Best homeowners insurance in Alabama for 2022

Gianetta Palmer

By 

Gianetta Palmer

Gianetta Palmer

Freelance contributor

Gianetta Palmer is a freelance writer who lives in the Georgia mountains. Her writing on health and car insurance, has appeared on numerous sites.

Updated May 1, 2022

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Just like its neighbor to the west, Alabama is prone to all manner of severe weather events, including tornadoes and hurricanes for more than half of the year, both of which can cause significant damage to homes. 

The average cost of homeowners insurance in Alabama is $172 a month or $2,073 per year. This is around 9% higher than the national average of $1,899.

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However, the cost isn’t the only factor to consider when choosing a home insurance company. Not sure what to look for? Policygenius can help you figure out your coverage needs and compare quotes from multiple top companies in Alabama. 

Best homeowners insurance companies in Alabama

Of the companies we evaluated, USAA has the lowest home insurance rates in Alabama with an average annual policy cost of $1,038 per year — over $1,000 less than the state average. Farmers have the next lowest average rate at $1,312 per year.

Policygenius analyzed thousands of quotes from the 5 largest Alabama insurers to find the average cost of homeowners insurance with each company in 2022. We then looked at 2021 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

Average yearly cost

J.D. Power Rating

State Farm

$1,826

835

Alfa Insurance

$3,631

--

Allstate

$1,349

829

USAA

$1,038

882

Farmers

$1,312

813

State Farm

State Farm logo

There's a reason State Farm is one of the top-rated insurance companies in the U.S. — its customer satisfaction ratings are through the roof, it offers a slew of coverage add-ons for full protection, and makes filing claims through its mobile app a breeze.

Pros

  • Top-tier coverage add-ons, including equipment breakdown, water backup, and service line coverage

  • Get up to $1 million in personal liability coverage

  • Score discounts for bundling, installing security devices, and choosing a high deductible

  • File and track claims online, over the phone, in person, or through its mobile app

  • High customer satisfaction and financial strength ratings

Cons

  • No discounts for first-time homebuyers or going a year without a claim

Why State Farm tops our best list

With a score of 835 out of 1,000, State Farm has one of the highest scores in J.D. Power’s annual home insurance study, which grades insurance companies based on policy price, policy options, claims handling, and more. Customers can file and track claims online, over the phone, or through the mobile app.

How to get a quote

Online through State Farm

Alfa Insurance

Alfa Insurance  logo

Founded over 75 years ago, Alfa Insurance is one of the most popular home insurance companies in the South. We especially love its home systems protection that covers breakdowns of appliances, HVAC systems, and more — ideal for older homes.

Pros

  • Save on premiums by bundling your home and auto insurance, choosing a high-deductible policy, or going years without a claim

  • Offers up to $100,000 in coverage for appliances, hot water heaters, AC units, and other home systems

  • Fewer-than-average customer complaints

  • File claims online or through its mobile app

Cons

  • Fewer discounts compared to other insurance companies

Why Alfa Insurance tops our best list

Alfa Insurance is one of the most popular insurance providers in the south. Customers can save money by bundling their home and auto policies together and choosing a higher deductible. Alfa also offers a unique coverage options, including its home systems protections that covers appliance breakdown due to mechanical or electrical problems.

How to get a quote

Online through Alfa

Allstate

Allstate logo

Allstate's mix of exceptional customer satisfaction ratings, personalized coverage options, and numerous discount opportunities make it one of the most popular homeowners insurance companies on the market.

Pros

  • Several coverage add-ons, including ones for roof surfaces, water backup, green improvements, and mold protection

  • 8+ discounts, including autopay, bundling, zero claims, and new homebuyer

  • Get up to 25% off your premiums when you bundle home and auto insurance

  • Excellent customer service and claims satisfaction ratings

  • File and track claims online or through its mobile app

Cons

  • Rates are typically high compared to competitors

Why Allstate tops our best list

Allstate is one of the highest rated insurance companies in Alabama, scoring an 829 out of 1,000 in J.D. Power’s 2021 home insurance study. Part of Allstate's appeal is how accessible it is to the average homeowner. From numerous resources and tools to help you determine how much coverage you need to its user-friendly mobile and website that you can use to manage your policy and file claims, Allstate is a great option for first-time Alabama homebuyers.

How to get a quote

Online through Policygenius and Allstate

USAA

USAA logo

USAA's robust coverages and high marks for customer service and claims satisfaction make it a solid home insurance option for military members and their families.

Pros

  • Score discounts for zero claims, being a loyal USAA member, opting into e-billing, and more

  • Base policy includes coverages that cost extra with most other companies

  • Offers earthquake coverage — which is hard to come by

  • Get discounted home security systems and a discount on premiums through its partnership with ADT

  • Industry-best customer service and claims satisfaction ratings

Cons

  • Only available to military families

  • Doesn’t offer extended or guaranteed replacement cost dwelling coverage

Why USAA tops our best list

No other home insurance provider stands out better than USAA when it comes to offering coverage tailored for U.S. military members and their families. USAA is known for its comprehensive base policy, which includes coverages that typically cost extra with other insurers. In addition to unbeatable coverage, USAA also scores well in customer and claims satisfaction ratings with J.D. Power.

How to get a quote

Online or by calling USAA

Farmers

Farmers logo

Farmers is one of the largest and most reputable home insurance providers in the industry, offering special discounts for teachers, nurses, first responders, and non-smokers — plus the option to rebuild your home with green materials after a claim.

Pros

  • Several discounts and unique ways to save, including claim forgiveness and declining deductibles

  • 3 flexible coverage packages with varying levels of protection for most coverage and budget needs

  • Offers extended and guaranteed replacement cost coverage options

  • File claims online, via text, on its mobile app, or by calling its claims center

Cons

  • Rates are typically more expensive

  • Below-average customer satisfaction ratings

  • No repair network to help you find a certified contractor or repair professional after filing a claim

Why Farmers tops our best list

Farmers offer 3 flexible coverage packages for most coverage and budget needs. Additionally, Farmers is known for its plethora of policy perks, including declining deductibles and claims forgiveness, which rewards you for being a loyal Farmers customer or going a certain number of years without filing a claim.

How to get a quote

Online through Farmers

Cheapest homeowners insurance companies by city in Alabama

Looking at average home insurance costs for the 15 most popular insurers in Alabama, we found that the cheapest homeowners insurance companies in the state are Allstate, Nationwide, and USAA.

The average Allstate rate in Mobile is $937 per year, which is a particularly good rate because of its location near the Gulf Coast, where tropical storms are common. Meanwhile, residents in the state capital of Birmingham enjoy average rates of $1,074 per year with USAA.

City

Company

Average yearly cost

Abbeville

Nationwide

$936

Abernant

USAA

$979

Adamsville

USAA

$951

Adger

Allstate

$981

Akron

Allstate

$981

Alabaster

Farmers

$772

Albertville

USAA

$1,043

Alexander City

Nationwide

$901

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Shopping for homeowners insurance in Alabama

Shopping for home insurance in Alabama is a good idea to ensure you and your family are protected when severe weather strikes. By partnering with Policygenius, you can be sure you'll find the right coverage at a competitive price.

In this section, we break down the average annual home insurance rates in Alabama for different coverage and deductible levels, as well as the cheapest and most expensive home insurance companies for dog and pool owners and those with bad credit.

Alabama home insurance costs by coverage amounts

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 around $1,600 less to insure than a house with $500,000 in coverage.

Dwelling coverage amount

Average yearly cost

$100,000

$1,061

$200,000

$1,566

$300,000

$2,063

$400,000

$2,575

$500,000

$3,150

Personal liability coverage is the part of your home insurance policy that pays for medical, legal, and repair bills if you're legally responsible for an injury or property damage.

Liability coverage amount

Average yearly cost

$100,000

$2,152

$200,000

$2,263

$300,000

$2,063

$400,000

$1,246

$500,000

$2,155

Alabama home insurance costs by deductible amount

Your deductible is the amount you're responsible for paying on each covered claim before your insurance kicks in.

A higher deductible means lower monthly payments, but more out-of-pocket expenses when you file a claim. Since Alabama sees a lot of damage from tornadoes and severe weather, be careful not to set your deductible at an amount you can't afford in the event of a major loss.

As you can see in the table below, Alabama residents can save around $375 per year on home insurance by choosing a $2,000 deductible over the $500 option.

Deductible amount

Average yearly cost

$500

$2,345

$1,000

$2,063

$2,000

$1,974

Home insurance discounts in Alabama

Many insurance providers offer discounts to homeowners if their homes have certain features like deadbolt locks, smoke detectors, or home security systems

Discount

Average yearly cost

Dead bolt

$2,062

Smoke alarm

$2,042

Burglar alarm

$1,887

Home insurance companies in Alabama for dog owners

If you purchase a dog that your insurance provider considers to be a “dangerous breed," you may see higher home insurance rates. Some companies charge higher rates for certain breeds and may even deny you coverage altogether because of the higher probability of attacks and liability claims. 

With an average rate of $1,038 per year, USAA has the cheapest home insurance rates in Alabama for a home with a dangerous dog breed, while Alfa's rate of $3,631 is the highest.

Company

Average yearly cost

USAA

$1,038

Farmers

$1,312

Allstate

$1,349

State Farm

$1,826

Alfa Insurance

$3,631

Home insurance companies in Alabama for poor credit

Late and missed payments on your rent, car payment, and credit cards not only mess with your credit, but it also leads 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, and will often charge higher rates to customers with low scores.

With an average rate of $1,443 per year, USAA has the cheapest home insurance rates in Alabama for a homeowner with poor credit. Meanwhile, Alfa's yearly rate of $5,957 is the highest.

Company

Average yearly cost

USAA

$1,443

Allstate

$2,348

Farmers

$2,900

State Farm

$3,134

Alfa Insurance

$5,957

Home insurance companies in Alabama for pool owners

Home insurance rates are often higher for if you have a swimming pool because of the risk of injuries and higher probability of liability claims.

With an average rate of $1,038 per year, USAA has the cheapest home insurance rates for Alabama homes that have a swimming pool, while Alfa has the most expensive rates at $3,631 per year.

Company

Average yearly cost

USAA

$1,038

Farmers

$1,312

Allstate

$1,349

State Farm

$1,826

Alfa Insurance

$3,631

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.

  1. 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. 

  2. Ask if you should purchase flood insurance or more hurricane coverage. 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.

  3. 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.

  4. 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.

  5. Sign the policy, 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.

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Frequently asked questions

What is the average home insurance policy cost in Alabama?

The average home insurance policy cost in Alabama is $172 a month or $2,063 per year. That’s nearly on par with the national average of $1,899 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.

Methodology

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.