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The Best Cheap Alabama Homeowners Insurance for 2023

Dana George
By: Dana George

Our Insurance Expert

Many or all of the products here are from our partners that compensate us. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.

One of the first things you do after buying a home is shop for homeowners insurance. You want a homeowners insurance policy that won't cost an arm and a leg but will provide you with the coverage you require. We've combed through the best homeowners insurance in Alabama to find the cheapest policies in the state, and have outlined what homeowners should look for when choosing an Alabama home insurance policy.

  • Cheapest overall for Alabama: Farmers
  • Cheapest for new home construction: Farmers
  • Cheapest for older homes: Farmers
  • Cheapest for homeowners who have filed a claim: Farmers

Cheapest overall for Alabama

These companies offer impressively cheap homeowners insurance in Alabama:

  • Farmers, with an average annual rate of $595
  • Allstate, coming in with an average annual rate of $1,429
  • Cincinnati Financial, with an average annual rate of $1,462


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Cheapest for new home construction

Homeowners moving into a new home may be surprised to learn they're going to pay less for insurance coverage. The insurance company does not expect to pay out many claims on a new house and will pass savings onto policyholders in the way of lower insurance premiums. Here are three Alabama home insurance providers offering low rates for newly built homes:

  • Farmers, offering an average annual rate of $342
  • Cincinnati Financial, with an average annual rate of $708
  • Allstate, with an average annual rate of $803

Cheapest for older homes

If you're in love with older homes, you're not alone. However lovely a grand old home may be, though, it is more likely to have the kind of issue not typically found in a new home. Older homes are prone to things like wood rot, mold, and leaky basements. For that reason, insurers tend to charge more for coverage. These three companies offer relatively competitive rates in Alabama:

  • Farmers, with an average annual rate of $627
  • Cincinnati Financial, offering an average annual rate of $1,318
  • Allstate, with an average annual rate of $1,523

Cheapest when you've made a claim

If a home is damaged or destroyed, it's important to have enough coverage to make repairs or to rebuild. However, if you make a claim, your premiums are likely to increase for a time. If that happens in Alabama, these three insurers offer the lowest rates in the state:

  • Farmers, offering a forgiving average annual rate of $550
  • Cincinnati Financial, coming in with an average annual rate of $1,552
  • Allstate, offering an average annual rate of $1,671

Average home insurance cost in Alabama compared to the national average

The average cost of homeowners insurance in Alabama is $2,364, which is about 27% more expensive than the national average of $1,725.

Average Rate Category Alabama National Average
Overall $2,364 $1,725
New home construction $1,289 $943
Older homes $2,218 $1,658
When making a claim $2,547 $1,803
Data source: Quadrant data.

Alabama homeowners insurance overview

Here are a few things that homeowners should be aware of when shopping for Alabama home insurance.

Alabama homeowners pay more for insurance

The average cost of homeowners insurance in the state is $2,364 per year, 27% higher than the national average. Still, it's worth noting the cost of housing in Alabama is the second lowest in the U.S. Depending on income, Alabamans may still be money ahead after paying a bit more for insurance.

Three easy ways to reduce costs

Shop insurers: There are six types of policies specifically designed for non-mobile homes. They range from basic to wide-ranging coverage, and the best homeowners insurance companies offer them all. The trick is to buy the most comprehensive coverage offered at the lowest premium. It may take some shopping around to accomplish, but it can be done.

Seek discounts: Another important money-saving tactic is to take advantage of all possible home insurance discounts. Discounts cover just about everything, from bundling policies to installing an alarm system.

Raise deductible: Finally, if annual premiums put a strain on the budget, raising the policy deductible will lower the premium price.

What are the most common homeowners insurance claims in Alabama?

According to FEMA, the state of Alabama declared 87 major disasters between 1953 and 2019, most of which involved severe storms and hurricanes. To ensure proper coverage, it may help to know the most common Alabama home insurance claims. Here's what they are:

Water damage

Alabama has plenty of sunshine and a fair amount of rain, which helps explain water-related claims, including leaky basements and wood rot. There are also everyday issues, like water damage caused by broken appliances and plumbing issues.

Fire and lightning

In 2019, 25% of all homeowners insurance claims were a result of fire and lightning damage, according to the Insurance Information Institute. Fire does not top the list of homeowners insurance claims, but it is the most expensive issue insurance companies deal with.

Wind damage

Wind damage is another common Alabama claim. Whether it's caused by a hurricane, tornado, or thunderstorm, roofs and other exterior features of a home can take a beating due to wind damage.

Homeowners insurance coverage options and discounts

Discounts like bundling, safe driver, and paying the annual premium upfront are all great, easy ways to save money. However, when it comes time to purchase homeowners insurance, it makes sense to make the most of all potential savings. For example:

An alarm system saves money in more than one way

The best homeowners insurance in Alabama rewards homeowners for installing a security system by offering a premium discount of 15% to 20%. Let's say the annual premium is $1,000. An alarm system can cut that amount by $150 to $200. In addition, an alarm system could lower the risk of a break-in, which in turn, would lower the number of claims.

Roof upgrades dramatically decrease premiums

Roof replacements are one of the more common claims insurers deal with. But upgrading a roof can provide an Alabama homeowner with one of their steepest home insurance discounts. The average discount in the state for homeowners with an upgraded roof is nearly $400, primarily because there is less risk it's going to need to be replaced anytime soon.

Electrical upgrades lead to discounted premiums

Not only can an electrical upgrade help protect a home from fire, but it will also knock an average of $250 off an Alabama homeowner's premiums each year.

5 cheapest cities in Alabama for homeowners insurance

Insurance companies take many factors into account as they determine premiums. They include things like the area crime rate and proximity to a fire station.

Here are the five cheapest cities in Alabama for homeowners insurance:

City Name Average Home Insurance Rate
Meadowbrook $1,629
Pelham $1,634
Helena $1,666
Alabaster $1,718
Hoover $1,729
Data source: Quadrant data.

5 most expensive cities in Alabama for homeowners insurance

Here are the five most expensive cities in Alabama for homeowners insurance:

City Name Average Home Insurance Rate
Orange Beach $4,979
Coden $4,924
Bon Secour $4,826
Bayou La Batre $4,799
Lillian $4,528
Data source: Quadrant data.

The best homeowners insurance in Alabama provides comprehensive coverage at a price the homeowner can afford. Most importantly, the right policy can help a homeowner sleep better at night, knowing there's a plan in place to protect one of their biggest financial investments.

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