Who Has the Cheapest Homeowners Insurance Quotes in Alabama?

Find the Cheapest Homeowners Insurance Quotes in Your Area

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'The Heart of Dixie', Alabama is the 23rd most populous state in the US but has the 6th highest homeowners insurance rates thanks in part to its 53 miles of coastline. This coastal area has been walloped by large hurricanes in the past, including most recently Hurricane Ivan (2004), Hurricane Dennis (2005), and Hurricane Katrina (2005) which were all Category 3 storms. In an effort to find out which cities in the state had the cheapest (and most expensive) rates, the team here at ValuePenguin dug through the data to find out. Our analysis found that the average homeowners insurance rate in the state was $2,327 per year while the range was between $1,881 and $4,609. Read more below, or enter your zip code above to start finding quotes from a list of homeowners insurance companies.

Best Homeowners Insurance Companies in Alabama

  • Alfa Insurance
  • COUNTRY Financial
  • USAA

You could be living anywhere from Mobile to Birmingham: The best home insurance for you should have an appropriate combination of coverage features, price, stability and customer service. For this ranking, we've emphasized customer service, rating the largest homeowners insurance companies in the Heart of Dixie using customer complaints.

RankCompanyMarket shareComplaint ratio
1State Farm28.6%0.26
2Alfa Insurance14%0
7Liberty Mutual3.4%0.69
9Auto-Owners Insurance2.3%0.28
10COUNTRY Financial2.2%0.17
This analysis incorporates the 10 largest insurance groups in Alabama by market share. The complaint ratio is provided by the National Association of Insurance Commissioners, with a lower ratio indicating customers are happier with their service. The ratio for a group is taken from its largest individual company active in the state.

Find the Cheapest Homeowners Insurance Quotes in Your Area

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The top homeowners insurance companies in Alabama by this standard are Alfa Insurance, COUNTRY Financial and USAA. The worst of the state's major insurers are Liberty Mutual, Farmers and Allstate and Nationwide (tied). Alfa Insurance has an exceptional complaint rate of zero, indicating that no official complaints were lodged by the state insurance department last year. But homeowners in Alabama appear to be generally happy with their insurance experience, with all 10 of the largest insurers in the state receiving a customer complaint ratio below the national median of 1.0.

Alabama Homeowners Insurance Company Reviews

The three largest homeowners insurance companies in Alabama are State Farm, Alfa Insurance and Allstate. We reviewed these insurers below, focusing on policy coverage, customer experience and financial stability.

State Farm

With a market share of almost 30%, State Farm is a major home insurance presence in Alabama. State Farm's advantage lies in its competitive multi-policy discount, wealth of coverage add-ons and its stellar customer service reputation.

If you're looking to insure both your home and automobile, State Farm often has some of the best bundling discounts in the industry. In Alabama, you can get up to 35% off your home insurance premium when you also buy auto insurance with the company. And State Farm home insurance provides a wide variety of additional features, albeit at an additional cost, for Alabamians with different coverage needs. For instance, if you rent your home in whole or part to others, you can expand coverage to cover loss of theft while the residence is occupied, something that is not normally covered under homeowners insurance.

State Farm's customer complaint ratio is fourth out of the top 10 insurance companies in Alabama, but at 0.26 it's far better than the national median of 1.0. And, with the exception of USAA, which only serves military members or veterans, this rating is the best among the major insurance companies in the state. State Farm is financially stable, too, earning A.M. Best's top rating of "A++" for financial strength.

Alfa Insurance

Alfa Insurance is an outgrowth of the Alabama Farmers Federation, and you'll have to pay federation dues to access its insurance products. In return, you'll get a provider with one of the best customer service reputations in Alabama, though its home insurance policies are fairly basic in terms of coverage.

With a customer complaint ratio of 0 last year, Alfa Insurance has a remarkably low level of official complaints given the size of its presence in Alabama. And this trend has been consistent, with the ratio never rising above 0.2 in recent years, a very low number indicating it has consistently had some of Alabama's most satisfied customers. The one noticeable downside of its customer experience is that there is no online quote tool, meaning you'll have to talk to an insurance agent to get an initial estimate on prices.

Alfa Insurance home insurance policies are quite basic, so it's not a great fit for customers with more specific coverage needs. An Alfa policy will provide core coverages—dwelling, personal property and personal liability coverage—but little in the way of unique features. The one exception to this rule is its home systems protection endorsement. At a cost of $43 per year, this add-on protects systems, ranging from security devices to home theaters, against mechanical failure for up to $100,000 in repair or replacement costs. Homeowners concerned about the gradual breakdown of their systems, rather than their damage due to a covered peril, should consider Alfa Insurance and this endorsement.

The other type of shopper who should consider Alfa Insurance are young Alabamians whose parents already have auto and home insurance with the company. If you're in your twenties, buying a new home and your parents are Alfa customers, you can qualify for a discount of up to 20% with the company's legacy discount program.

Shoppers concerned that Alfa's local focus makes it less financially stable than major national insurers can rest easy. The company receives a financial strength rating of "A" from A.M. Best, indicating an excellent ability to repay claims.


Another major national insurer, Allstate makes up over one-tenth of the Alabama home insurance market. With Allstate, you'll have the comfort of being covered by a major name, and, like State Farm, it provides some unique coverage features for Alabamians who want personalized coverage.

Most appealing are Allstate's unique add-on features, which stand out compared to other insurance companies. For example, if you're a conservative homeowner and want to ensure you have stable premium payments for your policy, you can purchase Claim RateGuard, which will guarantee that your premium won't increase just because you've filed a claim.

Allstate ranks seventh out of the top 10 companies in the state for customer complaint ratio, but you're still likely to get good customer service, as it scores far better than the national median. And it’s financially strong too, receiving a superior "A+" rating from A.M. Best.

Cheapest Homeowners Insurance in Alabama

We conducted a study that analyzed homeowners insurance rates of 75 cities of various sizes throughout Alabama from Progressive, Liberty Mutual, State Farm, Nationwide, and Farmers. We collected quotes for 2,000 square-foot homes and found that Progressive offered the cheapest homeowners insurance with an average annual rate of $1,634 for our sample homeowners policy. Below are the average annual rates for the five companies, ranked from cheapest to most expensive:

A ValuePenguin study showed Progressive had the best homeowners insurance rates for a sample policy and residence in Alabama.


Cheapest Homeowners Insurance CompaniesAverage Annual Rates








State Farm2,565


Liberty Mutual3,916


These rates were obtained for a sample property. We encourage homeowners to look for insurance quotes from multiple providers to ensure that they are getting the best rates for themselves.

Most Expensive Cities in Alabama for Homeowners Insurance

Four out of five of the most expensive cities for homeowners insurance reside in south Alabama with two of those being located directly on the water. The 5th (Opelika) sits in east-central Alabama, and while not imminently threatened by large storms that may blow in off the Gulf of Mexico, its costs are high due in part to property crime rates which are more than double the US average.


CityCountyAverage Annual Rate% Increase vs. AL Avg











Fairhope, AL

The most expensive city to insure your home in all of Alabama, Fairhope's location on the eastern side of Mobile Bay does it no favors when it comes to destructive storms that can make their way into the Gulf. This town of 15,000 is lauded for its natural beauty and stunning waterfront views, but those same advantages turn to disadvantages when the wind and rain picks up. Rates in Fairhope are around $4,609 per year which is 98% higher than the Alabama state average.

Mobile, AL

The 3rd most populous city in AL with almost 200,000 residents, Mobile sits just 20 miles northwest of our most expensive city, Fairhope. Amongst other distinctions, Mobile has been rated as the wettest city in the lower 48 with over 66 inches of rainfall per year. With its position on the water and the incredible amount of rain each year it's no big surprise that Mobile's rates are the 2nd highest in Alabama. Residents can expect to shell out $4,300+ per year or nearly $360 per month on average!

Andalusia, AL

While not situated directly on the water, Andalusia is still located in the southern portion of the state a short 70 miles from the Gulf of Mexico. In Andalusia's history there have been 19 natural disasters declared (13 major disasters and 6 emergencies) which is 50% more than the US average. Part and parcel with natural disasters are higher home insurance rates and Andalusia's $2,957 average, while much lower than Mobile, is still more expensive than what most Alabamian's pay.

Brewton, AL

Forty five miles southwest of Andalusia you'll find the smallest town on our list, Brewton, AL. Brewton is home to roughly 5,000 residents who can all claim they live in one of the 100 best small towns in America having been recognized twice by Norman Crampton in his 100 Best Small Towns in America book. Homeowners insurance premiums in Brewton average around $2,910 annually or 23% higher than the state mean.

Opelika, AL

The fifth priciest city on our "Most Expensive" list, Opelika is part of the Auburn-Opelika metro area and has nearly 30,000 residents living inside city limits. Opelika also has a lot going for it these days. In addition to being named the 10th 'Best Small City for Jobs' by Forbes it was also ranked 22nd in CNN Money's 'Best Places to Live' report. Much of this is a direct result of huge influx of investment capital ($632 million) that the town has received since 2005. Home insurance rates in Opelika aren't cheap however and that's due mostly to a crime rate that's twice the national average. Homeowners can see costs around $2,383 per year on average to insure their property.

Best Homeowners Insurance Rates in Alabama: by City

The cheapest cities in Alabama all sit inland and far away from the Gulf of Mexico. Because these towns won't be bearing the brunt of any large oceanic storms their rates are typically cheaper. Additionally, the top 3 cities have property crime rates that are significantly lower than the national average, which helps generally to drive rates down further.


CityCountyAverage Annual Rate% Decrease vs. AL Avg


Vestavia HillsJefferson & Shelby$1,881-19%









Vestavia Hills, AL

Only 5 miles from downtown Birmingham, Vestavia Hills is an upscale suburb of Alabama's most populous city. With nearly 35,000 residents, the town is one of Alabama's most rapidly growing and wealthy cities boasting a top-tier school system, loads of outdoor space, and plenty of retail shopping options. Add in the fact that crime rates in Vestavia Hills are much lower than the US average and you've got a city with the lowest homeowners insurance rates in the entire state. At $1,881 per year, premiums in town are 19% lower than the Alabama average.

Pelham, AL

Another suburb of Birmingham (albeit a bit further south) Pelham was recently rated as one of the 'Best Places to Raise Kids in Alabama' by Bloomberg Businessweek. It's easy to see why, as the community has plenty of activities for the whole family to get involved in from the Civic Complex & Ice Arena to the Ballantrae Golf Club. The mean home price in Pelham is $203,000 with the average annual homeowners insurance rate being $1,925...or 1% of the home's purchase price.

Auburn, AL

A college town home to the Auburn University Tigers, the city of Auburn is home to almost 60,000 residents. The area boasts an affordable cost of living, a growing economy, and plenty to keep busy with. Besides watching the Tigers play football on Saturdays during the fall season, Auburn residents also have access to miles of hiking trails and one of the top golf complexes in the US (RJT at Grand National). Unlike its neighbor Opelika, Auburn's crime rates are lower than the national average helping it secure the 3rd best home insurance rates in Alabama: $1,933 per year on average.

Montgomery, AL

A city brimming with history, Montgomery is the capital and 2nd largest city in the state of Alabama. Historically, it has many places of significance such as the Montgomery Bus Boycott (Rosa Parks) and the Alabama War Memorial. The city also attracted the first electric street car system in 1886 in addition to the first Wright Brothers flight school in 1910. Homeowners insurance premiums in Montgomery are the 4th most affordable in Alabama at $1,962 per year or $164 per month on average.

Huntsville, AL

Located in north-central Alabama only 20 miles from the Tennessee border, Huntsville has received significant recognition in the last 5 years as an up-and-coming city to live, work, and play in. Kiplinger even went as far as naming it the "Best City in the Country" back in 2009 citing its high income growth, robust household income, and plethora of jobs available in industries like missile-defense and aerospace (which explains Huntsville's nickname: The Rocket City). Now the city can add one more selling point to its resume: it has the 5th cheapest homeowners insurance rates in the state of Alabama at $1,963 per year!

Cost of Homeowners Insurance in Alabama: by City

Below is a list of 30 of the cities in Alabama that we included in our analysis. We looked at Alabama cities throughout the state both small and large to show you which had the best rates. Each number shown below is the average annual cost of homeowners insurance for that specific town.

In Alabama, ValuePenguin found the average homeowners insurance premium was $2,327 for a sample policy and residence.

Our Methodology

This study looked at 75 cities of different sizes spread throughout the state of Alabama. Rates were obtained from five different insurance companies (Progressive, Liberty Mutual, State Farm, Farmers, and Nationwide). The sample homes we looked at were valued at $200,000 and were roughly 2,000 square feet in size. They were also constructed with a masonry veneer and asphalt shingle roofing. All policies had a $1,000 deductible. If you're interested in more shopping tips for homeowners insurance in Alabama you can always check out the Alabama Department of Insurance website for additional information. For more data on significant weather events that were referenced in our analysis you can go to the NOAA.

Lastly, here are 30 of the cities that we included in our study from A to Z.


Average Annual Rate





Alexander City






















































Vestavia Hills


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