Best homeowners insurance in Alabama for 2023

Compare the best homeowners insurance companies in Alabama

Based on our analysis of the Alabama homeowners insurance market and data sourced from Quadrant Information Services, USAA, Allstate, State Farm, Auto-Owners and Cincinnati Insurance are among the top choices for coverage. Four of our five featured companies have average rates lower than the state average of $1,632 per year, or $136 a month. We also reviewed each company's ranking for financial stability with AM Best, as well as the customer satisfaction scores from J.D. Power's 2023 Home Insurance Study. If you’re shopping for the best home insurance in Alabama, you may want to start with quotes from these companies:

*Premiums are for $250K in dwelling coverage
**USAA not officially ranked by J.D. Power due to eligibility restrictions

The top 5 home insurance companies in Alabama

Additional Alabama home insurance companies to consider

Foremost

Travelers

How Bankrate chose the best home insurance companies in Alabama

We looked at several aspects of each carrier in our search for the best Alabama homeowners insurance. First, we obtained average rates from Quadrant Information Services. Next, we analyzed each carrier’s coverage offerings, discounts and digital tools, to help you find a company that offers the financial protection you need and the functionality you may want. We also factored in third-party ratings from the 2023 J.D. Power U.S. Home Insurance Study for customer satisfaction, the National Association of Insurance Commissioners (NAIC) for complaint frequency and AM Best for financial strength.

We combined all of this research to create a proprietary Bankrate Score for each company. The Scores are on a scale of 0.0 to 5.0, with higher scores indicating a higher ranking in each category. Knowing the Bankrate Score for each company can help you quickly analyze the overall quality of that carrier’s home insurance product. This might make it easier to find the best home insurance company for you.

Cheapest home insurance companies in Alabama

Though challenging, there are some popular insurance providers in the state who offer cheap home insurance policies. Here are the top providers in Alabama with cheap premiums, starting with USAA as the cheapest.

How to get cheap Alabama home insurance

Fortunately, finding the best Alabama home insurance may not mean breaking the bank. Here are several tactics to try when searching for the best cheap home insurance in Alabama:

1. Gather multiple quotes: Taking the time to get more than one quote may show you which carrier could offer the lowest rates for your individual insurance needs. Each company uses its own method of determining premiums, so shopping around may help you find one that can meet your insurance needs and your budget.
2. Work on your credit rating: Insurers often reward policyholders who have a high credit rating with lower rates. Improving your credit score may earn you lower home insurance rates in Alabama.
3. Repair your roof: An aging or damaged roof might be the cause of many high-cost claims. If your roof is on the older side, replacing it with a new one might lower your insurance rate. If you use storm-resistant materials, you may even earn a discount from some insurers.

Best home insurance discounts in Alabama

In addition to our strategies above, using discounts wisely may be a way to save significantly on your Alabama home insurance. Most insurers have at least a few, and they might be easy to qualify for. Here are some that are commonly seen across Alabama home carriers:

How to save on home insurance policy renewals in Alabama

When you’re up for renewal on your homeowner’s policy, there are a few things you can do to help secure lower premiums going forward.

• Better credit: In Alabama, insurers can use your credit history when determining your premiums; if you’re able to improve your credit after you’ve taken out your policy, you may be able to have them reassess and offer you a lower premium.
• No claim history: If you’re able to avoid making claims on your policy, you may be able to get a cheaper premium when renewing your policy.
• Home renovations: If you’ve made home improvements to make your home more safe and secure, insurance companies may view it as less risky to insure and lower your premiums as a result.
• Lower coverage limits: If possible, you can lower your coverage limits to secure a lower premium; only do so if you’re still receiving adequate coverage for your property.

How much is home insurance in Alabama?

The average cost of home insurance in Alabama is $1,632 per year for $250,000 in dwelling coverage. Compared to the national average of $1,428 for the same coverage, Alabama homeowners pay about 14 percent more each year. Average rates in Alabama may be higher than the national average due to the state’s position near the coast and relatively high likelihood of being hit with landfalling hurricanes. The state is also prone to severe convective storms and tornadoes. Average home insurance costs are less in Alabama than in neighboring states, though; Mississippi homeowners pay an average of $1,900 per year and Florida’s average home insurance rate is $1,981 per year.

Alabama homeowners insurance rates by city

While the state of Alabama faces its own unique factors for home insurance premiums compared to the rest of the country, where you reside within the state can also impact your rates. Find out what home insurance rates might look like in your area compared to the rest of Alabama.

*Rates are for $250,000 in dwelling coverage.

What does home insurance cover in Alabama?

Alabama homeowners should be aware of what types of damages their policies cover, and what is excluded. Doing so will allow you to secure additional policies or endorsements to keep your property and belongings best protected. These are some examples of the common types of damages homeowners may deal with that are covered by standard home insurance policies.

• Wind and tornado damage
• Fire or lightning
• Theft and other property damage

Additional home insurance coverage types in Alabama

If you are shopping for Alabama homeowners insurance, it may be important to understand the different types of coverage available and what is covered (and not covered) by a standard home policy. The following coverage endorsements may help ensure your home is financially protected from common causes of loss in Alabama.

• Roof replacement cost: Despite not being in “Tornado Alley,” Alabama had the third-highest incidence of confirmed tornadoes in 2022, according to the Insurance Information Institute (Triple-I). This endorsement means you'll get the full replacement cost for your damaged roof rather than just the depreciated cash value. Not all roofs qualify, but if yours does, it might be a helpful option.
• Service line coverage: Damage to service lines — like your water, gas and electric lines — is generally not covered in basic homeowners insurance policies. You may want to consider adding this type of coverage to your policy to financially protect your home from damage to your service lines.
• Flood insurance: Floods are common in many parts of Alabama, with some counties experiencing over 100 flood events in the last 30 years, according to the Federal Emergency Management Agency (FEMA). Damage caused by flooding isn’t covered by standard home insurance policies. While a few companies offer flood coverage as an endorsement, you’ll generally need to buy a separate flood insurance policy from the National Flood Insurance Program (NFIP) or from a private carrier that sells flood insurance.

Common Alabama home insurance problems

Homeowners in Alabama may face some challenges when securing a homeowner’s policy, such as:

• Rising rates: Inflation is causing construction-related materials and labor costs to increase, making home replacement or reconstruction more expensive, which often leads to more expensive home insurance premiums for consumers. According to the Insurance Information Institute (Triple-I), replacement costs have increased a cumulative 45 percent over the past four years, outpacing the U.S. inflation rate.
• Higher risk: The increased rates of flooding, tornadoes and tropical storms in the state may keep homeowners in certain regions from being able to qualify for adequate coverage.

Frequently asked questions