Homeowners Insurance in Birmingham, Alabama (2024)

And there’s one thing every homeowner in Birmingham should have: homeowners insurance. The right insurance policy protects your property and your finances from unexpected damage. We’ve analyzed several top insurance companies in Birmingham and broken down their rates, coverages, and more. 

The average cost of homeowners insurance in Birmingham is about $1,396. This is lower than the average rates in other large, notable cities in Alabama like Mobile and Montgomery. 

Your lender will require you to get a home insurance policy if you have a mortgage. While this might seem unfair at first, homeowners insurance is the best – and often only – way for you and your mortgage lender to recoup the investments in your house if it suffers damage. For instance, most people don’t have enough money to pay for repairs if a fire or hurricane wrecks their home. 

Home insurance protects your property from these and many other covered perils. Here’s a list of the average rates in Birmingham from some top providers.

The rates in this article are sourced from the Alabama Department of Insurance, which provides real premiums from several companies in the state. These are average annual premiums for an HO-3 policy, which is the most common type of homeowners insurance plan.

Travelers has the lowest average premium on the list, and Allstate was the only other provider that came in below the city average. Well-known carrier Nationwide came in as the most costly, nearly $1,100, or 79%. over the Birmingham average.

The cost of homeowners insurance is affected by many factors. One of the most significant ones is home value. Generally, the more a home costs to build or buy, the more it costs to insure. Insurance companies value houses by either their replacement cost or their market value.

The replacement cost of a house is how much it would take to rebuild the home if it was completely destroyed. It’s tied to construction and labor costs. The market value is based on the real estate market and what someone would pay to buy the house.

Insurance companies can use either valuation method to determine how much dwelling coverage you’ll need, which we’ll get to later. For now, take a look at the list of providers in Birmingham again, this time for premiums on $150,000 homes only.

As you can see, costs are lower across the board when looking at only $150,000 homes. Travelers was still the lowest, and Allstate was the only other insurer with premiums listed below the city average at the $150,000 price point.

Even if you’re looking for $150,000 worth of coverage, certain features of your home can cause rates to vary. For example, a $150,000 house built from concrete or bricks may cost less to insure than a $150,000 house constructed with wood. Masonry homes often have lower premiums than frame homes. Additionally, living in an area with high crime rates can cause you to pay more for coverage.

Note the extent of premium increases when looking for coverage on a $300,000 house:

As you can see, there are plenty of notable insurance companies in Birmingham to choose from. We listed seven major ones, but over 20 insurers filed rates with the state government. One popular carrier not listed is Universal Property & Casualty, one of the largest insurance companies in Florida that also writes in several other southern states, including Alabama.

State Farm, Allstate, and Farmers are some of the biggest insurance companies in the country. When shopping for home insurance, it’s essential to compare quotes from several providers in your area to find the best one for you. Look at the potential discounts they offer. Notice different exclusions and coverages.

Yes, there are independent insurance agents in Birmingham. An insurance company is the entity that backs the policy and would pay you if you filed a claim. With so many insurance companies in Birmingham, it can be hard to choose the right one. Thankfully, there are insurance agents to help with that decision. An independent insurance agent works with multiple carriers, and they can help you find a policy with any of them.

We’re Clovered, an independent insurance agency that operates in several southeastern states, including Alabama. We can help you find home insurance – and any other insurance you need – in the Birmingham area. We partner with some of the nation’s top insurance carriers, so you have options to find the coverage you need.

HO-3 policies are the most common type of homeowners insurance. These plans come with different coverages as follows:

Dwelling and other structures coverages protect the structures on your property. Dwelling coverage is for your house and the permanent, connected parts of it. Features covered under dwelling coverage include your roof, walls, floors, windows, wiring system, water heater, and more.

Other structures coverage is for the fixtures on your property not attached to your main house, like sheds, fences, gazebos, and detached garages or carports.

Personal property coverage financially guards the belongings in and around your house. Your furniture, clothes, electronics, tools, bicycles, and more fall under personal property coverage. Your insurer will reimburse you for these things if they’re stolen or damaged from covered perils.

Loss of use applies when you need to move out of your home after it sustains damage. If you need to relocate while your insurance company rebuilds or repairs your house, your loss of use coverage enables your provider to reimburse you for expenses like hotels, gas, and food.

Liability and medical payments coverages protect your finances when someone gets injured and wants to pursue you for the damages. Let’s say your dog bites someone. Liability coverage can cover your legal fees and the injured person’s medical bills if you’re found liable. Medical payments coverage is similar, but it’s designed to cover minor injuries only.

Another threat relevant to many Birmingham homeowners is the possibility of flood damage. Many areas in Birmingham are prone to flash floods. This is problematic because home insurance doesn’t cover damage from flooding. While city officials are working to address the issues faced by those in flood-prone areas, solving city-wide drainage issues can take time. This is problematic for homeowners because home insurance doesn’t cover damage from flooding.

The Federal Emergency Management Agency (FEMA) creates and maintains flood zone maps for the country. Your mortgage lender will require flood insurance if you live in a high-risk flood zone, called a special flood hazard area.

There are flood zones in Birmingham. For example, some areas south and west of Birmingham-Shuttlesworth airport are in flood zones. Also, some properties along Fivemile Creek are in federally designated flood zones. 

If you need flood insurance, you can always choose the National Flood Insurance Program, which is administered by FEMA and is the largest flood insurer in the nation. You may also have several private flood insurance companies to choose from that could offer greater coverage at a competitive rate.

To find the best flood insurance option in your area, you can turn to us. Clovered’s flood insurance quote form is straightforward and easy to fill out. One of our licensed agents will get back to you, and they will help you get the flood insurance you need at the price you want.

Insurance companies look at a myriad of factors when determining premiums. In addition to the ones we’ve mentioned, insurance companies take a policyholder’s claims history into account. Someone who has filed any insurance claims will likely pay more than someone who has never filed a claim before.

Having attractive nuisances around your home can cost you, too. Certain features, like pools and trampolines, make your home more dangerous. Insurers believe they increase your property’s chances of a liability claim, so they may charge you more to offset your risk.

Birmingham’s central location in the state means it’s largely sheltered from hurricanes, which can be a major factor in home insurance rates. On the other hand, tornadoes are a rather prevalent threat to central Alabama residents and have plagued Birmingham in the past, with over 50 tornadoes recorded in the state in 2023. The likelihood of wind damage from a tornado can raise rates in Birmingham.

Aspects of your policy itself, like your deductible and how much coverage you want, also directly impact how much you pay. Adding optional endorsements or riders will increase your premiums, too.

When shopping for home insurance, it’s crucial to compare quotes from multiple providers. Clovered can help you do this. Our objective is to simplify insurance. We want to find you coverage in Birmingham.

You can utilize our online quoting platform or speak to a licensed agent on the phone by calling 833-255-4117 Monday through Friday from 8:30 a.m. to 6 p.m. You can also email us anytime at [email protected].