Guide to Alabama Homeowners Insurance

Guide to finding the best home insurance in Alabama.

Whether you consider it a necessary protection or a lender requirement, every homeowner needs insurance. Standard policies provide coverage for dwellings, liability and personal property as well as additional living expenses if a disaster makes your home uninhabitable. Covered perils vary, but typically include incidents like fire and theft. Further details are subject to your propensity for risk and your home’s location.

Homeowners in Alabama may have southern hospitality and serious football fever but they’re at high risk for several natural disasters— most notably hurricanes, floods and tornadoes. These dangers make it even more important for those in the Yellowhammer State to purchase the right coverage. Use our guide to become more informed about your rights as a policyholder and determine whether you can get adequate coverage for a fair price.

Average homeowners insurance costs in Alabama

Determining how much you should pay for homeowners insurance isn’t always easy. Using data from the National Association of Insurance Commissioners (NAIC), the Insurance Information Institute reports that Alabamians pay an average premium of $1,358 per year for an HO-3 policy. That makes Alabama the twelfth most expensive state for homeowners insurance, leaving Alabama homeowners paying about $200 more than the average American. Of course, your actual insurance bill will depend on your home’s size and location,  and your assets, credit,d insurance history and the type of coverage you choose.

The Insurance Information Institute reports that Alabamians pay an average premium of $1,358 per year for an HO-3 policy. That makes Alabama the twelfth most expensive state for homeowners insurance Click To Tweet

Looking to lower your insurance premiums? Speak with your provider to see if you qualify for any common discounts. You can also take up some home improvement projects or adjust your deductible to lower your premiums further. And when your policy is up for renewal, be sure to review it thoroughly. It never hurts to comparison shop to ensure you’re getting the right coverage at the right price for your home.

Supplemental insurance needs in Alabama

Of course, it’s important to consider more than costs. Before you purchase a policy, research what events your home is most in danger of facing. Some may not be covered by a standard policy. Floods, for example, are generally excluded. Even covered perils can lead to financial trouble if you don’t have enough coverage. That’s why you want to choose an insurance company that offers replacement (rather than market value) cost and covers increased construction prices after a major catastrophe. Still, you may have to buy separate policies and endorsements to protect your home, possessions and family.

Northern Alabama is in the middle of what meteorologists refer to as Dixie Alley, which is a hot spot for tornadoes. Unlike tornadoes in Tornado Alley in the midwest, Dixie Alley tornadoes can strike at any time in any season. Thanks to its proximity to the Gulf of Mexico, Alabama enduress especially strong tornadoes with high levels of precipitation. In fact, the Yellowhammer State holds the National Weather Service record for the most EF5 tornadoes, the worst category. Even though homeowners’ policies usually cover wind events, you may need to purchase windstorm insurance as a result of your home’s heightened risk.

Because of many inland waterways, 60 miles of Gulf shoreline and frequent hurricanes, flooding is very common in coastal counties like Baldwin, Orange and Mobile. Flood insurance coverage is offered exclusively by the federal government under FEMA’s National Flood Insurance Program. Policies average $600 a year ased you can purchase them through your insurance agent. You can check their flood maps to assess any home’s flood risk.

The U.S. Geological Survey also warns that Alabama is one of the states that suffers the most damage from sinkholes. Coverage is excluded in most standard policies, but you can pay extra for it. Alabama homes are also vulnerable to sewer and drain backup. You case  buy separate endorsements for these issues or find an insurance provider, like Hippo, that  offers such  coverages in its standard policy.  

In addition to natural events, Alabama homeowners should be aware of their likelihood for burglary. Using the most recent available data from FBI’s Uniform Crime Reporting (UCR), Forbes contributor Niall McCarthy created an infographic showing the ten states with the highest rates of burglary. With  more than 700 incidents per 100,000 inhabitants, Alabama took the seventh spot. It’s important to thoroughly investigate how your policy handles theft claims to ensure you have what you need and feel comfortable with.

Additional insurance resources for Alabamians

Like  many states, Alabama has created bak-up insurance option. In states like Texas and California, they’re known as FAIR plans. The Alabama legislature refers to its offering as Alabama Insurance Underwriting Association or AIUA. Launched in the 1970s, AIUA provides essential coverage to Baldwin and Mobile county hometown  that would be unable to secure policies in the private market. Think fire, wind and hail policies. To qualify, your property must be located in the Gulf Front, beach or seacoast territories.

Homeowners in Baldwin and Mobile may also have access to the Strengthen Alabama Homes (SAH) program, which was created in 2011. After several hurricanes and tropical storms  generated significant damage and drove premiums much higher, many homeowners could no longer cover their insurance needs. SAH provides Alabama Department of Insurance (ALDOI) grants to help them retrofit their homes to better withstand the natural disasters they face.

After several hurricanes and tropical storms generated significant damage and drove premiums much higher, many homeowners could no longer cover their insurance needs. SAH provides Alabama Department of Insurance (ALDOI) grants to… Click To Tweet

Policyholder rights in Alabama

Beyond obtaining a policy, homeowners should understand their rights. The state agrees, which is why it passed the Alabama Homeowners Bill of Rights Act in 2012. Now, every insurance company that writes residential policies in the state must present a printed copy of the 12 basic policyholder rights whenever policies are first provided or renewed. The companies also post them on their website to present the “minimum standard” they hold themselves to. These rights ensure that companies put homeowner interests first and guarantee transparency in all advertising, pricing and claims.

If you have any other questions about your rights or need help filing a complaint against your provider, the ALDOI is there to help. You can visit its website, call the consumer helpline at 1-334-269-3550, or visit in person at the offices on Monroe Street in Montgomery.

All Alabama homeowners should reach out to the team at Hippo. Whether you need more information or are ready to start comparing quotes, we’re here to help.

 

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