Allstate has the cheapest homeowners insurance in Alabama, with rates averaging $134 a month, while USAA and Country Financial offer the next-lowest prices. Cost is always important, but there are other factors to consider when purchasing home insurance. Here’s our guide to the best homeowners insurance companies in Alabama.
In this article
What is the average cost of home insurance in Alabama?
The average cost of homeowners insurance in Alabama is $2,051 a year, or $171 a month, which is 16th highest in the nation. Among neighboring states, only Georgia has a lower rate, $156 a month. Average home insurance premiums are $243 a month in Mississippi, $201 in Florida and $173 in Tennessee.
Since homeowners insurance can be expensive, it’s important to compare quotes from multiple companies when you purchase or renew your policy. Each company uses a slightly different formula to determine your premiums and offers different discounts. Depending on your situation, you may qualify for a much better rate with one company than you do with others.
Who offers the cheapest home insurance in Alabama?
Our analysis of homeowners insurance quotes for a typical home shows that Allstate offers the cheapest home insurance in Alabama, with rates averaging $1,611 a year, or $134 a month.
The next-best rates are available from USAA, $139 a month, and Country Financial, also $139 a month. USAA is only available to current and former members of the military and their families.
| Company | Annual | Monthly |
|---|---|---|
| Allstate | $1,611 | $134 |
| USAA | $1,667 | $139 |
| Country Financial | $1,674 | $139 |
| Farmers | $1,954 | $163 |
| State average | $2,051 | $171 |
| State Farm | $2,120 | $177 |
| Cincinnati Insurance | $2,187 | $182 |
| Alfa Mutual | $2,553 | $213 |
| Nationwide | $2,638 | $220 |
| Note: Average rates are based on non-binding estimates provided by Quadrant Information Services. Your rates may vary. | ||
Find cheap home insurance from top Alabama companies
Best home insurance companies in Alabama
The best homeowners insurance companies in Alabama combine low prices with responsive customer service. Everyone wants a low rate. However, if you ever have to file a claim, you need your insurance company to fulfill its financial obligations to you in a prompt, convenient manner.
Best customer service
Among the companies in our analysis, USAA and State Farm have the best overall satisfaction scores from J.D. Power, while Alfa Mutual and Cincinnati Insurance have the best complaint ratings with the National Association of Insurance Commissioners (NAIC).
J.D. Power measures overall satisfaction through customer surveys rating insurance companies on interaction, policy offerings, price, billing process, policy information and claims.
On a 1,000-point scale, USAA has an industry-leading score of 882. State Farm has the next-highest score, 835, followed by Country Financial, 830, and Allstate, 829. All four beat the segment average of 825.
| Company | Satisfaction index ranking |
|---|---|
| USAA | 882 |
| State Farm | 835 |
| Country Financial | 830 |
| Allstate | 829 |
| Segment average | 825 |
| Farmers | 813 |
| Nationwide | 812 |
| Alfa Mutual | Not included |
| Cincinnati Insurance | Not included |
| Source: J.D. Power 2021 U.S. Home Insurance Study | |
The NAIC Complaint Index compares insurance companies by confirmed complaints in relation to market share. A confirmed complaint is one that leads to a finding of fault by the insurance commissioner in the state in which it is filed.
The National Complaint Index is 1.0. A company with a 2.0 Complaint Index has twice as many confirmed complaints as expected for its size, while one with a 0.5 Complaint Index has half as many. A lower Complaint Index reflects better performance.
Alabama-based Alfa Mutual has the lowest possible Complaint Index, 0. The next lowest are Cincinnati Insurance, 0.26, Country Financial, 0.29, and USAA, 0.42.
| Company | NAIC Complaint Index |
|---|---|
| Alfa Mutual | 0 |
| Cincinnati Insurance | 0.26 |
| Country Financial | 0.29 |
| USAA | 0.42 |
| Nationwide | 0.45 |
| Farmers | 0.55 |
| National Complaint Index | 1.0 |
| State Farm | 1.01 |
| Allstate | 1.11 |
| Source: National Association of Insurance Commissioners, 2021 data | |
Best overall: Country Financial
Strong customer service metrics, competitive rates and flexible coverage options help make Country Financial the best overall home insurance company in Alabama. Country Financial’s average statewide rate is slightly higher than Allstate's, but Country Financial’s low Complaint Index reflects its effectiveness in meeting customer expectations.
Country Financial offers three policy tiers. This lets you choose a package that best meets your needs and budget. The company also offers a selection of endorsements that enable you to further customize your coverage.
Best for military: USAA
USAA’s low rates and strong customer service metrics demonstrate its ability to deliver on its promises to the military community. Even though its prices are low, USAA maintains high standards for customer service, as shown by its high overall satisfaction score and low Complaint Index.
Home insurance rates in Alabama's largest cities
Among Alabama’s largest cities by population, average home insurance rates range from $141 a month in Montgomery to $199 a month in Mobile. Southern Alabama’s exposure to extreme coastal weather is one of the main reasons why homeowners insurance costs more in and around Mobile than it does in inland areas.
| City | Annual | Monthly |
|---|---|---|
| Birmingham | $1,900 | $158 |
| Huntsville | $1,867 | $156 |
| Mobile | $2,394 | $199 |
| Montgomery | $1,696 | $141 |
| Tuscaloosa | $1,751 | $146 |
| Note: Average rates are based on non-binding estimates provided by Quadrant Information Services. Your rates may vary. | ||
Who offers the cheapest home insurance in Alabama's largest cities?
Allstate has the lowest average rates in Birmingham, Huntsville and Tuscaloosa, while Farmers offers the lowest rates in Montgomery, and Country Financial is cheapest in Mobile.
In general, an insurance company’s rate in a particular region reflects its costs of doing business in that area. Companies tend to charge more in areas susceptible to extreme weather and/or areas with high crime rates than they do in areas where claims are less frequent and costly.
Since the costs of operating in different parts of a state vary by company, it’s common to see different price leaders in different cities. Here’s how home insurance prices stack up in Alabama’s five largest cities.
| Company | Annual | Monthly |
|---|---|---|
| Allstate | $1,596 | $133 |
| Cincinnati Insurance | $1,662 | $138 |
| USAA | $1,774 | $148 |
| City average | $1,900 | $158 |
| Note: Average rates are based on non-binding estimates provided by Quadrant Information Services. Your rates may vary. | ||
| Company | Annual | Monthly |
|---|---|---|
| Allstate | $1,476 | $123 |
| Cincinnati Insurance | $1,621 | $135 |
| Country Financial | $1,622 | $135 |
| City average | $1,867 | $156 |
| Note: Average rates are based on non-binding estimates provided by Quadrant Information Services. Your rates may vary. | ||
| Company | Annual | Monthly |
|---|---|---|
| Farmers | $1,405 | $117 |
| USAA | $1,505 | $125 |
| Allstate | $1,508 | $126 |
| City average | $1,696 | $141 |
| Note: Average rates are based on non-binding estimates provided by Quadrant Information Services. Your rates may vary. | ||
| Company | Annual | Monthly |
|---|---|---|
| Country Financial | $1,148 | $96 |
| Allstate | $1,273 | $106 |
| State Farm | $1,344 | $112 |
| City average | $2,394 | $199 |
| Note: Average rates are based on non-binding estimates provided by Quadrant Information Services. Your rates may vary. | ||
| Company | Annual | Monthly |
|---|---|---|
| Allstate | $1,334 | $111 |
| USAA | $1,462 | $122 |
| Country Financial | $1,485 | $124 |
| City average | $1,751 | $146 |
| Note: Average rates are based on non-binding estimates provided by Quadrant Information Services. Your rates may vary. | ||
Homeowners insurance requirements in Alabama
There is no legal mandate to purchase homeowners insurance in Alabama, but if you have a mortgage, your lender will require it. If you have a mortgage on a home in a federally designated high-risk flood zone, your lender is likely to also require flood insurance.
If you’re new to Alabama or homeowners insurance, you should know that thunderstorms and tornadoes are widespread risks across the state. The southernmost parts of the state are exposed to extreme coastal weather, including hurricanes and tropical storms. Parts of Alabama experience sinkholes, and earthquakes can also occur.
Here’s how homeowners insurance protects against these threats.
Alabama flood insurance
Homeowners insurance excludes damage from floods, including storm surges, but you can buy separate flood insurance for financial protection against this specific peril.
Most flood insurance is purchased through the government-backed National Flood Insurance Program (NFIP), which is managed by the Federal Emergency Management Agency (FEMA), but private companies also offer it.
The average cost of NFIP flood insurance in Alabama is $743 a year, or $62 a month. Private flood insurance rates vary by company.
You can find your home’s flood risk, or the flood risk of a home you want to purchase, in the Flood Map Service Center on FEMA’s website. If you don’t have a mortgage or live outside a high-risk flood zone, you can usually still purchase flood insurance on an optional basis.
Extreme winds
Alabama’s exposure to extreme tornadoes, hurricanes and tropical storms has created a complicated and potentially confusing situation for insurance customers.
In areas of Mobile and Baldwin counties closest to the coast, insurance companies often exclude wind and hail damage. In these areas, you need to purchase wind-and-hail insurance separately for protection.
In the rest of the state, standard homeowners insurance usually does cover wind and hail, including tornadoes.
Insurance policies throughout Alabama often also come with a higher deductible for hurricanes or named storms than for other perils. Your deductible is the amount you pay for repairs to covered damage before insurance funds kick in.
Most standard deductibles are offered in dollar amounts, such as $1,000. Hurricane deductibles are usually offered as a percentage of your home’s insured value. For example, if your home is insured at $275,000 and you have a 5% hurricane deductible, you are responsible for the first $13,750 in repair costs.
If you’re not sure how a policy you are considering covers wind damage, here’s what you should ask as you review quotes:
- Does this proposed policy exclude wind damage?
- If it does exclude wind damage, how much does wind-and-hail coverage cost?
- Does this proposal have a separate deductible for hurricanes or named storms?
You’ll get a lower rate on home insurance by choosing higher deductibles, but doing so will increase your potential out-of-pocket costs if you ever have to file a claim.
Sinkholes and earthquakes
Homeowners insurance typically excludes coverage for earth movements such as sinkholes and earthquakes, but you can buy separate coverage for each.
Some companies offer sinkhole and/or earthquake coverage as optional add-ons to your regular homeowners insurance. However, separate insurance is also available for each of these perils.
Compare rates on Alabama home insurance
Frequently asked questions about Alabama home insurance
How much is homeowners insurance in Alabama?
On average, homeowners insurance in Alabama costs $2,051 a year, or $171 a month. This is 17% higher than the average national rate of $146 a month.
Who has the best homeowners insurance rates in Alabama?
Allstate has the best average statewide rate for homeowners insurance in Alabama, $134 a month. Allstate offers the lowest average rates in Birmingham, Huntsville and Tuscaloosa. Farmers has the best average rate in Montgomery, and Country Financial offers the lowest average rate in Mobile.
Does Alabama use credit for homeowners insurance?
Homeowners insurance companies in Alabama are allowed to use your credit-based insurance score to help determine your eligibility and rate. A credit-based insurance score is different from your normal credit score and is used to predict how likely you are to file a claim.
Methodology
We obtained quotes for a standard HO-3 homeowners insurance policy for a typical home in every ZIP code in Alabama. Unless otherwise noted, standard policies included the following limits and deductibles.
- Dwelling coverage: $275,000
- Other structures: $27,500
- Personal property: $137,500
- Loss of use: $55,000
- Liability: $100,000
- Medical payments: $5,000
- Deductible: $1,000
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