Alaska Automobile Insurance Plan – AK AIP

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In the Last Frontier state, a driving record that includes traffic accidents or motor vehicle violations may make it hard for you to obtain auto insurance coverage. Alaska auto insurance companies may see you as a “high risk” and refuse to offer you coverage. If a less-than-stellar driving record does result in refusals, you may be able to turn to the Alaska Automobile Insurance Plan (AK AIP). As long as you meet the eligibility criteria described below, this Plan will ensure that you receive the state's minimum coverage of 50/100/25 liability insurance.

What is the Alaska Automobile Insurance Plan (AK AIP)?

The Alaska Automobile Insurance Plan became effective as Alaska’s assigned risk plan since 1979. Together with 10 other states’ assigned risk plans, the AK AIP makes up the Western Association of Automobile Insurance Plans. The Plan seeks to maximize the number of insured drivers on the road, while sharing the costs of covering high risk motorists among all the auto insurers in the state. If you qualify, the Alaska AIP will assign you to an auto insurer licensed in the Last Frontier state. So while you will find coverage, you will not be able to choose your auto insurer. Once the Plan assigns you to an insurer, you are guaranteed coverage for 3 years (unless you violate the eligibility requirement stated below within those three years.)

The Plan assigns drivers to insurers based on the market share of those companies in Alaska. For example, if Liberty Mutual covers 9% of all Alaska drivers, then Liberty Mutual will be assigned 9% of the high risk drivers in the Plan’s assigned risk pool. Any licensed auto insurer in Alaska should be able to tell you more about the Plan and submit an applicatio for you.

Alaska AIP Eligibility

In order to apply for coverage through the Alaska AIP, you must meet the following requirements:

  • Attest in writing that you have tried to find auto insurance on your own within the last 60 days – without success.
  • You also need to have both a valid Alaska driver’s license.
  • Finally, you must fill out the AIP application accurately and in good faith to your best knowledge.

Your application to the Alaska AIP may be held up if you have failed to pay an auto insurance premium to a previous insurer, or if you have not presented your vehicle for inspection. If you want insurance for Physical Damage, the insurer will want to see the condition of your vehicle before offering that coverage. The good news is, as soon as your pay the previous insurance bill and/or present your vehicle for inspection, your application should proceed. However, if your assigned insurer learns that you have lied or left out important facts about yourself, your car, or your driving record, you may be refused insurance through the Alaska AIP and banned from applying again for 12 months.

Alaska AIP Coverage

High risk drivers in Alaska are offered the same types of coverages as other drivers. The table below shows the mandatory coverages that you must have in order to be on the road legally in Alaska. Note that the minimum levels of coverage may not be appropriate for you, depending on your financial situation. For a higher premium, you can obtain higher levels of insurance coverage.

Mandatory CoverageAlaska Required Min. LimitsAlaska AIP Maximum Limits

Bodily Injury (BI)

$50,000 per person / $100,000 per accident$100,000 per person / $300,000 per accident

Property Damage (PD)

$25,000 per accident$50,000 per accident

Your assigned Alaska insurer is also legally required to make available to you the optional coverages shown below, should you wish to buy additional protection. Physical Damage insurance encompasses both Collision and Comprehensive. Each will come with a choice of deductibles: $100, $200, $250, $500, or $1,000. The higher the deductible amount, the lower your physical damage premium, but be realistic about how much you can pay out-of-pocket in the event of an accident. And know that antique autos (older than 25 years) and autos worth more than $50,000 can be excluded from Physical Damage coverage by your assigned insurer.

There is also optional coverage for Uninsured Motorist Bodily Injury off various limits, up to $1 million per person or $2 million per accident. And Uninsured Motorist Property Damage up to $50,000 per accident. Talk with your insurance agent about what is appropriate for you.

Optional CoverageAlaska AIP Min. LimitsAlaska AIP Maximum Limits

Medical Payments Coverage (MedPay)

$1,000 per person / accident$5,000 per person / accident

Physical Damage

Actual cash value of your car, up to $50,000No higher limit

Uninsured Motorists BI (UMBI)

$50,000 per person / $100,000 per accident$1MM per person / $2MM per accident

Uninsured Motorists PD (UMPD)

$25,000 per accident$50,000 per accident

Alaska AIP Premiums & Payments Plans

Auto insurance premiums for policies assigned through the Alaska AIP are subject to the AIP's own set of pricing factors, and usually higher than the average cost of auto insurance in Alaska. Alaska auto insurers consider many factors when calculating your auto insurance quotes, and the more you know about these, the better able you are to take action over time to find cheaper car insurance.

Once you are assigned an Alaska insurer, that company will handle all the billing related to your policy. You can choose one of three options for paying your bill:

  • The first is to pay the whole year’s insurance premium up front with your AIP application.
  • The second is to put down a deposit of 40% of the annual premium, and pay the balance within 30 days of receiving your policy.
  • nd the third is an installment plan. With installments you can pay just 25% of the annual premium up front and the rest in 5 equal monthly installments. Note that if you choose the installment plan, there is a $5 service fee added to the monthly bill.

If you do improve your driving record to the point where you find auto insurance in Alaska at a better rate, you can cancel the policy with your assigned insurer, and receive a prorated refund of any unused premium.

How to Apply to the Alaska Automobile Insurance Plan

You can contact any licensed auto insurance agent or broker in Alaska to see if the Plan is appropriate for you.

To learn more about the Alaska AIP, call the Alaska Division of Insurance at (907) 465-2515 or visit the Alaska Automobile Insurance Plan website.

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