The 5 Best Alabama Homeowners Insurance Companies

If you live in Alabama, you can enjoy mild winters, miles of beaches, and countless historic landmarks, but owning a home is not without risk. According to the Insurance Information Institute, when a deadly outbreak of tornadoes ripped through Tuscaloosa in 2011, 5,300 homes were destroyed. Katrina, Rita, and Ivan, three of the 10 costliest hurricanes in United States history, also hit the state. And as if that isn’t enough, Alabama ranked fourth in the nation for wildfires in 2015.

These multiple threats have pushed the average cost of an annual homeowners premium (for a $250,000 HO-3 policy) to $1,422. That’s over $400 higher than the national average, and a main driver for why Alabama is leading the country in the number of residences that meet FORTIFIED Homes standards. Retrofitting or building homes that are storm-resistant is one way to keep costs down. That said, premiums fluctuate wildly depending on where your home is located, what discounts you qualify for, your deductible, and more, so shopping around is crucial. Our quote tool is a good place to start.

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It takes more than a great price to be a worthy insurance provider, so we researched five providers’ financial stability, customer service, discounts, and quote process, using a method similar to our review on nationwide providers. We couldn’t examine every insurance provider across Alabama — there are 88 companies in the two coastal counties alone. Instead, we concentrated on the top five by statewide market share. We compared each provider using customer satisfaction data gathered by Consumer Reports and JD Power and financial stability ratings by Moody’s, A.M. Best, and S&P Global. We followed up with a lot of phone calls and hours exploring each provider’s website, getting quotes for a sample house to test the quote process, and seeing how much information they had available for consumers.

We discovered a few things all five providers have in common: Websites are a great starting point, but you get more information and a more accurate quote by speaking directly with an Alabama agent familiar with the area. Your credit score and claims history come into play, along with your plans for retrofitting or upgrading your home. And — this is crucial — providers tend to have more discounts and additional options not included on the website.

Alabama Homeowners Insurance Reviews

State Farm

State Farm is a popular choice for Alabama consumers, garnering 30.2 percent of the market — almost three times the amount as its nearest competitor, Alfa. Its website is easy to navigate and better than almost all the other providers, with more educational tools and advice — like how to create a home inventory or estimating your home’s replacement cost. As with the other four companies, State Farm lists basic coverage and exclusions, but recommends dealing with a local agent to get the nitty-gritty due to the many variables available in specific policies.

State Farm has an online quote tool, but because the ZIP code of our sample home was near the Gulf, we were directed to an agent. The same held true for the other providers we looked at: Coastal properties have different policy needs and limitations, including extra wind coverage and discounts for certain building protections, that the average quote tool just can’t accommodate. A large dose of Southern charm made this process fairly painless, but it took several days and another phone call to receive the actual quote, possibly because they were a smaller office without a huge staff. Results could be different depending on the agent you contact.

Alfa Mutual Group

In order to get a homeowners policy with Alfa, you’ll need auto insurance through the company. Other providers offer discounts for bundling policies, but Alfa is the only one of those we researched that requires it — which is why the “Get a Quote” menu only gives auto, health, and life insurance options. Typing in a ZIP code under auto took us to a list of Alabama agents and the one we contacted was happy to work up a quote for homeowners insurance, but he also needed auto information.

Alfa is a regional company and is not included on Consumer Reports’ or J.D. Powers’ customer satisfaction surveys, so word of mouth will be the best way to get a sense of what it’s like to have the company as your insurance provider. However, we liked all the tools on Alfa’s website, including a live chat function and tips and definitions for those unfamiliar with homeowners insurance. The info isn’t quite as robust as State Farm’s or Allstate’s, but the basics are there. And like all the providers, while some discounts were listed, only a local agent can help with a complete rundown on a specific property.

Allstate

Allstate does the best job of explaining discounts and coverage options on its website, with links to stories and videos on a variety of coverage topics from landscaping to pools to when to buy insurance if you’re moving. Even if you aren’t a customer, this site is worth researching. Allstate also stands out for explaining the ins and outs of flood insurance, including average claim costs and waiting periods. Allstate also referred us to a local agent for a quote, but were the only provider to explain the reason: Our coastal ZIP code needed the personal touch.

We were impressed that the agent we called looked up the property online for most of the information, which saved us both about 10 minutes of repetitive question-and-answer time about basements or crawlspaces, brick or vinyl siding, and other features. Allstate received high financial ratings from all three of our sources, and was on par with three of the other providers on customer service rankings from J.D. Power and Consumer Reports. Only USAA really stood out above the rest.

USAA Insurance Group

USAA is a unique provider because it only represents current and former members of the US military and their families. In order to even get a quote, you need to be eligible. We used the online chat feature to speak with an agent, who bent over backward to find a pathway to membership, looking up spouses’ and in-laws’ military records and eventually recommending that we check with its affiliate, Liberty Mutual, when we came up short. Like the others, USAA’s website does a good preliminary job of describing discounts, and speaking with a representative by phone told us all we needed to know about additional coverage the company provides at extra cost. Consumer Reports ranks USAA higher than the other four providers we looked at, so it’s an excellent option if you meet the eligibility requirements.

Farmers Insurance

Farmers has more discounts than anyone on our list except Allstate and offered the most endorsements. It’s the only provider to offer a discount for LEED certification, an increasingly popular green building standard. It also has high ratings for financial stability, and comes in just below USAA for consumer satisfaction. Its website has a thorough explanation of coverage options and we especially liked its glossary of terms, handy for those of us who are not insurance professionals. As with the other providers, we were sent to an agent to get a quote. They were friendly and efficient, providing us with a quote via email within 24 hours — not same-day service, but close to it, and about the same timeframe as everyone but State Farm.

Did You Know?

A low premium is useless if your provider doesn’t back it up with service.

State Farm

Allstate

USAA

Farmers

Overall

82 77 92 78

Timely payment

Better Better Best Better

Claims experience

Medium Medium BetterMedium

The table above displays national Consumer Reports survey results, which were based on nearly 10,000 customers who had filed homeowners insurance claims. Overall customer satisfaction is rated out of 100. Claims and courtesy responses are given on a sliding scale from “Worse” to “Best.” The great news is that none of the providers we researched had “Worse” ratings. (Alfa, a regional provider, was not included in the survey.)

Beat the wind with a FORTIFIED Home.

“We may be a little bit unique,” Charles Angell, deputy commissioner and chief actuary at the Alabama Department of Insurance told us. “We have so much tornado activity as well as exposure to hurricanes. Consumers can buy flood insurance through the National Flood Insurance Program, but wind protection is another matter. Availability of wind coverage is not an issue. But affordability of wind coverage in any coastal state is perhaps a little bit of a challenge.” According to data from the Alabama Department of Insurance, wind coverage can make up the bulk of your home insurance premium, sometimes totaling thousands of dollars a year.

One big trend that will pay off for Alabama consumers is a push toward FORTIFIED Home certification, a national standard for resilient new construction and retrofitting. According to Angell, Alabama leads the country with 3,000 homes already certified. “They have much reduced damage from a hurricane, or even from a tornado if they have a FORTIFIED Home,” he says. “Down on the coast, insurance companies are required to provide a discount. In 2018, insurance companies upstate will also have to provide discounts. Downstate, even just at the bronze level, a homeowner on the coast could get as much as a thousand-dollar-a-year reduction in their homeowners premium.” These discounts are available for all five of the Alabama homeowners insurance providers we reviewed.

FORTIFIED Home Certification Discounts

Strengthening

Effect

Discount

Bronze

Roof system Minimize water entry and roof detachment. 20-35%

Silver

Windows and doors Minimize wind and water coming in home and adding to roof failure. 35-45%

Gold

Structural system Ties the home elements together and to the ground. 40-50%

Getting new quotes every few years can also help you save.

Lars Powell, director of the Alabama Center for Insurance Information and Research, spoke with us about the state’s changing insurance landscape. Powell echoed the benefits of seeking FORTIFIED Home certification, but also recommends that consumers compare quotes among companies every year or two.

“It isn’t fun,” he admits, “but it is worth your time to shop around because you could save thousands of dollars a year.” Powell advises checking the appraisal or inspection report you received when you purchased your home. The information you need for quotes will be there, and every company will ask the same questions.

“The flood insurance map has also changed,” Larson says. That means you could be paying for flood insurance you are no longer required to carry. Updated information can be found at the FEMA flood map site. More information on how floods and other perils affect your insurance can be found in the center’s new Alabama Coastal Insurance Shopper’s Guide, which can be downloaded from the ACIIR website. This resource is aimed at coastal homeowners, but the bountiful advice it contains for understanding your homeowners insurance is applicable to the rest of the state as well.

The Bottom Line

State Farm

Alfa

Allstate

USAA

Farmers

Birmingham

$2,382 $1,987 $970 $1,486 $2,146

Alexander City

$2,484 $1,860 $1,219 $1,569 $2,385

Bay Minette (With wind)

$3,694 $6,889 $2,981 $3,781 $4,105

Bay Minette (No wind)

$1,489 $1,312 $642 $940 $915

Where you live makes a big difference in your annual premium. To illustrate how significantly annual premiums can vary across the state, we used a calculator from the Alabama Department of Insurance. These numbers reflect data for an HO-3 policy with:

  • $300,000 coverage
  • A 10-year-old property
  • A 710 credit score
  • No lapses
  • No multi-policy discount
  • Smoke detectors
  • Deadbolts
  • No claims
  • Non-smoking, 40-year-old resident

Premiums within the same Birmingham ZIP code differed by a whopping $1,412 between providers. And check out Alfa’s wind coverage costs compared to every other provider — it’s twice as much as Allstate’s! Need we say it again? Shop around.

Find the best homeowners insurance in your area.

Get a quote by entering your ZIP code and start saving today.