Best homeowners insurance in Alabama of 2021

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Owning a home can be a rewarding experience, but it comes with a number of responsibilities, like purchasing homeowners insurance. In Alabama, homeowners pay an average of $1,917 per year for $250k of dwelling coverage. Although the state’s median property value is just $147,900—significantly lower than the national average value of $229,700—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. Because Alabama is located in a region that is prone to hurricanes, purchasing homeowners insurance in the state can be costly. However, homeowners insurance helps pay to repair or replace your home if it is impacted by covered hazards such as extreme weather, fire or theft.

To determine how much you will 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 the 2020 J.D. Power’s 2020 U.S. Home Insurance Study. Specifically, we looked at ratings for overall satisfaction, coverage options, price and customer service. These companies made our list:

Home insurance company Average annual premium for $250K liability J.D. Power score
Centauri $2,866 N/A
State Farm $2,069 829/1,000
Auto-Owners $1,815 843/1,000
Allstate $1,368 829/1,000
ALFA $2,799 N/A

Centauri

For Alabama homeowners looking for more centralized home insurance companies, Centauri may be a great option. Though the company only operates within nine states — mainly along the Southeast region — its agents are well-experienced in situations impacted by storm weather. Some of the coverages it offers include protections for other structures, such as your garage or shed, additional living expenses during repairs and equipment breakdown insurance.

State Farm

State Farm is known for offering a wide range of coverage options, affordable premiums and discounts to help Alabama customers save money. Its home insurance policies generally cover damages caused by weather, vehicles, theft, vandalism and accidental water leakages, among other common coverages.

Auto-Owners

Auto-Owners was ranked highly in J.D. Power’s study for its seamless claims handling process and customer service. While it has standard home insurance coverage options, Auto-Owners also offers some special coverages such as for high value homes. For example, in the case that your policy does not fully satisfy the cost of replacement or repairs to your home, Auto-Owners has an increased cost endorsement available that provides up to an additional 25% of your coverage.

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. The company ranks above average on the 2020 J.D. Power customer satisfaction survey and has unique features such as its Claim Rateguard, which prevents your annual premium from increasing after filing a single claim within a five-year span.

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. Both HO-3 and HO-5 policies are available through the company. Additionally, Alabama customers looking to bundle both their home and auto insurance may be eligible for a policy discount.

Average cost of homeowners insurance in Alabama

Alabama home residents pay an average of $1,917 for $250k in dwelling coverage per year for homeowners insurance, which is higher than the national average of $1,477 per year. 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.

The rate you will pay depends on a number of factors related to your home, credit score and other personal details. See how Alabama’s average homeowners insurance rates compare with states in the same region:

Alabama Florida Georgia Mississippi
$1,917 $1,736 $1,506 $1,713

Quadrant Information Services, 2020

Home insurance considerations in Alabama

Alabama residents know that tornadoes and storms are likely to impact their homes at some point in time. Flood insurance is generally recommended for Alabama policyholders, but it is also important to account for other common causes of loss in the state to ensure you have the best coverage.

Alabama common causes of loss

According to data from the Insurance Information Institute (III), there are well over 51,000 single-family homes in Alabama that are at risk of being damaged or destroyed by a category five hurricane. That means that a major hurricane could damage or destroy a significant number of single-family homes in the state, but there other common causes of loss to be aware of:

  • Tornadoes: Tornadoes have the ability to rip up housing structures. In 2020 alone, Alabama was hit with 73 tornadoes.
  • Storms: Hurricanes and other storms are more likely to occur in Alabama due to its location along the Gulf coast.
  • Floods: As a Gulf coast state, Alabama’s frequent storms often lead to flooding, which can cause damage to your basement or other property.

Recommended coverages in Alabama

If you are shopping for Alabama homeowners insurance, it’s important to understand the different types of coverage available and what they offer protection for. For example, homeowners can look into insurance companies that offer flood insurance add-ons to prevent being left without proper coverage. Here are some recommended types of coverage to look out for:

  • 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.
  • Service line coverage: Damage to service lines, like water pipes and cable lines, extending into your home are 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: This covers any flood damage to property stemming directly from a severe storm, flash flood or other flood-resulting occurrence.

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.

Methodology

Bankrate utilizes Quadrant Information Services to analyze rates for all ZIP codes and carriers in all 50 states and Washington, D.C. 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 may be different.

Rates are determined based on 2020 Quadrant Information Services data.