The Best Alabama Homeowners Insurance Companies
Alabama’s annual premiums for homeowners insurance are on the higher side — on average $1,358 per year for an HO-3 policy, compared to the nationwide average of $1,173. That said, how much you’ll pay can vary a lot depending on your home’s size, your assets, and your address. Use our tool to find your best rates:
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Finding the best homeowners insurance in Alabama starts with knowing what events your home is most at-risk of receiving. Alabama is blessed with a balmy subtropical climate and more inland waterways than any state in the nation. It also has some serious weather to contend with too. Alabama’s weather, in fact, can make shopping for a policy a bit tricky. For example, a policy on a $300,000 house in Huntsville, in the far northern part of the state where tornadoes are not uncommon, may be vastly different than a policy on the same house if it’s located on the Gulf Coast, where hurricanes and tropical storms occasionally touchdown. Regardless of where you’re located, it’s important to shop around.
How We Found the Best Homeowners Insurance in Alabama
There are a number of factors you’ll want to consider when you’re looking for the best homeowners insurance in Alabama. Price is important, of course, but it’s only one consideration. We also looked at customer service, possible discounts, and the financial health of insurers.
Basically, we followed the procedures that we used in our national review of the best homeowners insurance. We took a deep dive into each company’s website to see how well they answered questions and provided useful information. We reviewed financial health ratings from Moody’s, S&P Global, and A.M. Best, and looked at what consumer advocacy sites like J.D. Power and Consumer Reports had to say about their claims process. Then we picked up the phone and asked for sample quotes based on a mid-priced house in Montgomery, Alabama — a single-story brick home on the market for $134,000 — to test each insurer's customer service and prices ourselves.
There are more than 80 companies offering homeowners insurance in Alabama, and though we didn’t look at all of them, here’s how the largest five — along with a bonus pick that’s worth looking at if you’re in the military — stack up.
Alabama Homeowners Insurance Reviews
Allstate does a lot of things right. Its website is robust and helpful. It has perks like a nifty digital home locker tool that allows you to create a detailed visual inventory of your valuables and furniture, which is easily sent to an agent if the need arises. Creating an online quote is simple, with explanations available along the way to help you understand what’s covered and what’s not. It gives you three quote options: standard, choice, and premium, and the middle option, choice, outlined a policy similar to those we received from other agents at a comparable price.
Consumer Reports’ homeowner insurance survey gives them a score of 5 out of 6 (“very good”) for both the claims experience and timely payment after filing a claim. The only place it got dinged is in the damages amount awarded, where it only rates “good” — placing it at the bottom of the list among the other insurers we looked at. Likewise, it scores lower than State Farm and USAA with J.D. Power, but above Travelers and Farmers. Its financial stability ratings with Moody’s, A.M. Best, and S&P Global are all in the “A” category, so it’ll be there for you even in a catastrophic weather event such as a hurricane.
In the Consumer Reports homeowners’ insurance survey, State Farm tied for second place (with two other companies — Farmers and Travelers), while J.D. Power gives it a 3 out of 5 ranking for claims and a 4 out of 5 overall. It puts it in the middle of those we looked at for customer service. But it comes in a strong second place, after USAA, in rankings of financial stability with Moody’s, A.M. Best, and S&P Global. That’s especially good if there’s a large scale natural disaster in your region: you want to know that it's financially solid enough to handle a great number of claims at once.
State Farm has some nice online perks if you want to get a quote before talking to an agent. For example, you have access through its site to an online estimating tool that can give you an idea of the replacement costs for items that have been lost or damaged. It also has some nice credit and loan calculators and a robust learning section, which it calls Simple Insights.
Alfa Mutual Group
Alfa is a regional insurer active in 11 states (mainly Alabama) with a deep knowledge of the needs of southern homeowners. It is very competitive on price, but it’s hard to assess its overall worth because it's too small to be included next to national companies in Consumer Reports or financial stability experts like Moody’s.
Our experience with its customer service was mixed. The price it gave us for a policy was low (but not the lowest: that claim goes to Allstate). But the agent insisted that the replacement value for the home, which was selling for $134,000, was $149,000, which seemed low to us, and was definitely below the $200,000 that other insurers suggested we use as a basis for our policy. Most insurers, like Alfa, will give you the option to insure at replacement value — i.e. the estimated cost of replacing your house with a similar one if the worst happens. It’s usually more than the market value of the house, which may be what you paid for it, but which probably doesn’t correspond to the amount it will take to rebuild at today’s construction prices.
Alfa’s website doesn’t have a lot of extras. You can’t get a quote online, and its “Learn More” section features just a few articles that don’t really tell you much. You also can’t make a homeowners insurance claim on the site (you can report an auto claim, though), nor can you make a payment — we got our quote through an email with a local realtor, or you can call an agent. It does have a mobile app, called Alfa2Go, but it seemed to be geared more to those with auto policies than homeowners insurance. If you like working with smaller companies, however, and want to take advantage of low premiums, you may want to give an Alfa agent a call.
Travelers Companies, Inc.
Travelers gave us by far the lowest quote — less than half of State Farm’s offering, which made us a bit wary. There was little information on the website to explain the online quote we received, and an agent did not return our call within 24 hours, as we had asked.
On the plus side, it has good ratings from Consumer Reports and J.D. Power — on par with those from Farmers and State Farm — for the ease and ability with which it handles claims, although it earned only a 2 out of 5 from J.D. Power for its ability to handle the repair process. It also has “A” level rankings from Moody’s, A.M. Best, and S&P Global. Its low quotes and high customer claims ratings is enough for us to consider recommending it as an option, but you’ll definitely want to dig deeper into the coverage details.
Farmers Insurance gave us a quote that was among the highest we received, but that may not be true for you. And, there are some good reasons to take a closer look at them. The nearly 7,500 readers who responded to Consumer Reports’ latest survey — all of whom have filed claims in the last few years — gave Farmers Insurance an 82 ranking, second only behind USAA. It also earned a unanimous “very good” score for its claims experience, which covers everything from the ease of finding an agent to the amount of payout.
Another plus: it offers more possible discounts than any of the other companies, including some fairly unique ones such as a discount if your home is LEED-certified. Its website didn’t wow us, but it does cover the basics. You can make a claim online, and there is a live chat feature if you need help. Its app is pretty standard, and allows you to pay bills, make a claim, view documents, and more.
Other to Consider: USAA
We couldn’t really include USAA in our regular ratings, because they only serve current and former members of the U.S. military and their families. But considering that two of the top five employers in Alabama are military installations — Redstone Arsenal and Maxwell Air Force Base — there’s a strong enough military presence in the state to merit a mention.
Besides, USAA is, by most accounts, an excellent company. In every measure we took, it came out on top. In Consumer Reports homeowners insurance survey, it ranks ten points above its closest competitors. It earns 5 out of 5 points from J.D. Power both for claims and overall, and the highest ratings possible for financial stability from Moody’s, A.M. Best, and S&P Global.
Although anecdotal evidence suggests that its customer service is not what it used to be, we had a pleasant conversation with a helpful agent on the phone. Its website’s information center is not as robust as Allstate or State Farm, but if you’re in the military, then you should compare quotes from USAA.
Alabama Homeowners Insurance Annual Premium Comparison
|Alfa Mutual Group||$1,217|
Quotes are for annual premium amounts for a single-story brick home in Montgomery on the market for $134,000.
There may be relief for Alabama’s Gulf Coast homeowners.
Residents in Baldwin and Mobile Counties, Alabama’s two coastal counties, have seen their insurance premiums skyrocket in recent years because of the prevalence of hurricanes and catastrophic storms that can significantly damage homes not equipped to handle it.
In 2011, the Alabama State Legislature created the Strengthen Alabama Homes (SAH) program to help residents of these counties retrofit their homes to better withstand wind events. Funded by the Alabama Department of Insurance, the program offers grant money to residents who retrofit their homes to a standard called FORTIFIED. A FORTIFIED home designation lowers both your insurance premiums and the likelihood that your home will be damaged or destroyed with the next Katrina-like storm.
At the time of our research, the overwhelmingly successful SAH grant program has temporarily been suspended because of the high number of applications. But we’d suggest you keep an eye on the website if you’re in the coastal region — they’ve been allocating grants of up to $10,000 for mitigation efforts.
Northern Alabama residents face challenges too.
Northern Alabama sits directly in the middle of a region informally called “Dixie Alley” which is vulnerable to strong tornadoes. Dixie Alley tornadoes are known in particular for having high levels of precipitation, due to the proximity of the Gulf of Mexico. Unlike tornadoes originating in the midwestern part of the country, Dixie Alley tornadoes can come at any time of the day or night, and are not limited to a particular “tornado season.” This adds a level of unpleasant uncertainty to the lives of residents of this region.
But we don’t want you to panic. Alabama homeowner insurance policies generally cover damage from wind events including tornadoes, hurricanes, and hail storms (although you’ll want to talk to your agent to be sure). What they do not cover is flood damage, and the many inland waterways of northern Alabama mean that you may want to purchase a flood loss policy from the federal government’s National Flood Insurance Program. FEMA (the Federal Emergency Management Agency) estimates that a single inch of water in your house can do more than $20,000 worth of damage, and has a handy map to show you which Alabama counties are most prone to flooding. The organization also offers a flood map service center that lets you plug in an address and download a map showing the likelihood of flooding.
Alabama has a homeowners bill of rights.
In 2012, the Alabama state government passed a law called the Alabama Homeowners Bill of Rights Act. This Act that requires agents to place the consumer’s interests first, has been making waves for some time, but only a few states — Texas and Florida — have enacted such legislation. There may come a time when such a document is mandated at the federal level, but Alabama residents should rest easy knowing that the state’s bill of rights legislates their right to competitive pricing and financial transparency, among other things. In the event of a dispute with your insurance agency, the 12 rights enshrined by the document may play an important role in ensuring a favorable outcome for you.