Best homeowners insurance in Alabama of 2022
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 $1,624 per year for $250k of dwelling coverage, according to Bankrate’s 2021 study of quoted annual premiums. Although the state’s median property value is just $154,000 — significantly lower than the national average value of $240,500 — having homeowners insurance is still important for Alabama residents.
Based on Bankrate’s extensive analysis, the best homeowners insurance companies in Alabama are ALFA, Allstate, Auto-Owners, Centauri and State Farm. Our top picks are based on third-party financial strength ratings, customer satisfaction, the latest premium data and available coverage options.
Best home insurance 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 2021 J.D. Power U.S. Home Insurance Study and the average cost of home insurance by carrier. We looked at customer satisfaction ratings, coverage options, average rates provided by Quadrant Information Services and customer service to find the best homeowners insurance companies.
|Home insurance company||Average annual premium for $250K in dwelling coverage||J.D. Power score|
Alabama Farmers Federation (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.
Learn more: Alfa Insurance review
Allstate is a reputable insurance company that offers a variety of policy discounts that can help you save money on your premium, like the early signing discount. The company ranks above average on the 2021 J.D. Power Home Insurance Study and has unique features like yard and garden coverage, which adds more financial protection for covered landscaping and riding lawn mower losses.
Learn more: Allstate Insurance review
Auto-Owners was ranked highly in the 2021 J.D. Power Property Claims Satisfaction Study for its smooth claims process and customer service. While it has standard home insurance coverage options, Auto-Owners also offers some special coverage types 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 amount.
Learn more: Auto-Owners Insurance review
Centauri stands out for offering the lowest average rates of any homeowners insurance company on our list.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.
Learn more: Centauri Insurance review
If you’re looking to lower the cost of homeowners insurance, State Farm may be a great option. The average cost of a State Farm home insurance policy is low and the company offers a wide range of discounts. State Farm is known for offering a wide range of coverage options as well. In addition to standard homeowners insurance policies, State Farm offers identity theft protection and replacement cost coverage.
Learn more: State Farm Insurance review
How much is homeowners insurance in Alabama?
Homeowners in Alabama pay an average of $1,624 for $250,000 in dwelling coverage per year for a standard insurance policy, which is higher than the national average of $1,312 per year. Alabama residents can expect to pay higher insurance premiums than the national average because homes in the state are generally more susceptible to damage from strong hurricane winds and storm damage.
The rate you will pay depends on a number of factors related to your home, credit score and other personal details. Location is a significant factor in determining your premium. Alabama residents pay around $250 more than Georgia residents and around $150 less than Mississippi residents for their home insurance, on average.
Home insurance 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, as it is not standard on most homeowners insurance policies. If your home is built in an area that is deemed at high risk for flooding, you may be required to purchase flood insurance, especially if you have a federally-backed loan. It is also important to account for other common causes of loss in the state to ensure you have the best coverage.
Common causes of loss in Alabama
According to data from the Insurance Information Institute (Triple-I), Alabama ranks 16th nationally for the number of single-family homes 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. Six months into 2021, Alabama had already seen nearly 50 tornados, which injured a total of 60 people and killed six.
- Storms: Hurricanes and other storms are more likely to occur in Alabama due to its location along the Gulf coast. In 2021 so far, Alabama has experienced tropical storms Claudette and Danny.
- Floods: As a Gulf coast state, Alabama’s frequent storms often lead to flooding, which can cause damage to your basement or other property. Flash flooding in the state can be quite severe and dangerous. In early October 2021, four residents of Birmingham, Alabama died in an emergency flash flood following a torrential downpour.
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 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 attached 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 can help cover flood damage to property stemming directly from a severe storm, flash flood or other flood-resulting occurrence. Flood insurance is typically not included on standard home insurance policies, but may be required if you have a mortgage and live in a flood zone.
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?
Those hoping to lower the cost of homeowners insurance Alabama have a few options. 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 insurance claim history.
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 likely 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 to 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.
Bankrate utilizes Quadrant Information Services to analyze 2021 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 will differ.