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Laura Berry

Former Insurance Agent

Former Insurance Agent

Joshua Adamson

Joshua is a copywriter at Obrella who for more than 10 years has been creating content about insurance, health care, and more. He helps companies explain complex insurance subjects in simple ways so that customers can make smart buying decisions. He spends way too much time binge-watching Netflix, loves the outdoors and has a cat who tolerates him.

UPDATED: Dec 11, 2023

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Buying a home is a huge investment, so it’s important to give your home the best protection you can. Obrella is an easy-to-use online platform that makes it simple to find the right home insurance policy for your needs by connecting you with insurance agents who are familiar with all the ins and outs of home insurance in Alabama. We help you through the entire process over the phone, explaining your options, answering your questions, and even binding your policy once you’ve made your selection. So take the frustration out of shopping for the perfect home insurance with Obrella.

Homeowners in Alabama

On average, Alabama homeowners pay $1,248 per year for home insurance. This is roughly $200 more than the typical U.S. resident. At this rate, the state of Alabama has the 6th highest average insurance premiums in the United States.

  • Median Home Value:: $141,200
  • Household Income: $42,278
  • % of Income on Home Ownership: 26.30%

Compared to the national average, Alabama has a higher percentage of owner-occupied housing and a lower than the median house value. The percentage of owner-occupied homes in Alabama is 68% and the median value of owner-occupied housing is $122,500. Nationally, 63.5% of homes are owner-occupied, and the median house value is $176,700. The median household income for Alabama is $42,849, and residents spend 26.3% of their income on housing. This means Alabama spends less of their household income on home ownership than residents of 12 other states.

Your home is an investment and you want to protect it. To help you get homeowners insurance at the most affordable rate, have an insurance expert run a policy comparison. Doing this might save you money on your Alabama home insurance premium.

Coverage Options in Alabama

Many home insurance companies in Alabama give you a range of coverage options to choose from; here are a few examples:

  • HO-1: Limited Coverage
    • No longer available in most states, this basic policy offers coverage against the first 10 classified disasters: fire or lighting, windstorms or hail, explosions, riots, damage caused by aircraft, damage caused by vehicles, smoke, vandalism, theft, and volcanic eruption.
  • HO-2: Basic Policy
    • HO-2 is a basic policy that provides protection against all 16 classified disasters.
  • HO-3: Standard, most popular
    • This policy is the most popular due to its comprehensive coverage and relatively few exceptions.
  • HO-8: Older Home
    • As homes age, the cost of repairs to the house may exceed the actual market value of the house. With an HO-8 policy, you’ll receive reimbursements for damage on an actual cash value basis, rather than the full cost of the repairs. Moreover, older houses may not be eligible for plans that cover the full replacement cost of the home in the event of a total loss.

What Will Standard Alabama Homeowners Insurance Cover?

It’s important to know what your policy covers. Home insurance coverage will typically only reimburse you if the damage to your home or the personal injury of another on your property is the result of a situation explicitly covered in your policy’s terms. So for example, if your home sustains damage due to flooding but your policy does not cover flooding, you will bear the sole responsibility for the cost of repairing your home. Want to know more? Consider the following list of common home insurance coverages:

  • Coverage A – Dwelling
    • Covers damages to a home and any structures attached to the home, including damage to plumbing, wiring, heating, and permanent air-conditioning systems.
  • Coverage B – Other Structures
    • Tool sheds, free-standing garages, fences, guest homes, and other non-attached structures are covered under Other Structures.
  • Coverage C – Personal Property
    • Personal Property coverage reimburses homeowners for the value of possessions, like electronics, furniture, and clothing items that are lost or damaged, even if the damage did not occur on the homeowner’s property—such as items in a storage unit.
  • Coverage D – Loss of Use
    • If home repairs prevent you from inhabiting your house, Loss of Use coverage will cover your living expenses for the duration of the repair process.
  • Coverage E – Personal Liability
    • Personal Liability coverage provides financial protection in the event of a lawsuit in which the homeowner is found legally liable for another’s injuries or damages.
  • Coverage F – Medical Payments to Others
    • Covers medical bills for individuals hurt on a homeowner’s property or by the homeowner’s pet.

Alabama Insurance Resources

  • Alabama Department of Insurance: Oversees insurance companies operating in the state of Alabama. If you want to research a company before buying insurance, or file a complaint about an insurance company, you can do so by contacting the Department of Insurance. These questions or complaints can be addressed at the department offices, located at:
Alabama Department of Insurance
201 Monroe Street Suite 502
Montgomery, AL 36104
  • Alabama Chapter of the Community Associations Institute: A not for profit organization dedicated to developing responsible community associations throughout the state. The Alabama Chapter of the Community Associations Institute is located at:
5184 Caldwell Mill Road Suite 204-236
Birmingham, Alabama 35244

Shopping for home insurance can be intimidating. With all the different options to sort through, it can be difficult to decide on the best policy to keep your home protected. Fortunately, shopping for home insurance doesn’t have to be stressful. You can use our resources and contact experienced insurance agents to answer all of your coverage questions and find great coverage.

To talk to a Alabama-licensed insurance professional about your home insurance policy options, call today at [mapi-phone-link /].

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