Owning a home can be a rewarding experience, but it comes with a number of responsibilities, like purchasing homeowners insurance. In Alabama, the homeownership rate is about 68%, which is higher than the United States national average of 63.9%, according to Data USA. And although the median property value is just $141,300—significantly lower than the national average value of $217,600—having homeowners insurance is still important for Alabama residents.
Most homeowners insurance policies protect your home against covered perils, or qualifying events, that can cause damage to your home and your personal belongings. If your home gets damaged or destroyed by hazards, such as extreme weather, fire or theft, your homeowners insurance helps pay to repair or replace your home.
Because Alabama is located in a region that is prone to hurricanes, purchasing homeowners insurance in the state can be costly. To determine how much you’ll pay in annual premiums, consider the value of your property and personal belongings, additional coverages you’ll need, like flood insurance, the deductible you choose and your policy’s coverage limits.
Best home insurance in companies in Alabama
Shopping for the best Alabama homeowners insurance can be challenging if you don’t know where to start. To simplify your search, we put together a list of the top homeowners insurance companies in Alabama, based on ratings from J.D. Power’s 2019 U.S. Home Insurance Study. Specifically, we looked at ratings for overall satisfaction, coverage options, price and customer service. These companies made our list:
- Alabama Farmers Federations (ALFA): Though not ranked by J.D. Power, ALFA Insurance is a great insurance option for Alabama homeowners that are interested in supporting their local agricultural community.
- Allstate: Allstate is a reputable insurance company that offers a variety of policies that can help you save money on your premium, like accident forgiveness.
- Amica: J.D. Power ranked Amica as the best homeowners insurance provide. Amica earned 5 out of 5 stars for overall satisfaction and customer service.
- Auto-Owners: Auto-Owners was ranked highly in J.D. Power’s study for its seamless claims handling process and customer service.
- State Farm: State Farm is known for offering a wide range of coverage options, affordable premiums and discounts to help customers save money.
|J.D. Power Rating||AM Best Rating||BBB Rating|
|Amica||5 out of 5 stars||A+||A+|
|State Farm||4 out of 5 stars||A++||A|
|Auto-Owners||4 out of 5 stars||A++||A+|
|Allstate||3 out of 5 stars||A+||A+|
Average homeowners insurance cost in Alabama
According to the Insurance Information Institute (III), Alabama home residents pay an average of $1,386 per year for homeowners insurance. However, the rate you’ll pay depends on a number of factors related to your home, credit score and other personal details.
To help determine the costs of the providers on our list, we got real quotes for a 35 year old homeowner with a $150,000 home and $100,000 in liability coverage.The home was built in 1990, is one story, and located in Montgomery.
- Amica — $1,312
- Auto-Owners — Contact a local agent for a quote
- Allstate — $1,459
- ALFA — Must pay a yearly membership fee before obtaining an insurance quote
Earlier, we mentioned that Alabama is one of the most expensive states for homeowners insurance. See how Alabama’s average homeowners insurance rates compare with states in the same region, according to the III.
Homeowners insurance in Alabama is not the most expensive compared to other southern states, like Florida and Mississippi. However, Alabama residents can expect to pay higher insurance premiums than the national average because homes in the state are susceptible to damage from strong hurricane winds, rain and flooding. Alabama is also among the top 10 states with the highest home theft rates.
Home insurance coverage options in Alabama
If you’re shopping for Alabama homeowners insurance, it’s important to understand the different types of coverage available and what they offer protection for. Here are some of the most common types of coverage that most basic homeowners insurance policies include:
- Dwelling coverage: This type of insurance pays for repairs to your home and detached structures on your property if they get damaged in a covered peril.
- Personal property coverage: This will help you repair or replace the valuables inside your home if they are damaged or stolen.
- Liability protection: This overs the homeowner in a lawsuit if someone on the property gets injured, or if the homeowner cause damage to someone else’s property.
- Guest medical protection: This insurance is specifically for medical expenses if someone on your property gets injured.
Because Alabama is often hit with hurricanes, homeowners should look into purchasing flood insurance, which is not included in basic homeowners insurance policies. You can probably purchase flood insurance as a separate policy from the same company that provides your homeowners insurance.
Homes that are closer to the Gulf of Mexico are more likely to flood after a hurricane, so check out FEMA’s flood map to determine if your home is located in a flood zone.
Common causes of home insurance losses in Alabama
According to data from III, there are well over 54,000 homes in Alabama that are at risk of being damaged or destroyed by storm surge in a category five hurricane. For a category one storm, less than 6,000 homes are susceptible to storm surge damage. That means that a major hurricane could damage or destroy a significant number of single-family homes in the state, especially around the immediate coastline.
In August 2005, Hurricane Katrina hit six southern states, including Alabama. The total number of home losses was 166,790, and $16,258,000 went towards rebuilding efforts across the six states. For homeowners in Alabama, having insurance is essential in order to help pay for damages that might occur from a hurricane or tropical storm.
Frequently asked questions
Is homeowners insurance required in Alabama?
Homeowners insurance is not legally required in any state. However, most mortgage lenders require homeowners with a loan to purchase a certain amount of coverage to protect their property from damage.
What is the cheapest homeowners insurance in Alabama?
The cheapest homeowners insurance depends on a variety of factors. Insurance companies estimate your premium based on the home’s size, building materials, location, safety features and add-ons, like a pool. Your rate will also depend on factors like your credit score, age and gender.
How do I get homeowners insurance in Alabama?
Getting homeowners insurance is simple. Whether you get a quote online or while speaking to an agent, you’ll need to provide information. These details can include the year your home was built, if you’ve filed any claims within the past few years, how the interior is designed and safety features you have. As the homeowner, you’ll also have to share your social security number, age, gender, marital status and income.
How can I save money on homeowners insurance?
To save money on your homeowners insurance premium, shop around and find a provider that offers discounts that you can take advantage of. It’s common for insurance companies to offer discounts for things like having a good credit score, bundling policies with the company, choosing a higher deductible and installing a home security system.