Home insurance in Alabama costs about $379 monthly or $4,547 annually on average. Residents pay $160 more per month, or $1,912 more annually, than the national average, making it the sixth most expensive state for home insurance.
Average Home Insurance Cost in Alabama
Updated: May 30, 2025
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Rates updated:
Jun 06, 2025
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Key Takeaways
Depending on your financial history, home details and other personal information, home insurance costs in Alabama can range from $2,597 to $57,055.
Alabama's home insurance premiums are the sixth most expensive in the country, at 73% above the national average.
To find the best home insurance in Alabama, determine what coverage you need beforehand, research costs and discounts in your area, and shop around.
How Much Is Home Insurance in Alabama?
| Alabama Average | $379 | $4,547 | 73% |
| National Average | $220 | $2,635 | 0% |
*These rates represent a home built in 2000 out of frame with $250K Dwelling, $125K Personal Property and $200K Liability coverage with a $1,000 deductible.
Average Home Insurance Cost by City
Depending on your city, various risk factors (including your property’s age, weather-related factors and home valuations) differ significantly, affecting home insurance costs. For example, the average monthly home insurance cost in Birmingham is around $347; in Mobile, it’s much higher at $535.
| Birmingham | $347 | $4,160 |
| Huntsville | $327 | $3,923 |
| Mobile | $535 | $6,425 |
| Montgomery | $307 | $3,690 |
*These rates represent a home built in 2000 out of frame with $250K Dwelling, $125K Personal Property and $200K Liability coverage with a $1,000 deductible.
Why Is Home Insurance So Expensive in Alabama?
Home insurance is expensive in Alabama mainly because of the increasing number of claims, the high risk of severe weather and natural disasters, rising material and labor costs, and state insurance laws. Below, we explain each factor in detail:
Rising Claims
Alabama homeowners make more claims than the average. The Insurance Information Institute reports that in 2023, the state recorded the one of the lowest total incurred insurance losses (claim value) in the country, at 7.93 billion dollars, which may lead insurance providers to lower rates.
High Weather Risks
Due to Alabama's location along the Gulf Coast and in the heart of Tornado Alley, the likelihood of expensive claims is significantly higher. In 2024, weather-related risks were dominated by severe thunderstorms, tornadoes, and hurricane activity from the Gulf of Mexico, with coastal counties particularly vulnerable to storm surge and wind damage from tropical systems.
Rising Material and Labor Costs
Construction costs accounted for a record 64% of new home prices in 2024, up from around 61% in 2022, according to the National Association of Home Builders' (NAHB) latest survey. Since 2020, wages for construction workers have risen by 35%, raising the cost of damages. These factors contribute to higher claims costs for insurers.
State Insurance Laws
Alabama operates under a file and use system, allowing insurers to notify state departments and raise insurance rates without full approval from the Alabama Department of Insurance.
Home insurance is required if you're getting a mortgage, and although many in Alabama can afford homes, some homeowners are priced out of the market or choose minimal coverage. This creates a smaller pool of premium-paying policyholders, increasing the risk for insurers covering Alabama homeowners.
What Affects Alabama Home Insurance Costs?
For most home insurance providers, pricing is influenced by these factors:
- Location
- Coverage chosen
- Home build details
- Provider chosen
- Credit
- Claims history
We'll explore how each factor impacts rates in Alabama.
How Much Does Location Affect Home Insurance Costs?
Location is the biggest factor affecting home insurance rates in Alabama, with rates varying by up to 44%. Weather risks, home value and population density in your area play a major role in determining costs.
| Lowest | Alabama Small Tier Aggregate | $300 | $3,598 |
| Highest | Mobile | $553 | $6,633 |
How Much Does Coverage Affect Home Insurance Costs?
Coverage choices are the second most influential factor in Alabama home insurance rates, with average costs ranging from $2,321 to $14,345 per year. Higher coverage limits and lower deductibles increase premiums, while lower limits and higher deductibles reduce costs.
| Lowest | $100K Dwelling / $50K Personal Property / $100K Liability | 2000 | $193 | $2,321 |
| Highest | $1MM Dwelling / $500K Personal Property / $1MM Liability | 500 | $1,195 | $14,345 |
How Much Do Home Details Affect Home Insurance Costs?
Depending on home details like age, construction materials and roof type, homeowners insurance rates in Alabama can range from $180 to $381 per month. These factors will affect replacement costs and the risk of damage or theft, making home details the third most influential factor for insurance rates.
| Lowest | New | Superior | Tile | $180 | $2,165 |
| Highest | Old | Frame | Shake-Treated | $381 | $4,572 |
How Much Does the Provider You Choose Affect Home Insurance Costs?
Your choice of insurer is the fourth most influential factor in Alabama home insurance rates, with prices ranging from 27% below to 155% above the state average. Selecting the right provider could give you substantial savings, which is why it's important to compare options to find the most affordable coverage for your needs.
| Lowest | USAA | $266 | $3,189 |
| Highest | Travelers | $930 | $11,157 |
How Much Does Credit Affect Home Insurance Costs?
A higher credit score makes you appear more reliable, which can lower your home insurance costs. Premiums vary by up to 133%, with annual average rates ranging from $2,539 to $21,683.
| Lowest | Excellent | $212 | $2,539 |
| Highest | Poor | $1,807 | $21,683 |
How Much Does Claims History Affect Home Insurance Costs?
Filing more claims will increase your perceived risk for insurers, which can increase premiums. However, in Alabama, claims history has a smaller impact on cost than other factors. We found that depending on your claims history, rates can be affected by up to 13% or $653 annually.
| Lowest | Claim free for 5+ years | $365 | $4,377 |
| Highest | 2 claims in past 5 years | $483 | $5,797 |
Tips to Save on Alabama Home Insurance
With high home insurance costs in Alabama, saving on premiums is crucial. Whether buying a new home or cutting expenses, explore tips to secure the best and cheapest home insurance in Alabama tailored to your needs.
- 1
Find How Much Coverage You Need Beforehand
Determining how much home insurance you need before buying allows you to frame how you search for coverage and avoid being oversold by agents. In addition to standard coverage options, consider if you need add-ons to protect any additional items you own.
- 2
Research Costs and Discounts Beforehand
To determine if you’re getting a good deal, understand the average costs for you and your home. Also, ask agents about all available home insurance discounts, as some insurers apply certain reductions only if requested.
- 3
Compare Multiple Providers Through Different Avenues
Compare multiple insurers apples to apples to find the best coverage for your needs. Use various methods, including online comparison sites, brokers, provider websites, and agents, as quotes vary significantly across these channels.
- 4
Consider Bundling Policies
Bundling policies can lead to significant savings. For example, bundling home and auto insurance in Alabama can help you save up to 23% on auto and 15% on home insurance rates.
- 5
Reduce Your Personal Risk Profile
To get cheaper premiums on your home, consider making home improvements like adding storm shutters or home security systems. Also, improving your credit score can decrease premiums drastically. For example, moving from a fair to a good credit score can save you 28% on average.
- 6
See if You Are Eligible for State Programs
If you are denied by traditional insurers, Alabama offers coverage through the Alabama FAIR Plan to insure you. While Alabama FAIR Plan policies don't offer the same amount of coverage you get with traditional policies, they do satisfy mortgage requirements.
Alabama Home Insurance Calculator: Bottom Line
Home insurance costs in Alabama largely vary with location and coverage choices. Find affordable rates by comparing multiple providers, understanding your coverage needs, and using our estimate tool to get personalized quotes.
Homeowners Calculator Insurance Alabama: FAQ
The cost of homeowners insurance in Alabama depends on several factors. To help you estimate your expenses, MoneyGeek answers common questions below about home insurance in the state.
How much does homeowners insurance cost in Alabama?
Alabama's average monthly home insurance cost is $379 for a dwelling coverage of $250K. However, your rate will depend on factors like your credit score, liability and property coverage limits, and deductible.
How do I know how much dwelling coverage to get?
Homeowners can estimate their required dwelling coverage by calculating the cost to replace their home after damage, often with help from an appraiser. While this study uses a baseline coverage of $250K, you can use the MoneyGeek homeowners insurance calculator to determine the ideal coverage limit for your situation.
What factors affect home insurance costs the most?
The biggest factors affecting home insurance costs are your location, chosen coverage level, and provider. Your credit score and home details also play a crucial role.
How We Determined Our Alabama Home Insurance Estimates
When determining the average cost of home insurance in Alabama, we used a base profile for a simple estimate consistent with the following:
- $250,000 dwelling coverage
- $125,000 personal property coverage
- $200,000 liability coverage
- Home Built Year: 2000
- Construction type: Frame
- Roof type: Composition
- $1,000 deductible
- No claims in the past 5+ years
- Fire protection level of 3
However, rates will vary widely depending on factors such as coverage level, provider chosen, the age of the home, other features of the home, insured credit and claims history, among other factors. All other combinations presented in this article assume the home was built in 2000.
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
Passionate about economics and insurance, he aims to promote transparency in financial topics and empower others to make confident money decisions.