Is homeowners insurance required in Alabama?

Homeowners insurance is not legally required in any state. However, most mortgage lenders require homeowners to carry a policy. Even if you own your home outright, a home insurance policy is usually a good purchase. Home insurance is designed to protect your finances from the financial fallout of losses.

What is the cheapest homeowners insurance in Alabama?

Our study revealed that Cincinnati and USAA have the lowest average home insurance rates in Alabama. However, the cheapest homeowners insurance for you depends on a variety of factors, including the specific features of your house, the coverage types you’re looking for, the discounts you apply and your claims history.

How do I get homeowners insurance in Alabama?

Getting homeowners insurance is simple. You can often get a quote online or by phone, or you can visit a local agency. You’ll need your name, date of birth, and likely your Social Security number. You’ll also need details about your home, like the address, year built and age of the roof. An agent can help you determine how much home insurance you need. When shopping for coverage, it can be helpful to compare home insurance quotes from several companies so you can find the right coverage for you and your budget.

How can I save money on homeowners insurance?

To save money on your homeowners insurance, you may want to start by shopping around to find the most competitive price for the coverage you need. You can then take advantage of discounts, like savings for bundling your home and auto policies, having a home security system or having a newer roof.

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Best homeowners insurance in Alabama for 2023

Written by

Carol Pope

Edited by

Maggie Kempken

Reviewed by

Mark Friedlander

Updated Jan 03, 2023

The Bankrate promise

At Bankrate, we strive to help you make smarter financial decisions. To help readers understand how insurance affects their finances, we have licensed insurance professionals on staff who have spent a combined 47 years in the auto, home and life insurance industries. While we adhere to strict , this post may contain references to products from our partners. Here's an explanation of . Our content is backed by Coverage.com, LLC, a licensed entity (NPN: 19966249). For more information, please see our .

The Bankrate promise

At Bankrate, we strive to help you make smarter financial decisions. To help readers understand how insurance affects their finances, we have licensed insurance professionals on staff who have spent a combined 47 years in the auto, home and life insurance industries. While we adhere to strict , this post may contain references to products from our partners. Here’s an explanation of . Our content is backed by Coverage.com LLC, a licensed entity (NPN: 19966249). For more information, please see our

What To Know First

Alabama home insurance costs an average of $1,597 per year for a policy with $250,000 in dwelling coverage, which is more than the national average of $1,383 per year. Bankrate knows, though, that there’s more to insurance than price. Our research into the best homeowners insurance in Alabama includes an analysis of several key metrics in addition to average rates. We can help you find Alabama homeowners insurance companies that rank highly for customer satisfaction, have numerous coverage options and discounts, and are financially strong, which could help you find the best insurer for both your coverage needs and your budget.

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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 2022 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.

Bankrate utilizes Quadrant Information Services to analyze 2022 current rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Rates are weighted based on the population density in each geographic region. Quoted rates are based on 40-year-old male and female homeowners with a clean claim history, good credit and the following coverage limits:
- Coverage A, Dwelling: $250,000
- Coverage B, Other Structures: $25,000
- Coverage C, Personal Property: $125,000
- Coverage D, Loss of Use: $50,000
- Coverage E, Liability: $300,000
- Coverage F, Medical Payments: $1,000
The homeowners also have a $1,000 deductible and a separate wind and hail deductible (if required).

These are sample rates and should be used for comparative purposes only. Your quotes will differ.
Bankrate Scores are calculated on a five-point scale and primarily reflect a weighted rank of industry-standard ratings for financial strength and customer experience in addition to analysis of quoted annual premiums from Quadrant Information Services, spanning all 50 states and Washington, D.C. We know it is important for homeowners to be confident their financial protection covers the likeliest risks, is priced competitively and is provided by a financially-sound company with a history of positive customer support.

To determine how well the best home insurance companies satisfy these priorities, third-party agency ratings from J.D. Power, AM Best, S&P, NAIC, and Moody’s had the most impact on the companies’ Bankrate Scores. As price is a common consideration for homeowners, we analyzed quoted premiums based on 40-year-old male and female homeowners with a home policy with $250,000 in dwelling coverage. This profile, assessed across nearly 35,000 ZIP codes in the U.S., provided a basis on which homeowners may compare each provider.

While coverage options, insurer availability, affordability and customer experience are often the top priorities, Bankrate also analyzed each insurer’s online and mobile resources for policy management and claims handling. Insurance is rapidly evolving to keep pace with our digital world, so these aspects also carried weight in determining Bankrate Scores.

Best home insurance companies in Alabama

Based on our analysis of the Alabama homeowners insurance market, USAA, State Farm and Auto-Owners are among the top choices for coverage. Both USAA and State Farm offer average rates lower than the state average of $1,597 per year. If you’re shopping for the best home insurance in Alabama, you may want to start with quotes from these companies:

Insurance company	J.D. Power	AM Best	Average monthly premium*	Average annual premium*
USAA Rating: 3.7 stars out of 5 3.7 Bankrate Score	J.D. Power 884 /1,000	AM Best A++ (Superior)	Average monthly premium* $63	Average annual premium* $750	Get a quote
State Farm Rating: 3.2 stars out of 5 3.2 Bankrate Score	J.D. Power 829 /1,000	AM Best A++ (Superior)	Average monthly premium* $111	Average annual premium* $1,329	Read review
Auto-Owners Rating: 3.2 stars out of 5 3.2 Bankrate Score	J.D. Power 825 /1,000	AM Best A++ (Superior)	Average monthly premium* $141	Average annual premium* $1,697	Get a quote
Allstate Rating: 3.5 stars out of 5 3.5 Bankrate Score	J.D. Power 829 /1,000	AM Best A+ (Superior)	Average monthly premium* $132	Average annual premium* $1,589	Get a quote
Cincinnati Insurance	J.D. Power Not rated	AM Best A+ (Superior)	Average monthly premium* $62	Average annual premium* $746	Get a quote

Advertising Disclosure

Insurance Disclosure

*Premiums are for $250K in dwelling coverage

**Not officially ranked by J.D. Power due to eligibility restrictions

Best home insurance company for military-focused coverage

USAA

3.7 Bankrate Score

USAA Insurance review

Explore Bankrate's review

J.D. Power:: 884 /1,000
AM Best:: A ⁺⁺
Avg. annual premium for 250k dwelling: ^$ 750

With a near-perfect Bankrate Score of 4.8, USAA tops our list of best home insurance companies in Alabama. However, coverage is only available to current and former military members and select family members, so it won’t be an option for everyone. If you do qualify, though, you may be able to take advantage of the USAA’s low average rates, excellent customer satisfaction and coverage options tailored to the needs of military families.
Pros
Unique military-focused coverage options

Consistently high customer satisfaction ratings
Cons
Strict eligibility requirements

Only available over-the-phone and online for policy and claims management

Alabama city	USAA average annual premium for $250K dwelling
Birmingham	$712
Huntsville	$760
Mobile	$803
Montgomery	$708
Tuscaloosa	$697

USAA Insurance review

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Best home insurance company for local agencies

State Farm

3.2 Bankrate Score

State Farm Insurance review

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J.D. Power:: 829 /1,000
AM Best:: A ⁺⁺
Avg. annual premium for 250k dwelling: ^$ 1,329

State Farm, the largest home insurance company in the country by market share, could be a great option for Alabama homeowners who prefer doing business with local agents rather than by phone or online. State Farm also offers an array of endorsements and discounts to help you personalize your policy. The company does have a higher-than-average overall complaint index with the National Association of Insurance Commissioners (NAIC), though, indicating that the NAIC receives more complaints than average about State Farm.
Pros
Hundreds of agencies located throughout Alabama

Scored above industry average for property claims satisfaction in J.D. Power 2022 U.S. Property Claims Study
Cons
Higher-than-average number of complaints with the NAIC

Not as many potential discounts as some competitors

Alabama city	State Farm average annual premium for $250K dwelling
Birmingham	$1,198
Huntsville	$1,082
Mobile	$1,101
Montgomery	$1,112
Tuscaloosa	$1,008

State Farm Insurance review

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Best home insurance company for robust coverage

Auto-Owners

3.2 Bankrate Score

Auto-Owners Insurance review

Explore Bankrate's review

J.D. Power:: 825 /1,000
AM Best:: A ⁺⁺
Avg. annual premium for 250k dwelling: ^$ 1,697

If you’re looking for a policy that can be highly personalized, Auto-Owners could be the best choice. The company offers numerous endorsements to broaden your coverage, including guaranteed home replacement cost (for qualifying homes), water backup coverage, equipment breakdown and home cyber protection. Auto-Owners’ average premium is the highest on our list, though, so it might not be the best fit for homeowners on a tight budget.
Pros
Robust coverage options allow for a highly-personalized policy

Fewer overall complaints with the NAIC
Cons
May not be the cheapest option on average

Digital tools are available but not highly-rated

Alabama city	Auto-Owners average annual premium for $250K dwelling
Birmingham	$1,540
Huntsville	$1,760
Mobile	$1,264
Montgomery	$1,567
Tuscaloosa	$1,759

Auto-Owners Insurance review

Explore Bankrate's review

Best home insurance company for discount opportunities

Allstate

3.5 Bankrate Score

Allstate Insurance review

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J.D. Power:: 829 /1,000
AM Best:: A ⁺
Avg. annual premium for 250k dwelling: ^$ 1,589

Allstate has the second-highest average premium on our list, but the company might balance that out with plenty of savings opportunities. You might save with Allstate’s welcome discount if you switch your home insurance from another carrier, and with the loyalty discount if you maintain your coverage. Other savings include buying a newly constructed home or purchasing a new-to-you home, having home security devices or signing up for an Allstate policy at least seven days before your current policy expires.
Pros
Coverage options available that may be unavailable with other companies

Numerous discount opportunities could help you save
Cons
Average premium more expensive than state average

Scored below segment average for overall customer satisfaction in the J.D. Power 2022 U.S. Home Insurance Study

Alabama city	Allstate average annual premium for $250K dwelling
Birmingham	$1,543
Huntsville	$1,806
Mobile	$1,078
Montgomery	$1,626
Tuscaloosa	$1,345

Allstate Insurance review

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Best home insurance company for low average rates

Cincinnati Insurance

Cincinnati Insurance review

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J.D. Power:: Not rated
AM Best:: A ⁺
Avg. annual premium for 250k dwelling: ^$ 746

Cincinnati might not be the most well-known insurance carrier, but Alabama homeowners who are looking for the cheapest home insurance company may want to get a quote. Cincinnati’s average annual premium of $746 is 53% lower than the state’s average home insurance premium. Cincinnati isn’t rated by J.D. Power, though, so you may want to do additional research on customer satisfaction before buying a policy.
Pros
Low average premiums

Superior financial strength rating according to AM Best
Cons
Not rated by J.D. Power

Quotes not available online

Alabama city	Cincinnati average annual premium for $250K dwelling
Birmingham	$532
Huntsville	$577
Mobile	$1,048
Montgomery	$607
Tuscaloosa	$609

Cincinnati Insurance review

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How much is homeowners insurance in Alabama?

The average cost of home insurance in Alabama is $1,597 per year for $250,000 in dwelling coverage. Compared to the national average of $1,383 for the same coverage, Alabama homeowners pay about 15% 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 strong storms. Home insurance is less in Alabama than it is in neighboring states, though; Mississippi homeowners pay an average of $1,840 per year and Florida’s average home insurance rate is $1,648 per year.

Alabama city Average annual premium for $250K dwelling coverage

Birmingham $1,442

Huntsville $1,477

Mobile $1,812

Montgomery $1,340

Tuscaloosa $1,466

Alabama city	Average annual premium for $250K dwelling coverage
Birmingham	$1,442
Huntsville	$1,477
Mobile	$1,812
Montgomery	$1,340
Tuscaloosa	$1,466

Home insurance in Alabama

Alabama residents should know that the state can experience severe weather, including hurricanes and tornadoes. Understanding the common causes of damage in Alabama may help you better choose coverage options that fit your needs.

Common causes of loss in Alabama

Alabama only has a small section of coastline, but much of the southern part of the state is only separated from the coast by a hundred miles (or less) of Florida’s panhandle. This means that many of the causes of damage in Alabama are related to coastal weather.

Hurricanes: Due to its location on the Gulf Coast, Alabama is at risk for damage if a hurricane develops. Hurricanes can cause widespread and devastating damage.
Floods: Part of the damage associated with hurricanes is flooding. Floods are common in many parts of the state, with most counties experiencing at least 11 flood events per year, according to the Federal Emergency Management Agency (FEMA).
Tornadoes: Despite not being in “Tornado Alley,” Alabama had the second-highest incidence of confirmed tornadoes in 2021, according to the Insurance Information Institute (Triple-I). The state saw 100 tornadoes last year, and seven people lost their lives to the storms.

Home insurance coverage options in Alabama

If you are shopping for Alabama homeowners insurance, it’s important to understand the different types of coverage available and what kind of protection they offer. In addition to standard coverage types like dwelling, personal property and liability, you may want to consider some optional add-ons for more financial protection:

Roof replacement cost: 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 could 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 in case of damage by an excluded peril.
Flood insurance: Damage caused by flooding isn’t covered by standard home insurance policies. While a few companies offer 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.

Frequently asked questions

Homeowners insurance is not legally required in any state. However, most mortgage lenders require homeowners to carry a policy. Even if you own your home outright, a home insurance policy is usually a good purchase. Home insurance is designed to protect your finances from the financial fallout of losses.
Our study revealed that Cincinnati and USAA have the lowest average home insurance rates in Alabama. However, the cheapest homeowners insurance for you depends on a variety of factors, including the specific features of your house, the coverage types you’re looking for, the discounts you apply and your claims history.
Getting homeowners insurance is simple. You can often get a quote online or by phone, or you can visit a local agency. You’ll need your name, date of birth, and likely your Social Security number. You’ll also need details about your home, like the address, year built and age of the roof. An agent can help you determine how much home insurance you need. When shopping for coverage, it can be helpful to compare home insurance quotes from several companies so you can find the right coverage for you and your budget.
To save money on your homeowners insurance, you may want to start by shopping around to find the most competitive price for the coverage you need. You can then take advantage of discounts, like savings for bundling your home and auto policies, having a home security system or having a newer roof.

Written by

Carol Pope

Insurance Writer

Best homeowners insurance in Alabama for 2023

The Bankrate promise

What To Know First

On This Page

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Leaving so soon? Your custom quotes are just minutes away.

How Bankrate chose the best home insurance companies in Alabama

Methodology

Bankrate Score

Best home insurance companies in Alabama

USAA

State Farm

Auto-Owners

Allstate

Cincinnati Insurance

How much is homeowners insurance in Alabama?

Alabama homeowners insurance rates by city

Home insurance in Alabama

Common causes of loss in Alabama

Home insurance coverage options in Alabama

Frequently asked questions

Is homeowners insurance required in Alabama?

What is the cheapest homeowners insurance in Alabama?

How do I get homeowners insurance in Alabama?

How can I save money on homeowners insurance?