Best Homeowners Insurance in Alabama

Nearly three-quarters of Alabama residents own their homes. As long as you have a mortgage on your house in Alabama, homeowners insurance is a necessity because mortgage lenders require coverage.

While homeowners insurance isn’t glamorous, homeowners should understand their policy and its importance. Having the right protection makes a world of difference when you need to rely on it.

Homeowners insurance in Alabama protects your property, belongings, and financial wellbeing. Policies protect you from several potential sources of damage, from large-scale disasters like hurricanes and tornadoes to smaller-scale incidences like theft. 

The average home insurance cost in Alabama varies greatly depending on where you live and your house features. Below, we’ll break down the average cost of homeowners insurance in Alabama in select major cities and explain some of the many factors that influence premiums in the state so you know what to look for to find the best home insurance in Alabama.

Homeowners insurance on a $150,000 house in some notable Alabama cities costs between $1,075 and $2,493. The cheapest home insurance in Alabama on our list was in Birmingham, while Gulf Shores was the most costly for $150,000 houses.

Our list of 15 popular cities below shows where you can find low-cost homeowners insurance in Alabama. Keep in mind that these are just averages. Many factors affect rates, and you may be able to get coverage for less or more depending on your characteristics and details about your house.

Homeowners insurance on a $300,000 house in the same cities costs between $1,717 and $4,010 in Alabama. Again, Birmingham had the lowest average premium while Gulf Shores was the highest. Daphne, Foley, and Gulf Shores — three cities on our list closest to the Gulf of Mexico — all had premiums over $3,000 on average.

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.

As you can see, $300,000 worth of insurance always costs more than $150,00 worth of insurance. The more coverage you need, the more it’ll cost. 

You’ll also notice that insurance rates in Alabama’s coastal cities were higher on average than in other places. This is the result of the increased risk of hurricane damage for cities on the Gulf Coast. One hurricane can cost an insurer tens of millions of dollars in damages. To offset this potential cost, providers raise rates in areas where hurricanes are a threat. As it goes, Alabama ranks as one of the top-ten most expensive states for homeowners insurance, as it’s one of the most hurricane-prone states in the country.

But, this isn’t all bad news for homeowners in such cities. Alabama state law requires insurers to discount insurance for property owners who pass a wind mitigation inspection. Wind mitigation is the act of building or retrofitting your home to withstand strong winds and water from a potential hurricane or tropical storm.

Below, we’ll break down home insurance rates in some cities on Alabama’s Gulf Coast accounting for wind mitigation.

Look below at the average cost of homeowners insurance in Alabama in four popular coastal cities. Homes with wind mitigation are outfitted with certain features or built with construction methods more resistant to hurricane damage. They often relate to how your roof is attached or keeping water out of your house.

In the cities on our list, wind mitigation can save you about 50% on home insurance premiums on average.

While average home insurance premiums jumped about $1,000 in the same four cities for $300,000 homes, wind mitigation still cut premiums by about 45%. Homes without wind mitigation will almost always have higher premiums than homes with it.

The most common type of homeowners insurance is an HO3 policy. HO3 policies are divided into different parts based on what area of your home or livelihood they cover. The parts of a typical Alabama home insurance plan are:

Dwelling coverage: protects the main structure of your home and its many components. Your roof, walls, floor, patio, home wiring, air conditioning, and more fall under dwelling coverage.

Other structures coverage: protects the features on your property that aren’t attached to your main house, such as fences, sheds, gazebos, pools, and more.

Personal property coverage: covers your belongings in and around your property, such as clothes, electronics, tools, art, furniture, jewelry, and more.

Loss of use coverage: applies if you’re forced to move out of your house after damage from a covered peril. Loss of use coverage can cover your accommodations, food, gas, and more while temporarily displaced.

Liability coverage: covers your financial liability if someone gets injured on your property and pursues you for the damages. Your liability coverage can cover the injured party’s medical bills and your legal fees.

Medical payments coverage: similar to liability coverage, medical payments covers injuries someone can suffer. It’s designated for minor injuries only.

Several factors affect home insurance rates. In Alabama, some of the chief concerns that insurance companies take into consideration are:

Insurance companies need to minimize their risk when writing policies. To appropriately do so, they must analyze as many factors as they can about a potential policyholder and their property to verify that the person will be a safe investment to cover. A provider will want a policyholder to file as few claims as possible, meaning the factors determining premiums will all relate to the likelihood you file a claim.

In Alabama, location is important to insurance providers because it determines your susceptibility to severe weather. For instance, homes on or near the Gulf of Mexico in Alabama are much more at risk of hurricane damage than houses in far-inland cities, as we touched on earlier. This is one of the primary reasons Alabama coastal cities tend to have higher premiums and significantly factor in wind mitigation, as seen above in the average rates charts.

In 2023 alone, Alabama suffered seven severe storms, costing up to a billion dollars in damage. 

Other location-based considerations are also important. Being in a high-risk flood zone could raise your premiums since you’re more likely to suffer flood damage. Rural properties far from fire stations could also face higher premiums since emergency services’ delayed response times make your home riskier. 

Newer homes often have lower rates than older homes. Newer homes are built to the latest building and safety codes, which insurance companies like. New houses are more likely to survive severe weather. Older homes are much more likely to have issues that lead to claims, like leaky pipes and old roofs. Older homes are also more likely to have elements that scare off insurers altogether and prevent the homeowner from getting coverage. Out-of-date things like aluminum wiring and polybutylene pipes can deter some carriers.

Larger, more expensive homes typically need more coverage, so they tend to cost more to insure. The numbers above show that $300,000 worth of dwelling coverage always costs more than $150,00 worth of dwelling coverage.

Masonry homes – typically made from brick or concrete – are usually sturdier than wooden frame houses. Masonry homes can better resist strong winds from hurricanes and tropical storms, so they often have slightly lower rates than similarly sized frame homes. Also, a brick house is less likely to suffer fire damage.

Your home insurance deductible is the amount you pay when filing a claim before your insurer steps in to cover the rest of the damage. Common home insurance deductibles range between $500 and $2,000. 

When getting a policy, you choose your deductible. Choosing a higher deductible can get you cheap homeowners insurance in Alabama. Insurance companies reward policyholders who opt for higher deductibles because that person vows to pay more out of their own pocket before invoking the insurer’s help.

If you’ve filed multiple claims with your insurer, you may pay higher rates than someone who has never filed. Providers believe someone who has previously filed several claims is more likely to file another. 

When getting home insurance quotes in Alabama, insurance companies usually ask if you’ve filed any claims in the past 3 to 5 years. If you have, you may be considered higher risk and pay higher premiums.

To find the best home insurance companies in Alabama, you’ll need to compare policies from different providers. Every company will calculate the factors that impact your rates slightly differently, so your premiums will vary depending on your provider.

For an in-depth breakdown of the best home insurance companies in Alabama and their average rates, visit our pages for each Alabama city. We list several providers in every city we mentioned above, outlining the coverages you can expect and their average rates for homes at different price points. 

At Clovered, we’ve built a free online tool that allows you to get quotes from several of the best home insurance companies in Alabama on a single page to make shopping for the right policy easier. Clovered was conceived with the consumer in mind. Our goal is to simplify home insurance.

We want to help you find the coverage you need at the price you want. If you’d like to speak to a licensed agent on the phone to get coverage or just with general questions, please call 833-255-4117 Monday through Friday from 8:30 a.m. to 6 p.m. Or, you can email us anytime at [email protected].