Best cheap homeowners insurance in Birmingham

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Finding affordable homeowners’ insurance is a top concern for many Birmingham families. As recently as June 21, 2021, Alabama has two active natural disaster declarations through FEMA. With so many severe storms, hurricanes, tornadoes and wildfires that occur regularly in the state, it is important to have the right coverage in place to help mitigate against financial turmoil in the event your property becomes damaged.

The average cost of homeowners’ insurance in the United States is $1,312 annually, according to 2021 quoted annual premiums reviewed by Bankrate. However, in Birmingham, Alabama, insurance premiums are slightly higher, at an average of $1,495 annually for a $250,000 dwelling. In order to find the best homeowners’ insurance in Alabama, prospective policyholders need to carefully research each provider’s affordability, available discounts, breadth of coverage and average satisfaction rating. Bankrate has identified the top five best homeowners’ insurance providers in Birmingham based on this specific criteria to help in your search for the homeowners insurance company best-suited for your needs.

Best cheap home insurance companies in Birmingham

Perhaps the two most important factors to consider when determining which homeowners’ insurance company in Birmingham is best for you are affordability and average customer satisfaction. The table below highlights the top five cheapest providers in the region along with its average customer satisfaction index rating from the 2020 J.D. Power Home Insurance Study:

Home insurance company Average annual premium for $250k dwelling coverage J.D. Power score
USAA $746 889/1,000
State Farm $1,370 829/1,000
Nationwide $1,434 808/1,000
Allstate $1,502 829/1,000
Auto-Owners $1,580 843/1,000

USAA

USAA specializes in providing coverage to Birmingham active military members, veterans and their immediate family members. The company offers a variety of coverage options, including dwelling coverage, loss of use, personal belongings, personal liability, home sharing coverage, other structures and earthquake coverage. In terms of affordability, this provider is the cheapest homeowners’ insurance carrier that Birmingham has to offer, based on quoted premiums. On top of competitive premiums, the company also offers additional ways to save by providing discounts for being claims-free, bundling with auto insurance and having protective devices installed in your home.

Due to USAA’s status as an insurance provider solely for military members, the company is technically ineligible for an official ranking by J.D. Power. However, its extremely high rate of customer satisfaction is still accounted for; the company consistently receives the highest customer satisfaction index ratings across J.D. Power’s many industry surveys.

Learn more: USAA Insurance Review

State Farm

Featuring the second-best affordability among providers Bankrate reviewed, State Farm is another great homeowners’ insurance option to consider for Birmingham families. The company offers basic dwelling coverage as well as additional liability policies that customers can add to strengthen their financial protection. The provider also has a highly-reviewed mobile app, which makes policy management more convenient for smartphone users.

In terms of customer satisfaction, State Farm does well, with a score of 829 out of 1,000. Compared to the industry average of 823, State Farm’s performance in this area sets them apart within the industry.

Learn more: State Farm Insurance Review

Nationwide

When it comes to breadth of coverage, few providers offer more to prospective policyholders than Nationwide. Policies may include coverages for dwelling, ordinance or law insurance, contents, other structures, loss of use, personal liability, medical payments to others and even credit card coverage. Policyholders can further bolster their protection by adding optional coverages, such as brand-new belongings, water backup, identity theft, valuables plus, earthquake, flood or replacement cost plus insurance.

Despite a broad range of coverage options, Nationwide does not perform as well as other companies on this list in the customer satisfaction arena. Featuring a customer satisfaction index rating of just 808/1,000, Nationwide falls below what is considered the industry average.

Learn More: Nationwide Insurance Review

Allstate

While Allstate might not be as affordable as some other providers, prospective policyholders have access to a diverse range of coverages. Standard homeowners’ insurance policies through this provider include dwelling, personal property, liability protection, and guest medical protection coverage. Policyholders may optionally elect a personal umbrella policy, flood insurance or HostAdvantage® coverage for additional financial protection.

In addition to these special coverages, Allstate also offers a long list of available discounts to reduce the cost of your premium. Discounts include multi-policy, responsible payments, claims-free, welcome/loyalty, recent home purchase, easy pay, protective device and early signing savings opportunities. Allstate also features a customer satisfaction rating identical to State Farm’s, which reflects positively for the policyholder experience.

Learn more: Allstate Insurance Review

Auto-Owners Insurance

Despite being the most expensive provider on our list, Auto-Owners Insurance offers a competitive selection of available coverages. In addition to the standard property and casualty covers for damages or liability, optional coverages include guaranteed home replacement cost, water backup, special personal property, ordinance or law, equipment breakdown, homeowners plus and identity theft expense coverage.

Auto-Owners policyholders may find greater savings by having multiple Auto-Owners policies, paying on time or paying in full, getting an advanced quote, having green building materials or home features, installing protective devices, installing a water shut-off system, having an automatic generator, being mortgage-free and being claims-free. The company also boasts the second-highest customer satisfaction rating on our list at 843 out of 1,000.

Learn More: Auto-Owners Insurance Review

Home insurance coverage options in Birmingham

It is important to understand how your surroundings may impact your decision to strengthen coverage with optional add-ons. Standard homeowners’ insurance policies typically will not cover things like identity theft or water backup, which could be a problem for you depending on your location. The following options highlight some of the most important add-on coverages that Birmingham residents may want to consider during their homeowners’ insurance search:

  • Water backup coverage: Alabama is one of the wettest states in the country, receiving more than 55 inches of rainfall each year. When heavy rainfall occurs, it can cause waste water to back up into your home plumbing system. If you do not have water backup coverage, you could be stuck footing the bill for any resulting water damage from the backup that impacts your home, along with any necessary plumbing repairs.
  • Replacement cost coverage: Despite a slight decrease in property crime in Birmingham, the city’s property crime rate is still 305% higher than the national average. For this reason, it may be beneficial for Birmingham homeowners to consider replacement cost coverage to help them afford the cost of replacing stolen or damaged property.
  • Flood coverage: Most standard homeowners’ insurance policies will not cover damage caused by flooding. Especially in Alabama’s notoriously wet climate, Birmingham homeowners may need to add flood insurance, particularly if in a high-risk zone.

Home insurance discounts in Birmingham

Affording the cost of homeowners’ insurance in Birmingham is made easier thanks to the many available discounts provided by regional carriers. Depending on your personal situation, you may be eligible for significant savings through your selected provider. The following are some of the most impactful discounts that homeowners can qualify for when looking for a cheap homeowners insurance policy:

  • Multi-policy discount: Many providers offer a multi-policy discount to help reward policyholders for commitment. Depending on which of the best cheap homeowners’ insurance companies you choose from our list, the exact savings amount may vary.
  • Claims-free discount: The lower your perceived risk, the higher your reward, in most cases. Being claims-free may result in savings up to or exceeding 20% from some providers, either for your current policy or if switching providers with a claims-free history.
  • Protective device discount: Homeowners who have smoke detectors, deadbolt locks, fire extinguishers and other qualifying home protective devices are often eligible to receive a discount. In some cases, as with USAA, you may even be eligible to receive a credit to go towards installing these systems in your home.

While these are among the most impactful discounts that Birmingham homeowners can take advantage of, there are many others available that can help reduce the cost of coverage as well. Be sure to review the list of available discounts carefully with your current (or prospective) home insurance company to find out your eligibility. In addition to qualifying for discounts, you could also consider increasing your deductible to lower the price of your premium. The more risk you are willing to take on in the event of property damage, the lower your cost of coverage will be.

Frequently asked questions

What is the best home insurance company?

Finding the best home insurance company to meet your needs means conducting thorough research. Be sure to review each company’s average cost of coverage, average customer satisfaction, available discounts and breadth of coverage to determine which provider is best for your specific situation.

How much does home insurance in Birmingham cost?

The average cost of home insurance in Birmingham is $1,495 annually for a $250,000 dwelling. However, this price may be higher or lower depending on your personal information, including geographic location, home value, claims history and coverage level, among other factors.

How much home insurance do I need in Birmingham?

How much home insurance you need largely depends on your personal information and risk assessment. If you live in an area that’s particularly prone to rain (like Birmingham), then it may be worth it to consider add-on coverages like flood insurance or water backup coverage. In general, most insurance agents will advise you to secure enough homeowners’ insurance to cover the full cost of replacing your home and personal property should they be considered a total loss.

Methodology

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.

Written by
Carly Severino
Insurance Contributor
Carly Severino has two years of experience in writing for insurance domains such as Bankrate.com, Coverage.com, Reviews.com and TheSimpleDollar.com. She has experience covering a broad range of insurance products, including homeowners, life, auto, and medical insurance. Her expertise has also been called upon in the development of various websites for insurance companies, including Birtwhistle & Livingston, Inc., GovTech Insurance and Tax Title Services.
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