Farmers is the cheapest home insurance option for most homeowners in Alabama, with an average monthly savings of $232. Below is a summary of the most affordable providers in the state.
Cheapest Home Insurance in Alabama
Updated: May 27, 2025
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Key Takeaways
State Farm offers the cheapest homeowners insurance in Alabama if you own a new home or have bad credit.
Customers can find savings of up to 70% from the cheapest overall providers in the state: Country Financial, State Farm and Farmers.
If you live in a high fire risk area, State Farm is the cheapest provider for home insurance in Alabama.
What is the Cheapest Home Insurance in Alabama?
| Farmers | $268 | $3,211 | 29% |
| State Farm | $268 | $3,220 | 29% |
| Allstate | $270 | $3,234 | 29% |
| Auto-Owners Insurance | $276 | $3,313 | 27% |
*These rates are based on a house built in 2000 with a $1,000 deductible, $250,000 in dwelling coverage, $125,000 in personal property coverage, $200,000 in liability coverage and class 3 fire protection. The insured is assumed to have good credit and no claims in the past five years.
THE CHEAPEST COMPANY MAY NOT BE THE BEST FOR YOU
Price is important to consider for home insurance, however it's also useful to know about a company's customer service reputation and coverage options. To help, we've created a separate guide to the best home insurance companies in Alabama, giving you more information to make the best decision for your situation.
Cheapest Alabama Home Insurance Rates by Category
Although these options are affordable for most homeowners, your situation might differ. For example, while State Farm is typically the cheapest, it offers the best rates for newer homes. Below, you can see the cheapest rates for different home categories.
| Farmers | Older Homes | $268 |
| State Farm | Newer Homes | $159 |
| State Farm | Homes in High Risk Fire Areas | $268 |
| COUNTRY Financial | Bad Credit | $368 |
*Rates are modified based on our methodology’s base profile. Newer home estimates are based on a home built in 2023, high-risk fire estimates are for a policy with 8-class fire protection, and bad credit rates assume a poor credit score on the FICO scale.
Compare Personalized Cheap Alabama Home Insurance
The companies listed above typically provide the best rates for their categories, but actual rates vary based on your unique profile. Use the filter below to get a personalized list of the cheapest providers for your situation.
Data filtered by:Results filtered by:
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Coverage Level:$250K Dwelling / $125K Personal Property / $200K Liability
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Deductible:1000
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Claims History:Claim free for 5+ years
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Credit Tier:Good
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Home Age:Older Homes
| State Farm | $268 | $3,220 |
| Auto-Owners Insurance | $291 | $3,497 |
| Farmers | $299 | $3,592 |
| Allstate | $320 | $3,839 |
| COUNTRY Financial | $375 | $4,496 |
Cheapest Alabama Home Insurance By City
Risk factors for insurers vary by location, making some providers more affordable than others. For instance, Allstate is the cheapest option in cities like Birmingham, Huntsville, and Montgomery. However, in Mobile, COUNTRY Financial offers the lowest rates, highlighting the importance of comparing providers.
| Birmingham | Allstate | $182 |
| Huntsville | Allstate | $195 |
| Mobile | COUNTRY Financial | $260 |
| Montgomery | Allstate | $194 |
*These rates are based on a house built in 2000 with a $1,000 deductible, $250,000 in dwelling coverage, $125,000 in personal property coverage, $200,000 in liability coverage and class 3 fire protection. The insured is assumed to have good credit and no claims in the past five years.
How To Find the Cheapest Alabama Home Insurance for You
Finding affordable home insurance in Alabama can be challenging, but you can significantly lower your costs with some effort. Below are our core recommendations to help you maximize savings on your policy.
- 1
Determine your coverage needs
Having your coverage limits in mind before buying can keep you from being oversold on coverage. Make sure you determine your home insurance coverage needs beforehand and understand the types of home insurance coverage to get what you need.
- 2
Research home insurance cost information
Research home insurance costs in Alabama for your profile and available discounts to understand what qualifies as affordable. When ready to buy, ask agents directly about all discounts you may qualify for, as insurers won't apply them automatically.
- 3
Bundle your policies
Maximize your savings through bundled home and auto insurance solutions in Alabama.
- 4
Compare multiple companies apples to apples
Once you know your coverage levels and type, compare quotes from different companies for that coverage to get the best deal. We recommend gathering as many quotes as possible using different methods to get your best rate.
- 5
Use state-provided programs
If you have a high-risk profile and face coverage denials or unaffordable rates, Alabama offers a state program through the FAIR Plan. This program provides coverage for those denied by traditional insurers, often at a lower cost than insurers willing to approve you.
Cheap Home Insurance Alabama: Bottom Line
Farmers, State Farm, and Allstate offer some of the most affordable home insurance in Alabama, with monthly premiums around $268. Denied coverage? The TFPA has got you covered with low-cost policies. Remember to compare different companies, dig into the costs, and figure out what coverage you really need before making your choice.
Cheapest Home Insurance Alabama: FAQ
Below are answers to common questions about the cheapest home insurance in Alabama:
What is the cheapest home insurance company in Alabama?
State Farm offers the lowest rates for newer homes in Alabama at $159 per month or $1,907 per year. However, homeowners with older properties or higher fire protection needs may find better rates with Farmers or State Farm for high-risk fire areas.
How expensive is home insurance in Alabama?
Alabama has the 28th-highest home insurance rates in the U.S.
How much is home insurance in Alabama?
Your home insurance should be sufficient to rebuild your home and replace personal items while considering local risks and special possessions.
While not required by law, if you have a mortgage, your lender will require a home insurance level that covers the full replacement cost of your house in the event of total loss. It's also wise to cover your valuable possessions and account for risks specific to your area.
How much home insurance do I need?
Your home insurance should be sufficient to rebuild your home and replace personal items while considering local risks and special possessions.
While not required by law, if you have a mortgage, your lender will require a home insurance level that covers the full replacement cost of your house in the event of total loss. It's also wise to cover your valuable possessions and account for risks specific to your area.
How We Found the Cheapest Home Insurance Companies in Alabama
To determine the cheapest home insurance companies in Alabama, we assumed the following base profile:
- $250K dwelling coverage
- $125K personal property coverage
- $200K liability coverage
- Home built in 2000
- Frame construction
- Composition roof
- $1,000 all perils deductible
- No claims in the past 5+ years
- 3-class fire protection
All other combinations were adjusted based on this profile to provide a more accurate comparison for your specific situation. However, these figures are estimates, and we recommend comparing quotes from multiple providers to secure the best deal.
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.