Insurance Center

Alaska law requires that every motor vehicle registered for use in the state carry liability insurance.

About Insurance

Motor vehicle insurance is an insurance policy purchased by the owner of a vehicle. The insurance policy is in effect to cover the repair or replacement of the insurance owner's property―in this case, a motor vehicle. Insurance might also, depending on the type of policy, cover the medical costs associated with injuries suffered due to a collision.

If you are involved in a motor vehicle collision and it is obvious that it was not your fault, then the other driver's insurance will guarantee that you will have your property repaired or replaced and that any medical bills for injuries you have sustained will be taken care of by the insurance company. The responsibility falls on the insurance company to see that your losses are covered.

Insurance Sellers

Car insurance can be purchased from any car insurance salesperson or insurance broker. Insurance salespeople and brokers are required by law to be licensed. As a rule, insurance salespeople work for one insurance company and will, most likely, be the person you talk to when shopping for rates and coverage. An insurance broker is a licensed insurance salesperson who is independent but can sell you a policy from any one of many different insurance companies. Often times, a broker can help you find the best insurance deal for your dollar.

Costs and Payment Options

Insurance costs are calculated on an annual basis. If you are shopping for insurance, you will be quoted the cost of the insurance policy for a period of one year; the term which motor vehicle policies run.

Depending on the insurance company or broker, you may be given the option to pay the entire year's coverage in one lump sum, or, for a slightly higher cost, spread the payments out over four times a year, eight times a year, or once a month. How you choose to pay for the coverage should be based on your own financial situation. Don't let an insurance agent tell you that his or her policy is the only one you will qualify for, especially if you have a clean driving record. Shop around and get several quotes before you seal a deal.

Insurance Policies

If you own a fairly new car with a loan against it that you are still paying off, you will be required to carry full-coverage insurance on the vehicle. This type of policy guarantees the lender that if you are involved in a collision that causes major damage or even a total loss of your vehicle, even if the collision was your fault, the loan company will be paid the balance due on the loan in full. These insurance policies are, of course, more expensive than the basic coverage required by law.

Insurance policy prices are based on a number of factors, including how far you drive to and from work, the area where you reside, the number of points on your driving record and even whether you smoke cigarettes!

While you cannot exert much control over your part of town or the distance you must drive to work, you can make a difference in your insurance prices by making the effort to keep a clean driving record. It pays to obey the traffic law; insurance policies for those with bad driving records are sometimes more than double an exact policy written for someone with a clean driving record. And that can be a lot of money!

Mandatory Coverage

Alaska's mandatory insurance laws were passed to help protect citizens from the effects of a collision with an uninsured motorist.

Mandatory insurance laws mean that the owner or driver of a motor vehicle must have a liability insurance policy paid for and current any time that the vehicle is driven on the streets or highways. The minimum amounts required are:

• $50,000.00 for injuries or death to any one person

• $100,000.00 for total injuries or death per collision

• $25,000.00 for property damages

If you are involved in a crash, each party involved must show proof of insurance, no matter who was at fault, if there was any personal injury, death, or property damage exceeding $500.

Showing Proof of Insurance

Along with the requirement above, a driver is required to show proof of insurance any time that an officer of the law requests to see it, and each time the vehicle's registration is renewed.

Penalties for No Insurance

If you are involved in a collision and you do not have valid insurance, your driver's license will automatically be suspended for a period of 90 days to one year, depending on your driving record.

SR-22 Insurance

An SR-22 insurance policy is a motor vehicle liability insurance policy with an added responsibility from the insurance company. With an SR-22 policy, the insurance company is required to notify the DMV immediately if the policy lapses, is canceled, or is otherwise terminated.

This insurance policy lets the DMV know if a driver who has previously had a driver's license suspension or revocation is without insurance. One of the requirements of having a driver's license reinstated after a suspension or revocation is the assurance that the driver will carry insurance. By alerting the DMV of a policy lapse or cancellation, the DMV can take steps to keep a noncompliant driver off the road.