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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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Philip Palermo leads the For the Home category at Reviews.com, including smart home and home security services. Since November 2015, he’s worn a number of hats at Reviews.com, but these days, Philip helps manage the day-to-day editorial content workflow. He’s worked at Engadget, The Unofficial Apple Weblog, Big Think, and several local/regional newspapers. Philip’s also been known to use a lot of spreadsheets to gauge how much value he’s getting out of his various services and subscriptions.
The Best Alabama Homeowners Insurance Companies
Finding the best homeowners insurance in Alabama starts with knowing what events put your home at most risk. Alabama is blessed with a balmy subtropical climate and more inland waterways than any other state, but also has some serious weather to contend with. Alabama’s weather can make shopping for a policy a bit tricky. For example, a policy on a $300,000 house in Huntsville, in the far north of the state where there’s just the occasional tornado, might cost a mere third of the price of a policy for a house on the Gulf Coast, where hurricanes and tropical storms can do serious damage. Regardless of where you’re located, it’s important to shop around.
How We Found the Best Homeowners Insurance Companies in Alabama
There are a number of factors you’ll want to consider when you’re looking for the best homeowners insurance in Alabama. We followed the methodology used in our national review of the best homeowners insurance and looked at the top Alabama writers by market share. We then took a deep dive into every company’s website to see how well online quote tools worked and whether the sites presented useful information to answer our questions. 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 processes.
To gain a well-rounded sense of every company’s offerings and customer service, 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. However, we didn’t weigh these findings too heavily, as rates are highly personal and will vary. You can see how vastly quotes can differ by checking out premium data compiled by the Alabama Department of Insurance in our FAQ.
The 6 Best Homeowners Insurance Companies in Alabama
Alabama Homeowners Insurance Reviews
Allstate
Allstate does a lot of things right, but its online tools and resources is where the insurer shines. For homeowners who are still gauging what their policy needs, you can use Allstate’s Common and Costly Claims tool to discover local claim trends and their average costs. Allstate also has 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 when filing a claim.
Creating an online quote is simple too, with explanations available along the way to help you understand what’s covered and what’s not. The online quote process took us through a series of detailed questions, but we were ultimately directed to call an agent at the end. While this might be a little inconvenient, it is the best way to get all your specific questions answered. Especially for those new to homeowners insurance, Allstate’s tools and resources will help people feel confident shopping and navigating their policy.
Consumer Reports’ homeowner insurance survey gave them a “Very Good” for both the claims experience and timely payment. 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 with J.D. Power, but above Travelers and Farmers. Allstate’s financial stability ratings with Moody’s, A.M. Best, and S&P Global are all in the “A” category, so you can rest assured it’ll be there for you even after a catastrophic weather event, such as a hurricane.
State Farm
Like Allstate, State Farm offer its customers vast online resources. It had the most detailed online quote we found, and will ask questions as minute as the number of corners in your home’s framing. You can be confident that an online quote from State Farm is accurate. You’ll also find an online estimating tool that can give you an idea of the replacement costs for items that have been lost or damaged, and credit and loan calculators. Not to mention, a robust learning section called Simple Insights — it offers tips and tutorials for everything from home security to house shopping to landlord advice.
Consumer Reports gave State Farm (along with Farmers and Travelers) a customer satisfaction score of 82, while J.D. Power gives it a 3/5 for claims and a 4/5 overall, putting it in the middle of the pack for customer service. It also comes in a strong second place (after military-only option, 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 your insurer is solid enough financially to handle a great number of claims at once.
USAA
USAA is the fourth-largest homeowners insurance writer in Alabama, holding almost 8% of the market share. The provider is only offered to active or retired military personnel and their families, and it tops the charts when it comes to financial stability, claims-handling, and customer service. A.M. Best gives it an A++, so you can feel confident USAA will pay out your claims. J.D. Power gives it a near-perfect five stars, and Consumer Reports readers give it a 92/100 for overall customer satisfaction.
Because USAA is only offered for members of the military and their immediate family, we weren’t able to pull a sample quote. But if you qualify, we highly recommend giving USAA a call.
Travelers
Travelers gave us by far the lowest quote of our top picks — less than half of State Farm’s offering. Though the cheap price is tempting, we couldn’t find much information on the website to explain the components of the quote. If price is a priority, Travelers is likely to offer you a great rate. But be sure to check your policy for any items that may be underinsured — a weak policy could cost you more in the long run. In fact, Travelers’ online resources were frustratingly bare in general. You’ll have to pick up the phone for any sure information.
On the plus side, it has good ratings from Consumer Reports (82) and J.D. Power (3/5) — on par with those from Farmers and State Farm. this is a good indication that Travelers can handle claims with ease. But if that claim needs a repair, you may face tougher luck. Travelers earned only a 2/5 from J.D. Power for its ability to handle the repair process. Its low quotes and high customer claims ratings are enough for us to consider recommending it as an option, but you’ll definitely want to dig deeper into the coverage details.
Farmers
Our quote from Farmers Insurance was among the more expensive we received — but that might not be true for you. It offers ample room to save on your premium, including some fairly unique discounts such as a discount if your home is LEED-certified. You’ll also find a unique price break for having energy-efficient systems, a new or renovated home, a new roof, and for having a newer utility system. If you qualify for some of these discounts, your price will likely balance out. If not, you might find a better quote with another provider.
Farmers holds its own when it comes to consumer opinion. It boasts a 3/5 from J.D. Power and an 82 from Consumer Reports — tying with both State Farm and Travelers. It also earned a unanimous “very good” score for its claims experience, which covers everything from the ease of finding an agent to the payout amount. We trust you’ll have a smooth experience with Farmers Insurance and recommend getting a personalized quote.
Alfa
Alfa is a regional insurer active in 11 states (mainly Alabama) with a deep knowledge of the needs of southern homeowners. Alabama faces such a diverse range of climates and natural hazards that an insurer familiar with the state’s nuances is very appealing. We found Alfa’s quotes competitive on price, and its financial stability was on par with our other favorites (an A from A.M. Best.) Because it’s too small to be assessed alongside national companies by Consumer Reports or J.D. Power, we can’t speak as confidently on the customer service experience. But because it is a smaller company, that service is likely to be more attentive and understanding of Alabama’s local quirks.
We found Alfa’s website paled in comparison to the State Farm and Allstate websites — 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) or make a payment. For customers who prefer to keep things digital, consider another insurer. But if you like working with smaller companies and want to take advantage of low premiums, give an Alfa agent a call.
Guide to Homeowners Insurance in Alabama
Relief for Alabama’s Gulf Coast homeowners on hold
Residents in the coastal counties of Baldwin and Mobile have seen their insurance premiums skyrocket in recent years due to 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 by the next Katrina-like storm.
Due to the overwhelming popularity of the SAH grant, the program temporarily suspended applications on Aug. 17, 2017, and is still working through those who submitted prior to the suspension. When we contacted Strengthen Alabama Homes via email, we received an automatic reply that told us program contractors were “working diligently” amid the large amount of applicants to provide grant bids. We suggest keeping an eye on the website, if you’re eligible — 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” — that’s 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. As opposed to tornadoes originating in the Midwest, 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 uncomfortable uncertainty to the lives of residents of this region.
Don’t panic. Alabama homeowners 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 generally 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 (Federal Emergency Management Agency) estimates that a single inch of water in your house can do more than $20,000 worth of damage, and offers a handy map to show you which Alabama counties are most prone to flooding. The organization also has a flood map service center that lets you plug in an address to download a map showing the likelihood of flooding in the area.
Alabama Homeowners Insurance FAQ
How much is homeowners insurance in Alabama?
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. Pull quotes from multiple providers to find the best price for you. We pulled sample quotes from the Alabama Department of Insurance for Montgomery.
Provider
Premium
Allstate
$1,255
State Farm
$2,310
USAA
$1,577
Travelers
$1,030
Farmers
$2,379
Alfa Mutual Group
$2,683
Courtesy of the Alabama Department of Insurance premium data for HO-3 policy, brick construction, $300,000.
In 2012, the Alabama state government passed a law called the Alabama Homeowners Bill of Rights Act. This Act requires agents to place the consumer’s interests first and 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 can rest easy knowing that the state’s bill of rights legislates, among other things, their right to competitive pricing and financial transparency. 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.
