Best homeowners insurance in Alabama for 2024

Compare the best homeowners insurance companies in Alabama

Based on our analysis of the Alabama homeowners insurance market and data sourced from Quadrant Information Services, USAA, Auto-Owners, Allstate, State Farm and Cincinnati Insurance are among the top choices for coverage. Four of our five featured companies have average rates lower than the state average of $2,817 per year, or $235 a month. We also reviewed each company's ranking for financial stability with AM Best, as well as the customer satisfaction scores from J.D. Power's 2023 Home Insurance Study. If you’re shopping for the best home insurance in Alabama, you may want to start with quotes from these companies:

The top 5 home insurance companies in Alabama

Additional Alabama home insurance companies to consider

Foremost

Travelers

How Bankrate chose the best home insurance companies in Alabama

Bankrate looked at several aspects of each carrier in our search for the best Alabama homeowners insurance. First, our editorial team of licensed agents 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 J.D. Power for customer satisfaction, the 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.

Cheapest home insurance companies in Alabama

Though challenging, there are some popular insurance providers in the state that offer cheap home insurance policies. Here are the top providers in Alabama typically offering cheap average premiums.

How to get cheap Alabama home insurance

Fortunately, finding the best Alabama home insurance may not mean breaking the bank. Here are several tactics to try when searching for the best cheap home insurance in Alabama:

• Gather multiple quotes: Gathering more than one quote when you are searching for the best homeowners insurance in Alabama can pay off with significant savings. Every company has its own algorithm for determining rates, so you are likely to get a range of prices when you have multiple quotes. Shopping around allows you to choose the most affordable option.
• Work on your credit rating: Individuals with high credit ratings have a demonstrated ability to pay their bills in full and on time. This means they are more likely to earn a favorable rate from insurers. Increasing your credit score over time may mean you'll pay less for your policy.
• Repair your roof: An aging or damaged roof might be the cause of many high-cost claims. If your roof is on the older side, replacing it with a new one might lower your insurance rate. If you use storm-resistant materials, you may even earn a discount from some insurers.

Best home insurance discounts in Alabama

In addition to our strategies above, take advantage of discount opportunities to save significantly on your Alabama home insurance. Most insurers offer at least a few, and it could be easy to qualify for some. The following are commonly available:

How to save on home insurance policy renewals in Alabama

When you’re up for renewal on your homeowner’s policy, there are a few things you can do to help secure lower premiums going forward.

• Better credit: In Alabama, insurers can use your credit history when determining your premiums; if you’re able to improve your credit after you’ve taken out your policy, you may be able to have them reassess and offer you a lower premium.
• No claim history: If you’re able to avoid making claims on your policy, you may be able to get a cheaper premium when renewing your policy.
• Home renovations: If you’ve made home improvements to make your home more safe and secure, insurance companies may view it as less risky to insure and lower your premiums as a result.
• Lower coverage limits: If possible, you can lower your coverage limits to secure a lower premium; only do so if you’re still receiving adequate coverage for your property.

How much is home insurance in Alabama?

The average cost of home insurance in Alabama is $2,817 per year for $300,000 in dwelling coverage. Compared to the national average of $2,304 for the same coverage, Alabama homeowners pay about 22 percent 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 landfalling hurricanes. The state is also prone to severe convective storms and tornadoes. Average home insurance costs are less in Alabama than in neighboring states, though; Mississippi homeowners pay an average of $3,285 per year and Florida’s average home insurance rate is $5,440 per year.

Alabama homeowners insurance rates by city

While the state of Alabama faces its own unique factors for home insurance premiums compared to the rest of the country, where you reside within the state can also impact your rates. Find out what home insurance rates might look like in your area compared to the rest of Alabama.

*Rates are for $300,000 in dwelling coverage.

What does home insurance cover in Alabama?

Alabama homeowners might assume that a standard home insurance policy, called an HO-3, offers all the coverage they need. While a standard policy includes open perils coverage for your dwelling and other structures, it usually covers your personal property on a named perils basis. This means your home and other structures are covered from everything except what’s specifically excluded, while your personal property is only covered from what’s specifically named. As such, you may want to read your policy carefully to identify any gaps in coverage.

• Wind, hail and tornado damage: According to the Insurance Information Institute, these made up over 40 percent of claims in 2022. This standard coverage can be incredibly useful for homeowners living in Dixie Alley, a stretch of tornado-prone states in the Southern U.S. Note that some policies exclude windstorm coverage, so you may want to check with your insurance provider to purchase this as an endorsement or standalone policy.
• Fire or lightning: Almost 22 percent of home insurance claims in 2022 were caused by fire or lightning. Fortunately, this coverage is included in standard home insurance policies.
• Water damage and freezing: To be clear, coverage for water damage in a standard policy does not cover flooding, so if your home is at risk for flooding, you may want to purchase a separate flood policy. Water damage and freezing, however, is included in a standard policy. This covers incidents like damage from a defective appliance or frozen and burst pipes. Again, you may want to check your policy for exclusions. 

Additional home insurance coverage types in Alabama

If you are shopping for Alabama homeowners insurance, it may be important to understand the different types of coverage available and what is covered (and not covered) by a standard home policy. The following coverage endorsements may help ensure your home is financially protected from common causes of loss in Alabama.

• Roof replacement cost: Alabama is in second place in the Insurance Information Institute's listing of top 10 states for tornadoes. That suggests that you may want to have the most robust coverage possible for roof damage. This endorsement means you may file a claim for the full replacement cost of your damaged roof, rather than just its depreciated value. If you are eligible for this endorsement, it may be worth considering.
• 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 to financially protect your home from damage to your service lines.
• Flood insurance: Floods are common in many parts of Alabama, with some counties experiencing over 100 flood events in the last 30 years, according to the Federal Emergency Management Agency (FEMA). Damage caused by flooding isn’t covered by standard home insurance policies. While a few companies offer flood coverage as 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.

Common Alabama home insurance problems

Homeowners in Alabama may face some challenges when securing a homeowner’s policy, such as:

• Rising rates: Although inflation is easing, the increased cost of labor and construction materials remains high, in part caused by higher numbers of weather-related events and insurance claims. According to the National Association of Realtors, Alabama is projected to be the eighth-most expensive state for home insurance in 2024. This is in part because the state’s insurance losses have more than doubled in the last decade. 
• Higher risk: The increased rates of flooding, tornadoes and tropical storms in the state may keep homeowners in certain regions from being able to qualify for adequate coverage. In Alabama, average home insurance premiums have increased by $557 since 2020.

Frequently asked questions

Additional profiles:

• Coverage A, Dwelling: $150,000, $350,000, $450,000
• Coverage B, Other Structures: $15,000, $35,000, $45,000
• Coverage C, Personal Property: $75,000, $175,000, $225,000
• Coverage D, Loss of Use: $30,000, $70,000, $90,000
• Coverage E, Liability: $500,000
• Coverage F, Medical Payments: $1,000

Bankrate Scores 

Our Bankrate Score considers variables our insurance editorial team determined impacts policyholders’ experiences with an insurance company. These rating factors include a robust assessment of each company’s product availability, financial strength ratings, online capabilities and customer and claims support accessibility. Each factor was added to a category, and these categories were weighted in a tiered approach to analyze how companies perform in key customer-impacting categories.

Each category was assigned a metric to determine performance, and the weighted sum adds up to a company’s total Bankrate Score — out of 5 points. Our scoring model provides a comprehensive view, indicating when companies excel across several key areas and highlighting where they fall short.