failure to provide proof of insurance or driving uninsured.

Drivers who are convicted of driving uninsured may face the following penalties, depending on the part of the state where the violation occurs. The Municipality of Anchorage has some of the toughest laws in place against driving uninsured:

  • A $100 fine for failure to produce proof of insurance when asked by a law enforcement officer
  • For a second offense, 3 days in jail and 3 days with a suspended license, a $250 fine, and a 30-day impounding of the vehicle
  • For a third offense, 3 days in jail, a $500 fine, and forfeiting of the vehicle
  • For a fourth offense, 20 days in jail and a $1,000 fine, as well as forfeiting of the vehicle

Penalties for a first offense vary, and there is no minimum. The jail time can increase to up to 90 days.

Furthermore, penalties for driving uninsured statewide include a license suspension ranging from 90 days to a full year. There are fees associated with license reinstatement.

Shopping for Car Insurance in Alaska

Alaska ranks at number 18 on Insure.com’s 2015 study of average car insurance rates across the country. The average rate of $1411 puts the state right around $100 higher than the national average of $1310.

The Alaska Department of Insurance provides assistance to drivers in choosing car insurance and shopping for rates. Their consumer information page offers a rate comparison guide that can be used to help determine the average cost of insurance and which companies offer the best rates.

Alaska requires all insurance companies to offer a discount to drivers over 55 who have completed an approved driver safety course, among other optional discounts.

High Risk Drivers

Some drivers may have difficulty obtaining insurance due to a blemished driving record or other issues. These are considered to be high-risk drivers, and generally receive the highest insurance rates. In some cases, these drivers may be turned down entirely for coverage.

Alaska participates in the Western Association of Automobile Plans, offering drivers assistance in obtaining coverage through the Alaska Automobile Insurance Plan. This is an assigned risk plan that places each driver with an insurance company – that company must provide a policy to ensure that all drivers can meet the legal requirements for insurance.

This plan is a last resort option offered to those who have been refused coverage on the open market, and can be costly.

Teen Drivers in Alaska

Alaska uses a Graduated Licensing Program that takes teen drivers through several stages as they learn to become safe drivers. This program begins at the age of 14 and ends at the age of 18. Each stage has requirements and restrictions that allow teens to develop driving skills over time.

Instructional Permit

Teens in Alaska can apply for an instructional permit at 14 years old. In order to obtain this permit, the teen must pass a knowledge test.

With the instructional permit, a teen driver can practice driving skills with a licensed driver over the age of 21 in the passenger seat at all times. The permit can be held for two years, but must be held for at least 6 months before applying for the Provisional License. The teen must also complete the Parent Supervised Driving Program, which requires 40 hours of practice driving.

Provisional License

A teen driver can apply for a provisional license after they met all of the requirements:

  • The teen must be at least 16 years old
  • The teen must have held a permit for at least 6 months
  • The teen must pass a road test
  • The teen must complete 40 hours of practice driving, 10 hours of which must include challenging circumstances such as nighttime driving or inclement weather

With the provisional license, a teen may drive unsupervised under a few restrictions:

Driving is not permitted between 1 a.m. and 5 a.m., unless there is a driver over 21 in the vehicle or for work purposes
No passengers are permitted in the vehicle who are under the age of 21, unless they are siblings, unless there is a driver over 21 in the vehicle or for work purposes

Full License

At 18, the teen driver can apply for a full driver’s license. At this point all restrictions are lifted.

All teen drivers in Alaska must carry insurance where required by law. A parent or guardian can provide this coverage through an existing insurance policy, and can continue to do so even when the teen is away at school, in most cases.

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