We found that the average cost of homeowners insurance in Alabama is $162 a month or $1,940 per year for $300,000 in dwelling coverage.
However, don't be surprised to see your home insurance rates go up this year due to an increase in extreme weather in Alabama that's brought with it damaging tornadoes, large hail, severe winds, and flooding. As of April 2023, Alabama has already seen 64 tornadoes damage homes across the state — the highest of any other U.S. state so far this year. [1]
Worse, some insurers are pulling out of high-risk coastal communities in Mobile and Baldwin counties in Alabama completely due to the risk of expensive claims. [2]
If you're struggling to purchase home insurance through one of the top companies featured in our guide, you might want to look into coverage through the Alabama Insurance Underwriting Association (AIUA) — your state's FAIR Plan designed as a last-resort option for homeowners struggling to find coverage on the private market.
Compare the best homeowners insurance companies in Alabama
Of the companies we evaluated, Auto-Owners Insurance is the best home insurance company in Alabama, along with State Farm, Farmers, Nationwide, and Allstate.
Policygenius analyzed thousands of quotes from across Alabama to find the average cost of homeowners insurance with each company. We then looked at J.D. Power customer satisfaction scores and compared that with the coverage needs of Alabama residents to find the best homeowners insurance in Alabama.
Company | Best for... | Average monthly cost | Policygenius rating |
|---|---|---|---|
Overall | $203 | 5.0 out of 5 | |
Customer service | $152 | 4.8 out of 5 | |
Coverage options | $109 | 4.5 out of 5 | |
Cheap rates | $91 | 4.5 out of 5 | |
Short-term rental owners | $112 | 4.4 out of 5 |
Methodology & why you can trust our rates
Policygenius has analyzed home insurance rates provided by Quadrant Information Services in March 2022 for ZIP codes in all 50 states plus Washington, D.C., for a 40-year-old female homeowner with no claim history, good credit, a $1,000 deductible, and the following coverage limits:
Dwelling: $300,000
Other structures: $30,000
Personal property: $150,000
Loss of use: $60,000
Liability: $300,000
Medical: $1,000
All rates based on the above coverage limits except where otherwise noted.
Some carriers may be represented by affiliates or subsidiaries. Rates provided are a sample of costs. Your actual quotes may differ.
Best overall homeowners insurance: Auto-Owners
2024 Policygenius award winner
Auto-Owners Insurance
5.0
Bundle home & auto
Offers extended replacement cost
Offers flood insurance
Why we chose it
Auto-Owners Insurance is the best homeowners insurance company in Alabama thanks to its extensive policy and coverage options, its high marks for financial strength, and its customer experience ratings.
Pros and cons
Pros
Offers a slew of extra coverage add-ons
Lots of discounts available
Flood insurance available through the NFIP
Cons
Not able to get quotes or file claims online
More details
Why Auto-Owners Insurance is our pick for best overall company
Auto-Owners Insurance is our pick for the best overall home insurance company in Alabama. Auto-Owners scored at least a 4 out of 5 for customer experience, coverage options, and financial strength, which earned it a perfect 5 out of 5 Policygenius rating.
With endorsements like guaranteed replacement cost coverage, water backup protection, inland flood coverage, and a comprehensive Homeowners Plus endorsement package, Auto-Owners offers excellent value for the coverage you're getting.
Finally, although Auto-Owners' rates are more expensive than average in Alabama, the company offers a range of discounts that can help lower your insurance rates.
How much does Auto-Owners home insurance cost in Alabama?
The average cost of Auto-Owners home insurance in Alabama is $2,434 per year, according to sample quotes provided to us by Quadrant Information Services. This makes Auto-Owners Insurance about 25% more expensive than the statewide average.
Best home insurance for customer service: State Farm
2024 Policygenius award winner
State Farm
4.8
Bundle home & auto
Offers extended replacement cost
Offers flood insurance
Offers earthquake insurance
Wind/hail deductible
Offers wildfire insurance
Why we chose it
State Farm is one of the best home insurance companies in Alabama thanks to its high customer service marks, large selection of policy options for most home types, and industry-best financial stability ratings.
Pros and cons
Pros
High customer satisfaction and financial strength ratings
Top-tier coverage add-ons, including extended replacement cost coverage
Offers large discounts when you bundle your home and auto insurance
Cons
20% more complaints filed with the NAIC than other companies of its size
No discounts for first-time homebuyers
More details
Why we chose State Farm
State Farm is the best home insurance company in Alabama for those who want top-rated customer service. The company has received high ratings from policyholders according to J.D. Power’s 2022 customer satisfaction, claims, and digital experience surveys.
Plus, while many companies don't have the financial strength to pay out claims after several natural disasters in the same year, State Farm isn't one of them. It earns the highest rating possible from A.M. Best for financial strength and stability — only six insurance companies out of nearly 70 we reviewed hold this title.
State Farm doesn't offer the same number of discounts as other companies, but State Farm's rates are already cheaper in Alabama than average.
How do State Farm home insurance rates compare to the Alabama average?
The average cost of State Farm home insurance in Alabama is $1,826 per year, which is 6% higher than the average annual premium in the state.
How to get a quote
Online through State Farm or by contacting your local State Farm agent.
Best home insurance for coverage options: Farmers
2024 Policygenius award winner
Farmers
4.5
Offers extended replacement cost
Bundle home & auto
Smart home discounts
Why we chose it
Farmers is one of the best home insurance companies in Alabama for its range of coverage add-ons, discounts, high claims satisfaction scores, and exceptionally cheap rates.
Pros and cons
Pros
Optional extended or guaranteed replacement cost dwelling coverage
Receives few complaints from policyholders
Much cheaper than average in Alabama
Cons
Below-average scores on J.D. Power’s overall customer satisfaction and digital experience surveys
More details
Why we chose Farmers
Farmers is our top pick for homeowners in Alabama who want complete coverage. With Farmers, you can customize your policy with lots of coverage options, including guaranteed or extended replacement cost coverage, water backup protection, and a personal articles floater.
Farmers also earned a high score in J.D. Power’s 2022 claims satisfaction study (though it was below-average on J.D. Power’s overall customer satisfaction and digital experience surveys). Plus, Farmers receives fewer complaints than average, according to the National Association of Insurance Commissioners.
Finally, home insurance from Farmers costs much less than average in Alabama. If you qualify for any of the dozen discounts that Farmers offers, your rates could be even lower.
How do Farmers home insurance rates compare to the average in Alabama?
The average cost of Farmers home insurance in Alabama is $1,312 per year, which is about one third of the average cost of home insurance in the state.
How to get a quote
Online through Farmers
Best home insurance for cheap rates: Nationwide
2024 Policygenius award winner
Nationwide
4.5
Bundle home & auto
Mobile app
New homebuyer discount
Offers extended replacement cost
Why we chose it
Nationwide is the best homeowners insurance company in Alabama for those who want affordable coverage. It also received high marks for claims satisfaction with J.D. Power, so you can rely on Nationwide when it matters most.
Pros and cons
Pros
Cheapest rates in Alabama
Multiple high-quality coverage options
Highly rated for claims satisfaction by J.D. Power
Cons
Below-average customer satisfaction and digital experience ratings
More details
Why we chose Nationwide
We found that Nationwide is the cheapest homeowners insurance company in Alabama. On average, homeowners insurance from Nationwide costs just $1,096 per year — almost half the statewide average.
Besides cheap rates, Nationwide offers a large selection of coverage options, like guaranteed and extended replacement cost coverage, better roof replacement, new belongings coverage, water backup protection, and equipment breakdown coverage.
Nationwide has also received high ratings from J.D. Power for claims satisfaction, and it ranks fifth on J.D. Power's Property Claims Satisfaction Study from 2022. The company also receives far fewer complaints than other insurers, according to the National Association of Insurance Commissioners.
How do Nationwide home insurance rates compare to the Alabama average?
The average cost of Nationwide home insurance in Alabama is $1,096 per year, which is around 44% cheaper than the annual statewide average of $1,940.
How to get a quote
Online through Policygenius or Nationwide
Best home insurance for short-term rental owners: Allstate
2024 Policygenius award winner
Allstate
4.5
Bundle home & auto
Smart home discounts
Why we chose it
Airbnb hosts in Alabama may like Allstate thanks to HostAdvantage — its affordable short-term rental coverage that can be easily added to any policy. Whether you’re looking for basic or comprehensive home insurance coverage, Allstate is a standout option.
Pros and cons
Pros
Offers HostAdvantage for short-term rental coverage
Cheaper-than-average rates
Offers water backup protection, other endorsements
Cons
Beginning to pull back coverage in high-risk areas
Customer experience scores with J.D. Power are below the segment average
More details
Why we chose Allstate
If you're looking to cover your short-term rental, Allstate's HostAdvantage makes it our top pick for homeowners insurance in Alabama. HostAdvantage comes with theft protection, coverage for your damaged property ($10,000 per host period), and a $25 discount on cleaning services from Merry Maids.
We also like Allstate's lower-than-average premiums and its high customer satisfaction ratings. A few of Allstate's discounts will be easy for many people to qualify for, too, like discounts for setting up automatic payments, bundling policies, and signing up for coverage before your current policy expires.
How do Allstate home insurance rates compare to the Alabama average?
The annual average cost of Allstate home insurance in Alabama is $1,349 per year, 30% cheaper than the statewide average of $1,940 per year.
How to get a quote
Online through Policygenius or Allstate, or by contacting a local Allstate agent.
How much is homeowners insurance in Alabama?
The average cost of homeowners insurance in Alabama is $1,940 per year, or $162 a month, for an insurance policy with $300,000 in dwelling coverage. This means insurance in Alabama is just slightly higher than the national average cost of $1,754 per year.
Alabama homeowners insurance rates by city
The cost of homeowners insurance and the company with the cheapest rates in Alabama depends on where you live. Among the most populated cities in Alabama, we found that Florence is the most expensive and Alabaster is the cheapest.
Here’s a look at the average cost of home insurance in the 20 largest cities in Alabama.
City | Average monthly cost | Average annual cost | Difference from state average (%) |
|---|---|---|---|
Huntsville | $148 | $1,771 | -9% |
Montgomery | $137 | $1,641 | -15% |
Birmingham | $156 | $1,867 | -4% |
Mobile | $141 | $1,696 | -13% |
Tuscaloosa | $144 | $1,731 | -11% |
Hoover | $122 | $1,462 | -25% |
Auburn | $134 | $1,604 | -17% |
Dothan | $165 | $1,975 | 2% |
Madison | $138 | $1,659 | -14% |
Decatur | $153 | $1,839 | -5% |
Florence | $168 | $2,010 | 4% |
Prattville | $141 | $1,693 | -13% |
Vestavia Hills | $126 | $1,511 | -22% |
Phenix City | $157 | $1,886 | -3% |
Alabaster | $122 | $1,461 | -25% |
Gadsden | $167 | $2,002 | 3% |
Opelika | $138 | $1,655 | -15% |
Northport | $140 | $1,681 | -13% |
Enterprise | $166 | $1,992 | 3% |
Daphne | $137 | $1,641 | -15% |
Alabama homeowners insurance rates by coverage amount
Dwelling coverage is the part of your home insurance policy that pays to rebuild or repair your home after a covered loss. Your dwelling coverage should be equal to your home’s replacement cost, not its current market value or purchase price.
An Alabama home with $200,000 in dwelling coverage costs nearly $1,500 less to insure than a house with $500,000 in coverage.
Dwelling coverage limit | Average annual cost |
|---|---|
$100,000 | $1,009 |
$200,000 | $1,492 |
$300,000 | $1,940 |
$400,000 | $2,403 |
$500,000 | $2,934 |
Cheapest homeowners insurance companies in Alabama
Based on our analysis, USAA, Nationwide, Farmers, Allstate, and Cincinnati Insurance are the cheapest home insurance companies in Alabama, with average statewide premiums ranging from $1,038 to $1,390 per year.
Company | Average annual cost |
|---|---|
$1,038 | |
$1,096 | |
$1,312 | |
$1,349 | |
$1,390 | |
$1,826 | |
$2,434 | |
Centauri Insurance | $2,519 |
$2,522 | |
$3,083 | |
$3,147 |
Cheapest Alabama homeowners insurance if you have poor credit
Late and missed payments on your car loan and credit cards not only mess with your credit, but can also lead to higher insurance rates with some companies.
Insurance companies consider a poor credit score to be an indicator of risky behavior and more frequent home insurance claims. This leads to higher rates for customers with low scores.
With an average cost of $1,443 per year, USAA has the cheapest home insurance in Alabama for homeowners with poor credit.
Company | Average annual cost |
|---|---|
USAA | $1,443 |
Nationwide | $1,696 |
Cincinnati Insurance | $2,161 |
Allstate | $2,348 |
Farmers | $2,900 |
State Farm | $3,134 |
Country Financial | $3,553 |
Centauri Insurance | $3,692 |
Foremost | $4,397 |
Alfa Insurance | $5,957 |
Auto-Owners Insurance | $23,562 |
Cheapest Alabama homeowners insurance if you have an older home
It costs more to insure older homes than newer homes because they're more likely to be damaged or constructed with difficult-to-replace, expensive materials. Also, certain parts of older homes, like the roof or plumbing systems, may not be up to code.
We found that Nationwide has the cheapest average insurance rates in Alabama for a 50-year-old home, while Alfa is the most expensive.
Company | Average annual cost |
|---|---|
Nationwide | $1,129 |
USAA | $1,152 |
Allstate | $1,321 |
Farmers | $1,363 |
Cincinnati Insurance | $1,405 |
State Farm | $1,748 |
Auto-Owners Insurance | $2,367 |
Foremost | $2,557 |
Centauri Insurance | $2,802 |
Country Financial | $3,186 |
Alfa Insurance | $3,636 |
Cheapest Alabama homeowners insurance if you have a history of claims
Your claims history is one of the biggest factors insurers consider when determining home insurance premiums. If you have filed more than one claim in the last five years, your rates will be higher than someone without any claims on their record.
The cheapest home insurance company in Alabama for someone with multiple claims is Farmers.
Company | Average annual cost |
|---|---|
Farmers | $1,824 |
USAA | $1,883 |
State Farm | $2,038 |
Nationwide | $2,132 |
Cincinnati Insurance | $2,348 |
Auto-Owners Insurance | $2,434 |
Allstate | $2,618 |
Centauri Insurance | $2,637 |
Country Financial | $5,704 |
Alfa Insurance | $8,127 |
Foremost | $10,407 |
Coverage options in Alabama
When buying homeowners insurance in Alabama, you should be aware of what your policy does and doesn’t cover. There are a few additional types of insurance you may need to consider getting to protect against the state’s windstorms and flooding.
Windstorm insurance
From 2010 to 2022 there were 833 tornadoes in Alabama. [3] As a coastal state, Alabama can also be affected by hurricanes. Although homeowners insurance usually covers wind, hurricane, and tornado damage, it gets more complicated in states like Alabama where there are many windstorms.
Home insurance companies in Alabama may charge a separate deductible after a windstorm damages your home — or may exclude coverage entirely. In this case, you would need to get a separate windstorm policy or find a company that covers wind damage.
Flood insurance
Homeowners insurance policies don’t cover flood damage. If you live in a low-lying part of Alabama or in a coastal city near the Gulf of Mexico, you should consider flood insurance in addition to your regular home insurance.
In addition to comparing home insurance quotes, homeowners in Alabama can also compare private flood insurance rates with Policygenius, or choose a policy through a government entity like the National Flood Insurance Program.
How to buy homeowners insurance in Alabama
With its location in between Dixie Alley and the Gulf Coast, Alabama homeowners need to have adequate home insurance to properly safeguard their property.
We've rounded up tips in the section below to help you find the best home insurance coverage at the best price.
Reach out to a licensed Policygenius agent. Our team of home insurance experts will help you find the right coverage for your house at a price that suits your budget needs.
Ask if you should purchase flood insurance or more hurricane coverage. With hurricane season in Alabama spanning from June through November, coastal Alabama homeowners may want to consider purchasing flood insurance or adding dwelling enhancements to their home insurance like extended or guaranteed replacement cost coverage.
Do you need a $1,000 or $2,000 deductible? A higher deductible means you’ll pay less upfront for your home insurance, but more out of pocket when it's time to file a claim. A Policygenius agent can help you pick out a deductible that works within your budget.
Compare quotes from a Policygenius agent. Once you’ve identified your coverage needs and you input a few details about your house, a Policygenius agent will send over quotes from multiple companies for you to compare.
Sign and pay your first premium. After you’ve settled on a home insurance policy that works for you and your house, all that's left for you to do is sign on the dotted line and pay your first premium. Policygenius will take it from there.
Frequently asked questions
What is the average home insurance policy cost in Alabama?
The average home insurance policy cost in Alabama is $162 a month or $1,940 per year. That’s on par with the national average of $1,754 per year.
Is it mandatory to have home insurance in Alabama?
While it’s not legally required to have home insurance in Alabama, many mortgage lenders require you to purchase home insurance before extending a home loan. Lenders have a financial interest in your property until you pay off the note, so they want to ensure it’s fully protected.
How can I lower the cost of my home insurance in Alabama?
The quickest way to lower the cost of your home insurance is by comparing quotes with Policygenius. Once you’ve reviewed your options, ask about any discounts available to you, and select the policy that works best for you.
Why does my credit score affect my home insurance rates?
Your credit score says a lot about you including if you pay your bills on time and how much credit you’ve been extended. To insurance companies, it also establishes whether you’re high or low risk because poor credit is often an indicator that you’re more likely to file an insurance claim for small damages or losses.
When is tornado season in Alabama?
Tornado season in Alabama falls during two different times of the year: A spring season in March, April, and May and a fall season in November and December.
